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An e-invoice is an invoice reported as per the electronic standard for reporting of invoices. This article will take you through the process of generation of an e-invoice and also its workflow.
The taxpayer will continue to generate invoices in the normal course of business. However, the reporting of these invoices electronically has criteria. It needs to be done as per the e-invoice schema along with mandatory parameters. The mandatory fields of an invoice for the supply of goods are listed below:
The seller has to ensure that his accounting/billing software is capable of generating a JSON of the final invoice. The seller can create a JSON following the e-invoice schema and mandatory parameters by using the following modes:
The supplier has the option to generate ‘hash’ based on specific parameters usually three of them such as Supplier’s GSTIN, Supplier’s invoice number, Financial Year (YYYY-YY). The prescribed algorithm, such as SHA256 must be used for the hash generation. If the hash is validated, it would later become the Invoice Reference Number (IRN) of the e-invoice.
The following modes may be used to upload the JSON of the final invoice:
The supplier can also upload the hash along with the JSON onto the IRP, if generated by him.
Hash will have to be generated by the IRP in respect of the invoices uploaded without the hash. In such a case, the hash generated by the IRP would become the IRN. Where the supplier has also uploaded hash, a de-duplication check will be performed. It is done by validating the hash/IRN against the Central Registry of GST System to ensure that the IRN is unique. Once validated, the hash/IRN is stored in the Central Registry. IRP will then generate a QR Code and digitally sign the invoice and make it available to the supplier. The IRP also sends the e-invoice via e-mail mentioned on the invoice to the buyer and seller.
The signed e-invoice data will be sent to the GST system where ANX-1 of the supplier and ANX-2 of the buyer will be updated based on the details entered in the invoice. Thus the invoices can be viewed on the respective ANX-1 and ANX-2 after a successful upload.
Wherever applicable, details of invoices will be used to update ‘Part A’ of the E-Way Bill. As a result, only vehicle number needs to be entered in ‘Part B’ of the E-Way Bill system to create an E-Way bill.