October 5, 2022
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E-Invoicing under GST – A Step-wise Process Guide

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e-Invoicing under GST is no longer a future in India but is gradually becoming the present with its implementation from the next quarter: October 2020.

The pilot run of the Invoice Registration Portal has already begun & so it is time that you get familiar with the details of the entire process.

In this article, we have explained every basic detail on e-Invoices along with a step-wise process guide. For your ease, we have also mentioned an alternative approach for carrying out the process that takes less time & is highly efficient.

The e-Invoicing System- All you must know

 

e-Invoicing under GST is the new way of electronic authentication of B2B invoices which will roll out in October 2020 for all businesses having an annual aggregate turnover of more than Rs. 100 Crores.

Businesses having an annual aggregate turnover of more than Rs. 500 Crores will also have to generate QR codes for their B2C invoices.

Under this new system, the B2B invoices will be made in a specified schema format & the supplier will have to validate it on the Invoice Registration Portal or IRP.

Upon successful validation, the portal will allot a unique IRN (Invoice Reference Number) & QR Code to the invoice as an identification.

The IRP will validate the e-Invoices for- correct GSTIN, mandatory fields specified by the schema, & values, etc.

You can generate e-invoices in your billing/accounting systems just as in the current system but you will have to customize your ERPs to comply with the schema that is specified by the GSTIN.

After the successful validation of the e-invoice, the IRP will share the invoice with both the e-Way Bill Portal & the GST Portal. Additionally, the e-Invoice will also be shared with the recipient of the invoice & will be accessible for the tax authorities anytime, in case of scrutiny & audits.

Apart from IRN & QR Code for the B2B invoices & QR Code for B2C invoices, you will also be required to report other documents to the IRP- B2G (Business to Government)Invoices, Export Invoices, Invoices under RCM, Credit Notes & Debit Notes.

The vision behind e-Invoicing- A Money Move for Businesses?

e-Invoicing under GST is the new proposed idea of the GSTIN to help the taxpayers by making the invoicing process automatic which will eventually reduce the compliance issues.

Additionally, the Government has made the transaction process more transparent & has increased its involvement in the process, to avoid tax evasion.

The government has also solved the issue of multiple formats of invoices, which are hard to read in other ERPs. The GSTIN has proposed a specified schema format that must be followed by all the types of taxpayers for all types of supplies & transactions.

This will make it easy for all ERPs to read the invoices made in any other ERPs.

The overall objective of e-Invoices is to involve the Government into the transactions & invoicing process by making the process transparent so that there is no missing or defaulting of invoices. This will eventually lower the tax evasion count.

But the government has also eased up things for the taxpayers, businesses & accountants. Since e-Invoices will be shared with the GST Portal, it will auto-populate the data in the return forms, reducing the task of accountants.

And the e-Way Bill Portal, with the help of the e-invoice data, auto-generate the Part-A of e-Way Bills, wherever required.

The automated process not just reduces the work & time consumption, it also enhances the accuracy & authenticity of the invoices, which is definitely a boon for the businesses.

e-Invoicing- Registration Process on IRP

To generate e-invoices & perform the e-Invoicing GST operations you must register to the IRP or Invoice Registration Portal which is the main portal of the new system.

You will have to login or sign-up to the IRP: if you are already registered on the e-Way Bill Portal then you can use the same credentials to log in to the IRP, but if not you will have to sign-up & create new credentials.

We have mentioned the steps you can follow to register yourself on the IRP, below-

  1. You must be a registered Taxpayer under GST & must have your GSTIN.
  2. In the IRP home page click on the ‘Registration’ Tab
  3. Fill the Registration Form then enter your GSTIN & given Captcha code.
  4. The portal will then auto-populate certain details such as the Applicant’s name, address, Trade name, mail ID & Mobile number, based on the GSTIN.
  5. Check & verify these details, in case the details need to be updated, click on ‘Update from GST Common Portal’
  6. When all the details are correctly mentioned click on ‘Send OTP’
  7. An OTP will be sent to the number mentioned above
  8. Enter & validate the OTP in the IRP
  9. Then provide a username of your choice (6-15 alphanumerical characters)
  10. The IRP will then validate all the details & the username. Then create a password that you can use to access your IRP account.

e-Invoicing Operation: Step-wise process guide

The generation of e-Invoices involves a few additional steps to the old traditional invoice generation process.

The supplier will generate the invoices in their billing/accounting system, as they do currently, & then upload the same to the IRP for validation.

Upon successful validation, a QR code & IRN will be assigned to the invoices, converting the invoices to e-Invoices.

Mentioned below are the steps you need to follow to generate e-Invoices-

Step 1- Invoice Generation

The supplier is required to create invoices in their billing or accounting system, but to meet the criteria of electronic verification these invoices are required to be made in the specified schema.

The supplier must keep the mandatory & optional fields in mind while creating these invoices. On the account of incorrect details filled under the wrong header or missing mandatory fields, the IRP will reject the invoices.

The supplier must also ensure that their billing systems are capable of generating JSON Files of the invoices created following the schema. Additionally, JSON can also be generated using the following-

  1. Offline tools
  2. Utility or Mobile apps

Step 2- Generating the IRN

Suppliers can generate their own IRNs using the standard hash generation algorithm. For the invoices that don’t have an IRN already, the IRP will assign a system-generated IRN.

Step 3- Uploading Invoices to IRP

Now, the supplier will have to upload the JSON files of the invoices to the IRP.

Note- as of now, there is no option of bulk generation in the IRP, hence you will have to upload the invoices one at a time.

You can upload the invoices to the IRP through the following-

  1. Directly uploading on the IRP
  2. Through GST Suvidha Providers or GSPs such as GSTHero
  3. Through third-party application providers (APIs)

Step 4- Authentication, IRN generation, Signing

The IRP will validate your uploaded invoice, and check for errors in the schema, missing field, incorrect GSTINs, generated hash (IRN), etc.

For invoices without an IRN, the IRP will generate a hash/IRN.

Upon successful validation, the IRP will sign the e-Invoice and add the QR Code & the IRN to it.

The QR code & IRN will be unique for the e-Invoice & could be used to identify the invoices for the entire financial year.

Note- The IRP will share an error file in case of a rejected invoice. You can rectify those errors & try re-uploading the invoices to the IRP.

Step 5- The Backend process & downloading the e-Invoice

The successfully created e-Invoices will be shared with the e-Way Bill Portal, the buyer, and the GST Portal. The e-invoices will be available on the IRP for the next 24 hours & you can download the JSON of the same within this period.

Note- e-Invoice data will always be available & accessible to the tax authorities if required for audit or scrutiny.

A better alternative approach to e-Invoice Operations

The above-mentioned process is the official process to generate e-invoices, however, the process is lengthy & can consume a large portion of the productive time.

So, there are other easier alternatives to carry out the process but with fewer steps involved. The government authorizes GST Suvidha Providers to help the taxpayers ease their GST Compliance.

GSTHero is one such best in its field GSP, that provides e-Way Bill, e-Invoicing, GST Return Filing, Reconciliation, and New GST Return solutions.

You can generate e-Invoices in bulk in a fraction of minutes from within your ERPs with GSTHero e-Invoice Tally-SAP plug-ins (integration with other & customized ERPs available).

Following us the step-wise representation of e-Invoice generation with GSTHero

The process to generate E-Invoice in a click from Tally is given below-

  1. Integrate Tally ERP with GSTHero Tally Connector
  2. From Gateway of Tally click on GSTHero E-Invoicing
  3. Login using Credentials
  4. Create a sales entry normal Invoice
  5. On saving the invoice ‘Want to generate E-Invoice’ box pops- click on YES

The E-Invoice and IRN will be generated and would be printed from the same screen.

The process to generate E-Invoice in a click from SAP is given below-

  1. Integrate SAP with GSTHero plug-in
  2. Enter the Company & plant code, then select a date range on the E-Invoicing interface
  3. A sheet appears with all the details of Invoices in the date range
  4. Select invoices (multiple) to be made into E-Invoices, click on ‘Generate E-Invoices’

E- Invoices are generated for the selected invoices with IRN and QR. If the data in invoices are incorrect the errors are highlighted and suggested solutions are displayed.

 

 

Author bio : The Article is written by Prachi Wankhede who is currently working as a content creator at GSTHero in the Finance & Indirect Taxation domain. She’s an active digital content creator, creative writer, guitarist & sports enthusiast.

Her research & analysis skills are her signature skills & she’s capable of deliberately changing the perspective of content & writing detailed & perceptive blogs & articles. 

Disclaimer:

The entire content of this document have been prepared by the Author.  Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, we assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. We assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL TAXCHARCHA LLP BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION. This is only a knowledge sharing initiative and the website do not intend to solicit any business or profession.

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