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Work flow involves under e-invoicing

The work flow can be divided into two parts :

Part A

Interaction between business/supplier and IRP ( Invoice Registration Portal)

Part B

Interaction between IRP and GST System and buyer.

This interaction can be well explained with the diagram below :

Now at first, we will elaborate Part A in details, following is the detailed explanation of the steps to be taken :

STEP 1

  • Generate invoice using own software.
  • The invoice must be as per published standard i.e. A utility where invoice can be generated using JSON format through ERP / any mobile app / any word or excel software.
  • Create JSON format of invoice.
  • Upload JSON to IRP.

It is to be noted here that small taxpayer ( turnover below ₹1.5 crore) can use tool provided by GSTN portal @free of cost.

This tool will help to create e-invoice.

STEP 2

  • Create IRN (unique invoice reference number).
  • This is optional step.
  • IRN is created using 3 parameters i.e. Supplier ‘s GSTN, his invoice number and financial year.

STEP 3

  • Upload JSON of Invoice in IRP.
  • JSON can be uploaded directly / GSP / 3rd party apps.

STEP 4

  • IRP generate and validate hash.
  • Hash will be sent to central ministry.
  • IRP confirm from central ministry that same invoice of same supplier of the same financial year not to be uploaded again.
  • After central ministry confirmation, IRP add [ signature on invoice + QR code] to JSON.
  • Hash becomes IRN (Invoice reference number) now.
  • IRN will be unique identity now for that particular financial year.

STEP 5

  • Return with digitally signed JSON with IRN and QR code, back to seller.
  • This invoice will be sent to buyer and seller on their respective email-id’s.

Now, the steps to be taken for Part B are as follows :

STEP 5(a)

  • Share the signed invoice with IRN, to GST and E-Way Bill system.

STEP 5(b)

  • E way bill system will create part A.
  • To create part B, add only vehicle number.

The steps can be understood quickly with an diagram below.

Some pointer to understand :

  • E-invoice can not be generate on the GSTN portal. It can be generated only using softwares or prescribes tools.
  • The free tools available on GSTN portal for e-invoice will be only for small taxpayers. This is optional.
  • Only e-invoice signed by IRP will be considered as valid e-invoice.
  • Offline tools will be provided to authenticate QR code. Tools will be provided through GST System.
  • IRP will not store invoices for more than 24 hours.
  • Multiple modes such as web /API /sms /mobile app /offline tools /GSP based modes are available for e-invoice.
  • Taxpayer can still print the e-invoice in physical paper. Only the reporting of electronic format of Invoice i.e. e-invoice will be reported to IRP.
  • The prescribed standard of e-invoice will be used in all the business.
  • The company logo will not be a part of JSON format.
  • E-invoice has a mechanism of reporting under RCM too i.e.Reverse Charge Mechanism.
  • E-invoice will be uploaded one-at-a-time.
  • E-invoice is not compulsorily signed by the seller.
  • If taxpayer wants to cancel, e-invoice is allowed to be fully cancelled, only within 24 hours.
  • Export transactions also require e-invoice compliance.
  • E-invoice can be amended on GST portal.
Author: Niranjan Reddy

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