Process of Generating and Cancelling an E-Invoice
In continuation to our previous blog on E-invoicing under GST, in this blog we’ll be covering the process of how to generate an e-invoice through different modes such as off-line facility, Direct API integration and API integration through GSP. Also, we’ll be discussing how to cancel valid e-invoice generated through Invoice Registration Portal (IRP).
W.e.f. 1st October 2020, E-invoicing provision was applicable for taxpayers whose aggregate turnover exceeds Rupees five hundred crores (Rs. 500 crores) and w.e.f. 1st January 2021, E-invoicing shall be applicable for those taxpayers whose aggregate turnover exceeds Rs 100 crores. For applicability of the provision, aggregate turnover shall be checked for each financial year beginning from FY 2017-18 and if the aggregate turnover is exceeding the threshold limit in any financial year then the said provision shall be applicable.
Modes of generating E-invoice
For the implementation of e-invoicing, following are the channels through which an E-invoice can be generated:
- Offline Facility – Bulk Upload Tool:- In this, the taxpayer prepares and uploads the file containing the multiple Invoice Reference Number (IRN) requests, and the e-invoicing system will process each one of them and return the IRN for all as applicable.
- Direct API integration: – This is a direct method in which the taxpayers’ systems can be directly integrated for requesting the IRN and e-invoicing system will return the IRN.
- API Integration through GST Suvidha Provider (GSP): – In this case, the taxpayer system integration can be done through the help of registered GSPs for requesting the IRN and the IRP will return IRN.
In the case of e-commerce transactions, the e-Commerce Operator can generate the IRN/E-invoice on behalf of the supplier on whom E-invoicing is mandatory. In this case, the e-Commerce Operator should have been registered on the GST portal as an e-Commerce Operator and use e-Commerce GSTIN accordingly.
How to generate an E-invoice?
Under e-invoicing system, a taxpayer will continue to generate invoices in the normal course of business. However, it needs to be done in a standard format for which E-invoice schema has been notified. Following are the steps for generation of an e-invoice-
Step 1 – Invoice Creation
The supplier will create an invoice in the prescribed format (e-invoice schema) using his accounting or billing software. It must have the mandatory details. The accounting software of the supplier will generate a JSON file.
Step 2 – Invoice Uploading and Authentication
Upload the details of invoice containing mandatory fields onto the IRP using the JSON file or via application service provider (app or through GSP) or through direct API. The IRP will act as the central registrar for e-invoicing and its authentication.
IRP validates the key details of B2B invoices, checks for any duplications and generates an Invoice Reference Number (IRN also known as hash) for reference.
Step 3 – Generation of the unique IRN & Signing
IRP generates the IRN, digitally signs the invoice and creates a QR code in Output JSON file for the supplier. There are four parameters based on which IRN is generated: Seller GSTIN, Invoice number, and FY (YYYY-YY) and document type (INV/DN/CN).
Step 4 – Sharing of Data
Invoices in GSTR 1 (of supplier), GSTR 2A (of recipient), and GSTR 6A will be auto populated on a timely basis as data will be pulled in GSTN from IRP. Additionally, details will be forwarded to the e-way bill portal, if applicable.
Step 5 – E-invoice Downloading
The portal will send the digitally signed JSON along with IRN and QR code back to the supplier.
How to cancel valid E-invoice generated through IRP?
The IRN generated cannot be deleted. However, a provision has been provided to the taxpayer to cancel the IRN for various reasons like incorrect entry, duplicate entry etc.
Before going for IRN Cancellation the user should note that-
Process to cancel an e-invoice –
- To cancel an IRN user should select the ‘Cancel’ sub-option under ‘E-invoice’ on IRP.
- Next, the user has to select and enter the Ack No. or IRN as per the availability.
- Then, the system will display the E-invoice and will prompt user to select the reason of cancellation, enter remark and submit.
This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.