The work flow can be divided into two parts :
Interaction between business/supplier and IRP ( Invoice Registration Portal)
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 :
- 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.
- 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.
- Upload JSON of Invoice in IRP.
- JSON can be uploaded directly / GSP / 3rd party apps.
- 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.
- 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 :
- Share the signed invoice with IRN, to GST and E-Way Bill system.
- 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.