How to generate e-invoice
A summary of how to generate e-invoice.
This post will show you how to generate an e-invoice step by step, as well as the benefits. Here, we’ll go over each section in detail:
What is a GST E-invoice?
Accounting software electronically checks all invoices through GSTN for duties like tax returns and E-way bill preparation. This process is known as e-invoicing. There are some misunderstandings about e-invoicing. It does not involve creating invoices from a single site or tax authority, which would be inefficient owing to the diversity of industry needs and maybe prevent commerce.
E-invoicing is the process of sending invoices prepared by accounting software to the GST Portal. However, because different software utilize different formats to store data, the GST System was unable to understand them all, making it impossible to submit data from accounting software to the GST system.
To simplify the process of sharing data with other systems, we required a standard format (Schema). Users will see no change in how they generate invoices, whether in print or electronically. The main difference is that all accounting and billing software must use this standard format to produce JSON files for each invoice.
These documents can then be uploaded to the GST Portal for authentication and approval.
Benefits of the GST E-invoicing System
The following are the key benefits of the GST E-invoicing System:
- Standardization – Creating a single report for B2B invoice data in its original format to simplify reporting and eliminate the requirement for various forms (e.g., one for GSTR-1 and another for the e-way bill).
- Automation – To maintain the return ready for filing, the purchase and sales registers are generated automatically from the e-invoicing data. This data can also be used to create e-way invoices.
- Easy Reconciliation – Data verification and reconciliation between the recipient and the supplier will be simple and smooth, allowing for greater control over the computation and claim of input tax credits.
- Less Compliance – This reduces the compliance load and the need to verify input credit. This information is transmitted to both the tax authority and the supplier in their inward supply registers.
- No Fake Invoices – This helps avoid tax evasion and establishes system-level matching of input credit and output tax.
- Easily Available Information – Allows all supply chain employees to access real-time information.
- Environment-Friendly -There is no need to show several paper copies of the waybill. It also decreases authorities of the repetitive task of collecting and matching returns manually.
Steps to Generate an E-invoice
To generate an e-invoice, follow the steps below :
1: Generate Invoices
Invoices are created with billing or accounting software corresponding to the government’s e-invoicing format. Some people believe that they must create e-invoices through the government’s tax system; however, this is not true. Taxpayers can use any accounting software that can generate invoices in the correct format.
2: Generate an Invoice Registration Number
The next step is to submit a report to the Invoice Registration Portal (IRP). The e-invoicing system uses a hash algorithm to generate a unique 64-character code known as an IRN (Invoice Reference Number). You can generate this IRN for your e-invoice in two ways: offline or through an API.
3: Upload to the Invoice Registration Portal
This step involves submitting the invoice to the Invoice Registration Portal (IRP). You must upload the JSON file for each B2B invoice and the IRN generated by your accounting software or a third-party service.
4: IRP Validation of Invoice Details
In this step, the IRP verifies the JSON data and generates an IRN. It also checks the file to prevent duplicates in the Central GST Registry. The IRN will be the unique ID for the e-invoice for the entire financial year.
5: Creating QR Codes and Digital Signatures
The e-invoice system will generate the IRN. After that, you must digitally sign the QR code and the electronic invoice. The QR code allows for a quick view, access to invoices via mobile devices, and validation.
The QR code consists of the following:
- Supplier’s GSTIN
- The recipient’s GSTIN
- The invoice number issued by the supplier
- Date when the invoice was generated
- The invoice’s value
- Several line items.
- The HSN codes for the essential things
- A unique IRN.
6: Transmission of e-invoice data to the E-way Bill Portal and GST System
The data entered into the IRP will be shared or transferred to the GST system and e-way bill. This information is then utilized to auto-populate the GST annexures.
7: E-invoice receipt sent to the supplier's ERP.
The IRP portal sends the seller the JSON, IRN, and QR code. The customer will receive the invoice via email.
This post on GST E-invoice has come to an end. Please leave your thoughts and opinions in the comment section below.
FAQs
1. Can I generate an e-invoice right from the GST portal?
Ans: E-invoicing is the digital validation of business-to-business e-invoices over the GSTN network. As a result, you cannot generate an e-invoice directly from the site because it is not convenient to do so, especially in terms of quantity.
2. What is the time limit for creating an IRN?
Ans: There is no time limit for generating IRN. An e-invoice can be prepared within a few days of issuing the B2B invoice. However, it is best to finish the creation of IRN within the time of supply restrictions of the CGST Act.
