All GST registered businesses with the e-invoice portal (GSTIN) report an e-invoice, which must adhere to the standard format notified by the CBIC. If you want an e-invoice, here’s how to generate it.
As the name suggests, it is not an invoice that you can download or generate but it is a process that validates all the B2B electronic invoices by GSTN.
E-invoicing is required to make sure that the invoices generated by the accounting software are valid to be used for processes like e-way bill creation and GST return filing registration.
Benefits of GST e-Invoicing System
There are several benefits of the GST e-Invoicing system and here’s all about them.
- This is a comprehensive tax that brings all the other indirect taxes under one umbrella.
- It also eliminates “Tax on Tax” also known as cascading tax.
- Earlier the turnover of any business was more than INR 5 lakh was liable to pay VAT. But under GST, this threshold has been increased to INR 20 lakh.
- With GST small with a turnover of Rs 20 to 75 lakh businesses are benefitted.
- The online procedure of GST has been beneficial for start-ups as everything can be done on this one platform and they can get everything registered here.
- With GST, now the return and compliances are lesser.
- GST has massively improved the efficiency of logistics as all restrictions on inter-state movement of goods have been lessened.
Steps to generate an e-invoice
Step 1: Invoice Creation
All suppliers/sellers must create an invoice in the told format (e-invoice schema) using their accounting software which must contain all the mandatory information. This accounting software of the supplier will generate a JSON for every B2B invoice which will be uploaded to the IRP.
The account/billing software that the seller owns must be capable of generating a JSON file of the final invoice. Generate a JSON file following the e-invoice schema by using these three modes that are billing and accounting systems that give this service. The second mode is a utility to interact with the accounting/billing system, or ERP, such as an excel/word document or a mobile app, and thirdly, an offline Tool to generate e-invoices by keying-in invoice data.
Step 2: IRN Generation
The second step generates a unique invoice reference number by the seller.
Step 3: Invoice Uploading
At this stage, it’s time to upload JSON for every invoice along with IRN, to the invoice registration portal. This step can be done through both thor-party software or directly.
Step 4: Authentication and Signing
The fourth step is IRP will validate the IRN which is attached with JSON. The other scenario is that it will generate an IRN if it is uploaded by the supplier.
Next, the file against the central registry of GST will be authenticated.
Once successfully verified, it will add its signature on the invoice and a QR code to JSON.
The Hash which was generated at an earlier stage would become the new IRN which will be the unique identity of that e-invoice for the financial year.
Step 5: Sharing of Data
Now this uploaded data will be shared with the E-way bill and GST system.
Step 6: E-invoice Downloading
Lastly, the portal will send the digitally-signed JSON with QR code and IRN to the seller. The buyer would be sent this invoice on their registered email ID. You can track all your business transactions using the Lio Mobile App. It lets you create, manage and track all your transactions in one single sheet. Also, it does not require any of your phone space for all the data you’re posting on the Application.