As per CGST Notification 01/2022 released on 24th Feb 2022, GST e-invoice has been made mandatory for entities with turnover of Rs. 20 Cr and above. And, now GST Notification 17/2022 dated 01-08-2022 mandates e-invoicing for taxpayers having AATO above Rs. 10 crores in any financial year since FY 2017-18 w.e.f 1st October, 2022.
E-invoicing has finally seen the light of the day. While the Government has provided relaxation to e-invoice mandate subject to certain conditions, e-invoicing is now officially here and the taxpayers have started generating IRN compliant invoices.
E-invoicing as much as it impacts the suppliers, has a ripple effect on the purchase cycle too. And the consequences of non-compliance by suppliers can cost recipients their ITC. And who wouldn’t want to safeguard themselves against this risk and put checks and processes in place. Know more about e-invoicing and ITC claim.
Just for a quick recap, e-invoicing in India that went live on 1st October 2020 requires suppliers or e-commerce operators on behalf of their suppliers to get their documents registered on the Government designated system i.e. Invoice Registration Portal (IRP). Once registered, IRP sends back a unique invoice reference number (IRN), a QR Code and full invoice data, verified and digitally signed.
Now on, the e-invoice received from the suppliers (to whom the mandate is applicable) will have the extra-information related to IRN. Hence, the recipients now need to verify the same and keep it for records. Here are some important questions which as recipients of e-invoices, you need to be aware of and wherever needed, be prepared for.
1. How will I know if my supplier is covered under e-invoicing mandate and hence the invoices received should have IRN?
As per the GST notification 70/2020 Central Tax the applicability is now above ₹500 cr in any of the previous FY since 2017-18. As of now it is only the NIC portal from where the enablement status can be verified. However, this information shall be soon made available in API in near future.
Checking for enablement on NIC portal is done GSTIN wise, however, the turnover applicability is at the PAN level. As we know, GSTIN itself includes the PAN and hence check for one GSTIN could imply all GSTINs that belong to the PAN are also enabled. Rare but there could be cases where inadvertently some GSTINs might have got missed to be enabled for e-invoicing. However, that shouldn’t be a cause of concern as the suppliers might have already applied for getting the missing GSTINs enabled.
Given that checking GSTIN is manual task right now, we can say it is safe to assume if enabled for one GSTIN, its applicable for the PAN overall.
2. Should all documents received from supplier have an IRN?
E-invoicing mandate covers Tax Invoice, Debit Note and Credit Notes. Any other document which your supplier sends you will not have IRN.
It is important to note that Invoice Registration Portal (IRN) cannot be generated for Bill of Supply. As per GST rules, separate invoices are to be issued for taxable and non-taxable supplies. While many organizations still issue a combined invoice for all supplies, there are suppliers who issue separate invoices, viz. Tax Invoice and Bill of Supply. In such cases, Bill of Supply will not have IRN and the Tax Invoice shall have IRN.
3. How to verify if IRN is valid?
Once document is successfully registered, the Invoice Registration Portal (IRN) system returns a response which includes IRN, E-way Bill Number if generated, QR code and other information. The digitally signed QR code (in field called “SignedQRCode” of response) is sent by Government which needs to be printed on the invoice. The invoice details as uploaded by the supplier also are digitally authenticated (in field called “SignedInvoice” of response ) and returned back to supplier. Below is a sample response that NIC sends on IRN generation.
On E-invoice portal, there is a facility to check the signed Invoice by uploading the response file (JSON format). Additionally, mobile app has been provided which can verify QR code content as well as signed full invoice.
Our flagship and innovative app, IRIS Peridot, is available for scanning IRN now. Users can simply scan a QR code and get detailed information about the invoice.
Scanning of QR code or uploading the signed data on NIC portal are manual processes. There is no API available currently which can be used by recipient or any other stakeholder, to verify if the IRN is valid and is active. Solution providers and industry experts, including us, have suggested to provide API which can help taxpayers (as recipients) to automate their IRN verification process.
4. As a recipient, can I get the full invoice data from NIC portal?
There is no such option at the moment. The feature (or API) to get invoice details by providing invoice reference number (IRN) can be triggered only by party who has generated the IRN i.e. the supplier. The recipients cannot get the signed invoice data from the NIC system.
IRP system is designed to hold data only for 24 hours and also near real-time integration is planned between E-invoice and GSTR 1. Once the e-invoice data is pushed to GSTR 1, the recipients can obtain data from GSTR 2A.
However, it is important to be aware that data for e-invoice is much granular than the invoice details required in GSTR 1. Such as HSN details are not available at invoice level in GSTR 1 for B2B transactions and hence same is not available in GSTR 2A. Moreover, the auto-population of GSTR 1 from IRN is under development.
Meanwhile, if recipients are considering automating their record keeping or verification’s, they either need to obtain the signed data from the supplier transactions or consider working with PDF /Other format of invoice copies.
5. Can invoice data change after the IRN is generated?
Once invoice reference number (IRN) is generated, the next stage from reporting perspective is GSTR 1 filing. IRP and GST portal are independent systems, and also GSTR 1 includes not only B2B and Export transactions for which IRN is to be generated but also other transactions such as B2C, Advances etc. Hence GSTR 1 is not locked which keeps the possibility for making edits open even for IRN generated invoices.
However, making edits post IRN generation could result in data conflicts for suppliers themselves and hence we do not see that any supplier would consider making edits. Any cases which require genuine corrections are best routed through debit and credit note, even if the change pertains to fields other than those related to amount, such as, updating recipient GSTIN.
GSTR 2A will always be based on GSTR 1. And ITC will be based on GSTR 2A. Difference between GSTR 2A and IRN invoice, though unlikely, cannot be completely ruled out.
6. If IRN is cancelled, will I come to know from the QR Code?
invoice reference number (IRN) can be cancelled only within 24 hours of generation, provided there is no active E-way Bill against the IRN. So, if the invoice is received after a day i.e. 24 hours, it can never be of cancelled status.
Within 24 hours if the invoice is cancelled, there is no provision as of now to verify this from the NIC portal. Status is not part of QR Code and hence even if invoice is cancelled, the same will not be reflected in QR Code.
7. The document I received does not have IRN printed, but there is a QR code? Does this violate any of the e-invoicing rules?
E-invoicing mandate in India requires suppliers to register their documents with Government and in return get acknowledgment and signed data. Suppliers can continue to print the invoice as per current practices and accommodate QR code on the output. GST Notification 72/2020, makes it mandatory for the QR code, which has the IRN embedded in it, to be printed on invoice. There is no fixed position prescribed and hence QR code can be anywhere in the invoice. Other details such as the IRN, acknowledgment number, date etc. is at supplier’s discretion. Refer to FAQs on Invoice Printing for further guidance.
8. My purchases from supplier are not direct but through e-commerce operator and invoices are generated by e-commerce operator on behalf of supplier. Would such invoices also have IRN?
When transactions are made through e-commerce operators, the e-invoicing system allows e-commerce operators to generate IRN on behalf of suppliers. If you are purchasing from e-commerce operator directly (and not when the operator is a market-place), then whether IRN is applicable will be determined by the turnover of that e-commerce operator.
Even in cases where E-Invoicing is done by e-commerce operators on behalf of supplier, QR code in such cases will still contain the actual supplier’s GSTIN and not that of e-commerce operator.
9. Will all my suppliers who have aggregate turnover above ₹20 CR be covered under e-invoice and hence will share QR code embedded invoice henceforth?
There are certain type of taxpayers and certain industries who have been given exemption from IRN generation. SEZ units are exempted from IRN and hence invoices issued by them will not have any IRN. Important to note, SEZ Developers are covered under e-invoicing. Hence ensure your internal systems and supplier masters identify SEZ Units and SEZ Developers as separate types.
Sectors such as banking, insurance and telecom are also exempted from e-invoice mandate. Further GST Notification 72/2020 also provides rights to Commissioner, who on recommendation of GST Council, can notify exemption for specified class of taxpayers and for a specified period.
Thus as a recipient, you may need to revisit your supplier master on a periodic basis so that you know from which suppliers IRN is to be expected. E-invoicing opens up many possibilities for taxpayers to automate their internal tasks and also have additional processes so that their purchase cycle, especially ITC does not get impacted. While the long term road map of Government is to provide connected reporting, in the interim taxpayers need to be mindful of the gaps and watch-out areas so that they can safeguard themselves
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