Step-by-Step Process to Generate an e-Invoice in GST Portal (2024)

What is a GST E-invoice?

E-invoicing involves the electronic authentication of invoices generated by accounting software through the GSTN, enabling subsequent processes such as return preparation and E-way bill creation.

It involves submitting pre-existing invoices from accounting software to the GST Portal. Given the diverse formats used by various accounting and billing software to store information electronically, the GST System finds it difficult to comprehend data. To address this issue, a standardized format (Schema) was introduced to facilitate data sharing with other systems. From a user perspective, the process remains unchanged in terms of invoice creation, whether in print or electronically.

However, it was decided to implement a standard schema in which all the data from the accounting software can be shared to ensure the generation of JSON for each invoice in a format compatible with GST Portal upload for authentication and approval.

What are the Benefits of GST E-invoicing?

Given below are the major benefits of the GST E-invoicing System -

• Standardization - Creating a single report for B2B invoice data in its original format to streamline reporting, eliminating the need for multiple formats (e.g., one for GSTR-1 and another for the e-way bill).
• Automation - It involves the auto-generation of purchase and sales registers from the e-invoicing data to keep the return ready for filing. This data can also be used to generate e-way bills.
• Easy Reconciliation - Data verification and reconciliation between the recipient and the supplier will be hassle-free and seamless and help provide control over the computation and claim of input tax credit.
• Less Compliance - This results in a reduced burden of compliance and a reduction in verification of input credit. This data gets reported to the tax department and the supplier in their inward supply register.
• No Fake Invoices - It helps prevent tax evasion and establishes system-level matching of input credit and output tax.
• Easily Available Information - Facilitates real-time information availability for all the supply chain people.
• Environment-Friendly - There is no need to present multiple paper-based copies of the waybill. It also saves the officials from the monotonous work of collecting and matching the returns with manual work.

How to Generate an E-invoice?

Below are the steps you need to follow to generate an e-invoice -

Step 1. Invoice Generation

Invoice creation is done using billing or accounting software based on the prescribed format of e-invoicing. Many people have this misconception that the taxpayer has to generate an e-invoice through the government’s tax portal. However, this is not true. The taxpayer is free to use any accounting software he/she wants if the software has the ability to generate an invoice in the format prescribed by the government.

Step 2. Generation of Invoice Registration Number

The next step involves reporting to the Invoice Registration Portal (IRP). AN IRN is a number that is unique in nature and is generated through the e-invoicing system through the hash generation algorithm. A unique 64-character IRN is generated for all the submitted documents. Currently, you can generate IRN for the e-invoice system in both offline and API modes.

Step 3. Upload on Invoice Registration Portal

This step involves uploading the invoice on the IRP (Invoice Registration Portal). The JSON file for each B2B invoice and the IRN that is generated through a third-party tool or accounting software, has to be uploaded on the Invoice Registration Portal.

Step 4. IRP Validation of Invoice Information

In this step, the IRP will validate the information provided in the JSON and generate an IRN. Along with this, it also authenticates the file to ensure that there is no duplication with the Central Registry of GST. The IRN generated will remain a unique identity of the e-invoice for the whole financial year.

Step 5. QR Code and Digital Signature Generation

The e-invoice system will generate the IRN. After this, you need to sign the e-invoice and QR code digitally. The QR code facilitates a quick view, access to invoices from handheld devices, and validation.

The QR code consists of the following -

• Supplier’s GSTIN
• Recipient's GSTIN
• The invoice number provided by the supplier
• Date of generating the invoice
• The value of the invoice
• Number of line items
• The HSN codes of the main items
• A unique IRN

Step 6. Transmission of e-invoice Data to E-way Bill Portal and GST System

The data uploaded on the IRP will be shared or transmitted with the GST system and e-way bill. This data is then used to auto-populate the GST annexures

Step 7. E-invoice Receipt Sent to Supplier’s ERP

The IRP portal sends back the JSON, IRN and the QR Code back to the seller. The invoice will be sent to the buyer by email.

The standardized format ensures seamless data sharing, while the system's automation enhances efficiency and reduces compliance burdens. The benefits range from easy reconciliation to preventing tax evasion, providing a streamlined and environmentally friendly approach.

By following the steps outlined in this article, businesses can navigate the complexity of the e-invoicing system and experience a smooth and seamless data-sharing experience. However, given the complexity of GST law, it is common to have questions. But, don’t worry! Tax2win’s tax experts have the answer to all your tax-related queries.

Get Tax Advice Now!