Navigating the intricate landscape of financial and taxation matters in India demands a clear grasp of specialized terms. In this article, we will discuss essential e-Invoicing glossary/terminology, shedding light on key concepts and their relevance, with the help of GSTN Guide.
e-Invoicing: Streamlining Document Reporting
‘e-Invoicing’ refers to the process of reporting specific GST documents to a government-notified portal called the Invoice Registration Portal (IRP) and obtaining an Invoice Reference Number (IRN). Importantly, it doesn’t involve generating invoices through a government portal.
IRP (Invoice Registration Portal): Uploading and Reporting
The IRP, a government-approved platform, facilitates the upload and reporting of invoices by notified individuals. Presently, six portals possess authorization to generate IRN when invoices are reported as per Rule 48(4) of the CGST Rules. Notably, using these portals for reporting invoices and generating IRNs is free of cost.
IRN (Invoice Reference Number): Uniquely Identifying Invoices
An IRN is a distinctive identifier assigned to each invoice reported on an IRP. This identifier is derived from a hash computation involving the supplier’s GSTIN, the financial year, document type, and document number.
AATO (Annual Aggregate Turnover): Significance for e-Invoicing
AATO, calculated based on a taxpayer’s PAN and their GSTR-3B return information, represents the total turnover during a financial year. This figure determines the applicability of e-Invoice reporting requirements.
Enablement: Registering for e-Invoicing
Enablement refers to the process of registering and activating a taxpayer for e-Invoicing through the GST portal, granting them the ability to report e-Invoices via any of the six IRPs. While taxpayers are automatically enabled based on AATO, self-enablement through the portal is necessary if not already enabled.
GSTIN: Uniquely Identifying Taxpayers
A GSTIN (Goods and Services Tax Identification Number) is a unique identification number assigned to each registered taxpayer under the GST system.
GSTR-1: Reporting Outward Supplies
GSTR-1 is a monthly or quarterly return filed by taxpayers, containing details of outward supplies, including e-Invoice data.
Debit Note: Adjusting Invoice Value Downwards
A Debit Note is a document used to record a reduction in the value of a previously issued invoice, typically issued by the seller.
Credit Note: Adjusting Invoice Value Upwards
A Credit Note is a document used to record an increase in the value of a previously issued invoice, usually issued by the seller.
e-Invoice QR Code: Digital Invoice Insights
The e-Invoice QR Code is a two-dimensional barcode containing information about the invoice. It includes parameters like supplier and recipient GSTINs, invoice number, generation date, invoice value, IRN, and more.
e-Invoice QR Code Verifier App: Scanning and Validating
This mobile application allows users to scan and validate QR codes on e-Invoices.
e-Invoice FO Portal: Central Access Point
The e-Invoice FO Portal, provided by GSTN, grants taxpayers access to various e-Invoice-related functionalities. These include enablement status, e-Invoice generation, IRN searches, and links to all six IRPs, e-Invoice schema, master codes, and more.
JSON Format: Structured Data Interchange
API for e-Invoice Reporting: Integration and Functionality
IRPs offer API-based functionality for reporting e-Invoices. APIs are protocols for building and integrating software applications.
B2B Invoices: Focus on Business Transactions
B2B invoices are issued in business-to-business transactions. In India, e-Invoicing requirements currently apply to certain taxpayers’ B2B invoices based on their annual turnover.
ERP System: Managing Business Activities
An ERP system is software used by companies to manage daily business activities. While taxpayers can continue generating invoices from their ERP system, details of B2B invoices must be uploaded or reported on an IRP in a specified format.
OTP: Secure Verification
OTP (One-Time Password) is a password valid for a single login session or transaction. During IRP registration, an OTP is sent to the registered mobile number for verification.
Auto-population: Automatic Data Filling
Auto-population refers to the automated insertion of data into a field. In the context of e-Invoicing, once an e-Invoice receives an IRN, the relevant data is automatically populated into the supplier’s GSTR-1 form in the GST system.
e-Invoice Schema: Framework for Consistency
The e-Invoice schema (INV-1 – Version 1.1) establishes a standardized structure for e-Invoices, encompassing mandatory and optional fields, their formats, and generation rules.
Master Codes: Standardized Reference
Master codes comprise pre-defined codes used in the e-Invoicing system, including HSN codes, country codes, currency codes, state codes, and others.
Signed e-Invoice: Verified Digital Document
A signed e-Invoice is digitally signed by the IRP post-validation. It receives a unique IRN and QR code for identification.
As the world of finance and taxation evolves, a solid understanding of these terms becomes indispensable. Equipped with knowledge of e-Invoicing, IRPs, unique IRNs, and more, you’re better positioned to navigate India’s ever-changing tax landscape with confidence.
GSTN Disclaimer: The provided information is meant for guidance and support only. Refer to relevant provisions of the CGST Act and Rules for legal definitions and interpretation. This content does not constitute legal advice, and users are responsible for adhering to applicable laws and regulations.
Understanding GSTN’s e-Invoicing Glossary/Terminology: GSTN Guide dated 18/08/2023