IRP, known as the Invoice Registration Portal is instrumental in validating the genuineness of the invoices used in the GST ecosystem. It generates and assigns IRN to every GST invoice.
The infrastructure to support the new e-invoicing system will be available for voluntary use from 1 January 2020. The Invoice Registration Portal (IRP) will play a key role in running the show.
What is Invoice Registration Portal (IRP)
The Invoice Registration Portals are entities that act as Registrars and operate through a website for assigning Invoice Reference Numbers (IRN) to each invoice/credit note/debit note.
The invoice details can be uploaded onto the Invoice Registration Portal using a prescribed mode for the purpose of either generating or validating the Invoice Reference Number (IRN) of the invoice uploaded.
Only such invoices with an authorized IRN will be considered valid as per law.
What are the functions of IRP?
The IRP performs the following tasks:
1. Generation of IRN for invoices: The Invoice Registration Portal generates the IRN (invoice reference number) for that invoice in the prescribed format based on the IRN parameters.
2. Validation of IRN for invoices: Where the taxpayer generates the hash on their systems, the invoice is uploaded with the hash, and the IRN checks if the prescribed parameters are complied with.
3. De-duplication check: The IRP conducts a check of the hash/IRN of an invoice for any duplication or repetition by comparing the same with information stored in the Central Depository.
4. Digital Signing of validated invoices: All the validated invoices are digitally signed by the Invoice Registration Portal using the private key of the IRP. This digitally signed JSON is then made available to the supplier.
5. Generation of QR codes in respect of validated invoices: Along with digital signature, a QR code is also generated in respect of each invoice by the Invoice Registration Portal.
The resulting QR code can be used to verify/print the invoice and also to have a quick view/access on handheld devices.
This feature is especially useful for tax officers and other stakeholders to verify certain details when they have no/limited access to the internet.
The following parameters will be available through the QR code:
A. GSTIN of supplier
B. GSTIN of recipient
C. Invoice number as given by supplier
D. Date of generation of invoice
E. Invoice value (taxable value and gross tax)
F. Number of line items
G. HSN Code of the main item (the line item having the highest taxable value)
I. Unique Invoice Reference Number (hash)
6. Sending the invoice via e-mail: The validated invoice will be sent to the e-mail address of the buyer and the seller as mentioned in the invoice.
7. Offline app: The IRP will provide an offline app to authenticate the QR code of an invoice offline and view its basic details. The complete details of the invoice would be available only after connecting to the portal.
8. Integration with GST and E-Way Bill system: The details of the uploaded invoice will automatically be shared with the GST system which will allow for automatic updating of ANX-1 (of the seller) and ANX-2 (of the buyer).
Further, the details will also be automatically shared with the E-Way Bill system wherever required to make the process of creating E-Way Bill even simpler.
The E-Way Bill system would only then require vehicle number to complete the process of creating E-Way Bill.
Direct Invoice Generation on IRP
E-invoicing ensures that a particular standard or format is followed for the electronic reporting of invoice details.
GST taxpayers must follow a prescribed format that helps the system read the output generated by another system (inter-system readability).
Therefore, if the details of the invoices are reported as per the prescribed format, it will result in a major improvement by automation in the process of filing returns.
Old System with new integration:
Thus, it can be concluded that the purpose of the Invoice Registration Portal is not to generate e-invoices online but to only register the details of the invoices generated by the entity on a day-to-day basis.
In order to upload details of the invoices into the IRP, the invoice should be available as a JSON file.
The GSTN has provided eight free accounting/billing software that assists in generating an invoice as a JSON file. Accounting/billing software other than the above eight are also likely to provide the same functionality.
Further, there will also be an Offline Tool for the purpose of entering details of paper invoices and generating the JSON file of the same.
Modes of registering Invoice with IRP
Multiple modes have been proposed for registering the invoice on the IRP:
Web-based: The details of invoices can be entered into the website of the IRP for the purpose of registration/validation of the same.
API based: This mode will allow big taxpayers and accounting software providers to interact with the Invoice Registration Portal through their own software.
The IRN can be generated validated for invoices either one at a time or in bulk, similar to the E-Way Bill system.
SMS based: This mode aims at allowing invoice details to be entered in a specific format and sent to the Invoice Registration Portal via SMS for processing.
Mobile App based: IRP provides a mobile app that carries out some functions of the IRP as discussed above.
Offline tool based: The details of invoices can be entered into the website of the Invoice Registration Portal for the purpose of registration/validation of the same.
GSP based: Taxpayers can also utilize the services of the GST Suvidha Provider (GSP) such as ClearTax to help them carry out their e-invoice related compliances.