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Invoicing

Invoice Reference Number(IRN)

What is an Invoice Reference Number (IRN)?

The Invoice Reference Number (IRN), also known as a hash, is a unique number created by the Invoice Registration Portal (IRP) under the e-invoicing system. 

An Invoice Reference Number is 64 characters and must be generated for each document, such as an invoice, credit note, or debit note submitted through the invoicing portal. This unique string will appear on all invoices that a GSTIN submits during a financial year and throughout the entire GST system.

What is the hash generation algorithm in IRN?

The hash generation algorithm in IRN is a complex mathematical function that takes an input of string or characters such as alphabets, numbers and certain special characters and produces a series of numbers. 

The output generated is such that the original message cannot be decoded. This is part of the e-invoicing standard and will be specified by GSTN.

What parameters are used to generate an Invoice Reference Number (IRN)?

Using a hash generation algorithm, characters are transformed into numbers to create an IRN. The three parameters listed below will each be subject to this algorithm:

  1. Vendor GSTIN
  2. Document number of the vendor, such as invoice number
  3. The financial year should be written in the format: “YYYY–YY”. For instance, 2020-21.

When is the Invoice Reference Number (IRN) generated?

The generation of the Invoice Reference Number (IRN) is required whenever the vendor issues an invoice, debit note, or credit note. There will be a 30-day grace period for taxpayers who generate an IRN starting on October 1, 2020, if their annual revenue exceeds Rs. 500 crores. This grace period is valid for invoices created between October 1, 2020, and October 31, 2020.

The e-invoicing system will continue to permit using any accounting software that a company currently uses to generate client invoices. But they must adhere to the rules and requirements established by the authorities. 

To generate an IRN, the organisation may select one of the two possibilities listed below:

Option 1: Connect directly to the e-invoice portal/IRP using API integration or the GST Suvidha Provider.

Option 2: With the help of the Excel offline tool.

In both situations, the IRP will carry out a deduplication check to ensure each IRN remains unique by comparing the newly generated IRN to the Central Registry of the GST System, which contains all newly generated/uploaded IRN.

FAQs on IRN

What is IRN full form?

IRN stands for Invoice Reference Number, which is present on every invoice uploaded by the taxpayer.

What is the expected lifespan of the IRN on the government portal?

The taxpayer will have access to the IRN generated by the e-invoice system for up to 24 hours.

Will the invoice number and the Invoice Reference Number(IRN) be required to be mentioned on an e-invoice?

According to the e-invoice schema announced by the CBIC on July 30, 2020, both fields are required.

What conditions must be met before creating an IRN?

The basic requirements are as follows:
-The user must be a GST-registered taxpayer who has a login created on the GST portal, the e-invoice system, or the portal for e-way bills.
-Details of the invoice, debit note, or credit note must be available.
-If a user wishes to generate bulk invoices from the IRN systems, they must make sure that they have previously made an API user id and specified its password on the e-invoice system.

How are financial years calculated?

The financial year is determined using the invoice date. In other words, the financial year is denoted by the letters YYYY-YY and begins on April 1 and ends on March 31. The financial year is 2020–21 if the date is January 5, 2021.

How is IRN produced?

IRN is created by an algorithm (SHA-256) using the Vendor GSTIN, Document Type, Document Number, and Year of the Invoice (Financial Year).

For an invoice for which an IRN has already been generated, can I regenerate one?

The invoice registration portal will only accept unique invoices; hence, it is impossible. The e-invoice system consults the Central Registry of the GST system to look for any instances of duplication.