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Checking vendor compliance in e-Invoicing

What is an Invoice Reference Number (IRN)?

In India, e-invoicing was introduced to cut down on tax evasion.

With e-invoicing, it is simpler to authenticate invoices through the Invoice Registration Portal and share real-time data with tax authorities. Thus, the likelihood of false invoices is reduced, and only legitimate input tax credits are available for claim by taxpayers.

Buyers must therefore verify that their suppliers comply with e-invoicing.

How can I verify if I need a GSTIN to create an e-invoice?

Starting on October 1, 2020, all companies with a revenue of more than Rs. 500 crores must use e-invoicing. Later, as of January 1, 2021, it became applicable to companies with a turnover of more than Rs. 100 crore.

A facility on an e-invoice site, where a list of GSTINs producing IRNs are hosted and constantly updated, is available to everyone, whether or not they are registered under GST.

A taxpayer must take the following procedures to access this link:

  • Check out the e-invoice portal.
  • Choose “GSTINs producing IRN” from the search drop-down menu.
  • The “GSTINs producing IRN” page will appear.
  • To download the excel document from this page, click the “Download” button.

Verify the most recent update date before downloading the file. The taxpayer can check this list to see if a particular GSTIN is included for generating IRN.

How to know if e-invoicing is enabled for a GSTIN?

A taxpayer is responsible for making sure that e-invoicing applies to all of its vendors.

On the e-invoice portal ie. at https://einvoice1.gst.gov.in/Others/EinvEnabled, the user can check the status of e-invoice enabled.

A taxpayer must adopt the following actions:

  • Head on down to the e-invoice portal.
  • Select “e-invoice status of the taxpayer” under the search tab to view vendor e-invoice status.
  • Type in the captcha code and the GSTIN. Select Go.

The turnover disclosed by a GSTIN in its GSTR-3B is the basis for this classification.

It should be noted that a taxpayer’s eligibility for e-invoicing is not determined by the enabling status on the e-invoice portal. The status of the e-invoicing enablement can be disregarded if a specific category of taxpayers is exempt from e-invoicing.

How to evaluate whether a vendor is adhering to e-invoicing standards

If a valid e-invoice is not issued by the vendor to whom the e-invoice is applicable, the ITC is ineligible in the recipient’s hands.

Therefore, a taxpayer must verify that the vendor complies with e-invoicing standards.

For compliance, one can check the fields listed below in the e-invoice:

Payment Reference Number:

A taxpayer sends GSTN invoice data for verification. This field will be blank now; however, following GSTN verification, an acknowledgment will be provided to the taxpayer along with the invoice reference number. So, when receiving an invoice, the buyer must check for the IRN.

QR code

The Invoice Registration Portal must digitally sign both the invoice and the QR code. A QR code should be visible on the invoice that is delivered to the customer.

When it is available from his ERP system, the buyer can submit a JSON file or scan the QR code using the QR code verification app.

Following that, a valid QR code must contain information about the invoice, including the GSTIN of the invoice number, the supplier and buyer, the date the invoice was generated, the HSN code, the invoice value, the specific invoice reference number, and the digital signature of IRP.

Read more about GST e-Invoicing