How does e-Invoicing API help in generating an e-Invoice?
API plays an important role in the generation of an e-invoice. A taxpayer needs to enter their invoice details into their accounting system. The data is then sent through the API to the Invoice Registration Portal (IRP).
The invoice gets registered under the IRP, an IRN gets generated, and the invoice is sent back to the taxpayer along with the digitally signed e-invoice and QR Code. The taxpayer’s system prepares the invoice for print, containing the IRN and the QR Code embedded in it.
What are the benefits of using e-Invoice APIs?
- APIs provide a smooth integration between the ERP / accounting system of the taxpayer and the e-invoice system.
- As the outward supply invoices are first entered in the ERP of the taxpayer and then passed on to the e-invoice system, APIs will avoid the duplicate or double entry of an invoice/IRN.
- APIs help in eliminating data entry errors in the e-invoices.
- It enables the taxpayer to enter the data just once in their ERP, and after that, the APIs will transfer this data to the e-way bill and GST portals.
Prerequisites for using e-Invoice API for e-Invoice?
Following are the prerequisites for using e-invoicing APIs:
- Taxpayers/GSPs need to automate their process of invoice generation.
- It is a must for GSPs/taxpayers to ensure that the traffic originating from their end and landing in the e-invoice system is free from viruses, malware, intrusions, bots, etc. In case NIC detects any malicious traffic. It may suspend the service.
- GSPs/taxpayers must adhere to all the IT Security standards and regulatory requirements as per the Government of India.
- GSPs/taxpayers should meet the security requirements as specified by https://www.cert-in.org.in/ for application and infrastructure.
- GSPs/taxpayers must comply with the Information Technology Act 2000 (including 43A) and the amendments.
- Taxpayers/GSPs must list at least four Indian Static IP addresses to access the production environment.
- A pre-production system for testing is a must to use different activities or services.
- GSPs/taxpayers will need to test their modified systems on the e-invoice pre-production site with all types of activities/services.
What happens when you use third-party applications for e-invoicing, and if you have your set-up?
There is a three-level interaction if one uses application service providers (ASP) to generate IRN. The ASP pulls out invoice data from the client’s accounting or billing system and puts the data in the required format to be sent to the IRP. The interaction happens via APIs. This model is comparatively an attractive option for most taxpayers due to its cost-effectiveness.
On the other hand, if the taxpayer has an ERP system that can interact with the IRP via APIs, it can easily communicate with the IRP to generate IRNs. However, such a set-up is expensive.