A detailed explanation of how to generate digital signature for an e-invoice

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Date: 23 Oct 2022


The e-invoicing system went into effect on October 1st, 2020. It applies to taxpayers whose yearly revenue exceeds Rs. 500 crores. Beginning with the 2017–18 fiscal year, taxpayers with an aggregate turnover exceeding Rs. 100 crores were subject to it. From April 1, 2021, it also applied to companies with a turnover of more than Rs. 50 crore.

What is Digital Signature Certificate?

A digital signature certificate (DSC) can be used to sign documents and prove the signer's identity electronically. It can take the place of a real, handwritten signature. DSC will be considered genuine if it is developed per the regulations of the Information Technology Act of 2000.

Benefits of using a Digital Signature Certificate

The benefits of using a digital signature certificate are:

  1. Documents like Form 16, challans, contracts, statements, etc., are signed in bulk.

  2. It saves time as the documents are not signed manually or individually. 

  3. The documents can be searched, retrieved, or archived with ease. 

  4. It is a procedure integrated into the system and works with the signing, sending, and processing of electronic documents.

  5. It reduces the expense associated with the manual process by up to 70%.

  6. It ensures that the data's integrity and validity are well-protected.

Using a Digital Signature certificate in an E-Invoicing system

A provider must submit the JSON of the invoice to the Invoice Registration Portal as part of the e-invoicing system. The JSON must adhere to specific essential and optional parameters when reporting the bills. One of the optional elements in this scenario is the digital signature. If the JSON is considered authentic, the IRP will create the hash (Invoice Registration Number, or IRN) and then digitally sign the JSON using its private key. The e-invoice will become invalid, and the digital signature will not work if the signed JSON is altered.

The e-invoice will be legal for use by the seller in his business dealings once the IRP has signed it. Additionally, the IRP will send this electronically signed invoice to the GSTN and the e-way bill system. 

Why is a digital signature certificate required?

The invoice's JSON file must be uploaded to the IRP, and one of the optional factors is a digital signature. The JSON will be digitally signed, and a QR code will be generated once the IRP has verified the invoice. The Invoice Reference Number (IRN) issued by the IRP, the QR Code, and the supplier's digital signature must all be disclosed when the supplier gives the recipient a printed copy of his invoice. The supplier's digital signature and QR code must be provided separately and are not interchangeable.

Steps to attach a Digital Signature to an E-Invoice

Before connecting a digital signature to an E-Invoice, ensure the software required to read the DSC is installed and that the GST portal's "emSigner" function is operational. Follow the steps mentioned below to attach a digital signature:

Step 1: There are numerous methods, such as offline tools, mobile apps, etc., for producing an invoice in the required JSON format. After that, we must access the IRP and attach the JSON.

Step 2: Select the "Verify using DSC" button. The available digital signatures will be displayed in a dialogue box that will appear.

Step 3: Choose the proper digital signature and press the "Sign" button. Verify that the Authorized Signatory shown on the GST portal is the one who owns the DSC. You could be asked to input the DSC password by the utility.

Step 4: If the attachment of the Digital Signature Certificate were successful, a success message would appear. Press OK or Continue.