What is IRN full form?
IRN is Invoice Reference Number (IRN), which is a unique number generated by the GST System for every invoice uploaded by a taxpayer. It serves as a reference for the e-way bill system, which is used for the transportation of goods. The government of India introduced the e-way bill system to track the movement of goods across the country and ensure tax compliance.
The IRN is a crucial component of the e-way bill system, as it helps to verify the authenticity of the invoice and ensures that the correct tax is being levied on the goods being transported. In this article, we will delve into the details of the IRN in the e-way bill system, its importance, and how it works.
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How Does IRN Help?
In a typical situation, three sets of following invoices are generated:
- Original for the buyer
- Duplicate for the transporter
- Triplicate for the seller
A transporter may choose IRN no instead of the paperwork because it digitalises the revenue collection process at the check posts. It shortens the time the transporter must wait at the revenue checkpoint and aids in tracking the goods being transported by the tax authorities. If an IRN is generated, an invoice cannot be lost.
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What Is An IRN?
IRN is GST, which is a unique identifier assigned to an invoice to identify and track it. This number may be used to reference the invoice in various communications and transactions between the seller and buyer, such as payment or dispute resolution. It comprises a combination of letters and/or numbers and can be generated manually or automatically by invoicing software.
A GST-registered taxpayer can generate an IRN by uploading an invoice in the GST INV-01 form through the e-way bill portal. This IRN can be used instead of a physical tax invoice and is valid for 30 days. This simplifies the paperwork required, making the documentation process easier for transporters who handle multiple shipments.
The Detailed Format Of The Form To Obtain IRN
Let’s now understand the GST INV-1’s format and the various fields that must be filled in. To put it simply, let’s divide the form into four sections.
Part A
Form GST INV-1 starts with the fundamental information about the taxpayer or supplier, just like any other form required by the GST act. The following is a list of what is in Part-A:
- The GSTIN and supplier’s name are prefilled automatically.
- It is necessary to give the address of the registered business location or the main place of business.
- Add in the invoice’s date and serial number.
Part B
The taxpayer must complete certain Part B sections with information about the receiver. The following information must be entered.
- The GSTIN (if the taxpayer is registered) or a UIN (In case the recipient is an embassy or UN organisation).
- The name of the recipient and consignee.
- Address as well as the recipient’s and consignee’s state code. The first two digits of the GSTIN are made up of the state code. Karnataka’s state code, for instance, would be 29.
- If both parties are billed and the goods being delivered to are the same, the consignee’s column details are identical to the recipient’s. Although they may have different addresses, the GSTINs for the recipient and consignee can occasionally match. Parties billed and shipped to may have been GTINs in other instances.
Part C
The information in Part C describes the kind of supply the taxpayer is making. It is necessary to disclose whether the transaction involves a business-to-business (B2B) supply or a business-to-customer (B2C) supply.
Part D
All information pertaining to the consignment of goods billed is contained in Part D. It includes the following:
- The product description and the HSN numbers.
- The quantity and unit cost, after which the GST’s taxable amount is decided.
- Knowing the GST type that would apply to us is crucial after we have the taxable amount. CGST,SGST, and UTGST are determined based on the kind of transaction (interstate or intrastate).
- The tax invoice’s stated freight, insurance, packing, and forwarding costs must be declared. After completing the form, upload it to the e-way bill portal to generate an IRN that taxpayers and carriers can use in the future.
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What is the Hash Generation Algorithm in IRN?
The Invoice Reference Number (IRN) is generated using a hash generation algorithm that creates a unique identifier for each invoice. This algorithm combines specific details of the invoice, such as the supplier’s GSTIN, the buyer’s GSTIN, invoice number, and the invoice date, to generate a 64-character alphanumeric hash.
The hash’s purpose is to ensure each invoice’s uniqueness and prevent duplication or tampering. The hash is created using the SHA-256 (Secure Hash Algorithm-256), which is a cryptographic algorithm known for its high security. This ensures that once the hash is generated, it cannot be altered, ensuring the authenticity of the invoice.
What are the Parameters Used to Generate Invoice Reference Number (IRN)?
To generate an Invoice Reference Number (IRN), specific invoice details are used as parameters. These include:
- – Supplier’s GSTIN: The unique GST Identification Number of the supplier.
- – Buyer’s GSTIN: The buyer’s GST Identification Number.
- – Invoice Number: The unique invoice number assigned by the supplier.
- – Invoice Date: The date when the invoice was issued.
These parameters are combined and passed through a hash generation algorithm (SHA-256), which creates a 64-character unique IRN. This IRN is then used to validate and track the invoice within the GST system, ensuring its authenticity and preventing duplication or tampering.
When is the Invoice Reference Number (IRN) Generated?
The Invoice Reference Number (IRN) is generated when an invoice is uploaded to the GST e-invoice portal for validation. After submitting the invoice details, the system generates the IRN using the hash generation algorithm (SHA-256) based on the key invoice details (supplier’s GSTIN, buyer’s GSTIN, invoice number, and date).
The IRN is generated in real-time, typically during the creation or issuance of the invoice. Once generated, the IRN is attached to the invoice and digitally signed by the GST system, confirming that the invoice is valid and has been successfully registered in the government’s records.
Implementation Status
It is obvious that the revenue has put in place numerous barriers to stop tax leakage, even if IRN has not been introduced and taxpayers are in the grey area. This is noticeable in all forms based on similar lines (details in the Form GST INV 1 are similar to GSTR 1, for example). As a result, it is the taxpayer’s responsibility to provide accurate information and prevent any mismatch. Although the IRN was created to lessen the formalities at checkpoints, we will never gain from it unless it is really used.
Conclusion
The Invoice Reference Number (IRN) is an essential aspect of the e-way bill system, as it helps to ensure tax compliance and streamline the movement of goods across the country. It plays a crucial role in verifying the authenticity of the invoice and ensuring that the correct tax is being levied on the goods being transported. As such, it is important for taxpayers to understand the IRN and its significance in the e-way bill system to avoid any discrepancies or penalties.
Frequently Asked Questions
- Can I regenerate a new IRN for an invoice against which IRN was already generated?No, once an IRN is generated, you cannot generate a new one for the same invoice.
- How long will the IRN be stored on the government portal?The IRN will be stored on the government portal for 24 hours. After that, it will only be available through the GST system.
- What are the prerequisites to generate an IRN?You need a valid GSTIN, a digital signature, and invoice details like invoice number, date, and value.
- Will both invoice number and IRN required to be mentioned on the e-invoice?Yes, both the invoice number and the IRN must be mentioned on the e-invoice.
