E-invoicing has revolutionised the way the Indian business community operates. The process of e-invoicing has brought about a positive change by streamlining the entire invoice cycle and reducing tax evasion to a certain extent. E-invoicing was implemented in a phased manner.
From August 1, e-invoicing under the goods and services tax (GST) has become mandatory for businesses with an aggregate turnover of Rs 5 crore or more.
GST-registered businesses in India currently stand at 1.4 crore, of which about 5 lakh are generating e-invoices. With the existence of only one e-invoicing portal by the government, scalability to get all businesses under e-invoicing was one of the main challenges to address. To incorporate more companies and further reduce the threshold, the government needed to build more capacity by setting up more invoice registration portals (IRPs) to make the implementation more straightforward.
What is an Invoice Registration Portal (IRP)?
IRP, which stands for invoice registration portal, is the official portal authorised by the Indian government for companies to create e-invoices under GST. Taxpayers can register their B2B invoices and export invoices to obtain a unique IRN (invoice reference number). An invoice is regarded as invalid in the absence of the IRN number.
The Role of Private IRPs
To assist businesses in efficiently generating IRN in 2023, the government selected four private IRPs from throughout India. As the government has further lowered the e-invoicing turnover capping, private IRPs are making things simpler and also lessening up the pressure on the government portal. The four private IRPs are – IRIS IRP by IRIS Business Services, Cygnet IRP, Clear IRP and E&Y.
The introduction of private Invoice Registration Portals (IRPs) for e-invoicing under the GST system in India was primarily aimed at building infrastructure and support for expanding the coverage of e-invoicing mandates. With the infusion of private entities, further streamlining the process of invoicing, efficiency and innovations can be expected.
The technical glitches and the single point of failure of having one system for invoice registration will now be better addressed. Also, the invoice data is available for a limited time on the government portal, making it difficult for businesses to refer to it at a later date. With multiple IRPs, business functions can continue smoothly even if one IRP system is down.
To address these issues, the government allowed private companies to set up IRPs, with the private IRPs providing businesses with a range of services, including invoice generation, cancellation, validation, and reporting.
The private IRPs have also helped businesses by providing additional features such as real-time validation of invoices, access to analytics and insights on invoices, and better visibility and control over the invoicing process.
Apart from these, private IRPs also offer real-time invoice validation, value-added services, enhanced control and visibility over the billing process, improved data analytics, and easier compliance.
Overall, the introduction of private IRPs will help businesses to reduce costs, improve compliance and focus on their core activities, thereby boosting the overall growth of the economy.
(The author is the head of product and strategy-IRISGST at regtech company IRIS)
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