Updated on July 22, 2025 10:58:27 AM
E-Invoicing is a giant leap under GST by the Indian government to streamline B2B transactions and improve tax compliance. In this mechanism, B2B invoices are electronically authenticated by the GSTN (Goods and Services Tax Network). This prevents errors, duplication, and the returns filing process from becoming burdensome.
E-Invoicing was introduced by the government in a phased manner depending on a company's turnover. With time, changes in applicability and turnover threshold were worked out so that more businesses get included. Most recently, it has been made mandatory for companies having a certain turnover to generate e-invoices for sales and services purposes. This step is taken to develop transparency in and around the tax system and improve its efficiency.
Since businesses need to know the applicability and the new limit to remain on the right side of the law, many small and medium-sized businesses have also come within its ambit; hence, knowledge of the present threshold is essential for timely preparation.
In this article, we shall discuss everything that you should know about E-Invoicing under GST, who needs to comply with E-Invoicing, how one goes about the process, and what documentation is necessary, along with any government fees involved. Knowing all these factors will help you stay GST-ready and free from any compliance issues, whether you are a growing business or an established enterprise.
E-Invoicing under GST, also called electronic invoicing, is a system introduced by the Government of India to bring simplicity and digitization of the processes for issuing B2B invoices. The invoice system was conceptualized by the GST Council, with the GSTN implementing it. E-invoicing intends to bring uniformity in invoice reporting across the length and breadth of the country and potentiate real-time exchange of data between the taxpayer and the GST system. The reduced limit of GST e-invoicing now extends its applicability to smaller businesses, increasing the coverage of compliance and streamlining reporting standards.
Businesses are mandated to generate invoices in a prescribed format and submit them to the Invoice Registration Portal (IRP). On submission, the portal will authenticate the details of the invoice and generate a unique Invoice Reference Number (IRN) with a QR code. The generation of IRN and QR code renders the invoice validated and, hence, considered legally enforceable as per the GST Act. Only invoices registered with the IRP will be treated as valid documents for the filing of GST returns and claiming input tax credit.
The key objectives of e-invoicing are to prevent tax evasion and automate the filing process, while increasing transparency. It facilitates a smooth flow of input tax credit, reduces errors, and blocks false invoices.
GST e-invoicing has rapidly grown into a must-have business compliance in India. It was established to maintain transparency, prevent tax evasion, and make GST return filing streamlined. The government has, thus, made e-invoicing compulsory for businesses subject to their annual turnover, and this limit has since undergone changes so that more taxpayers could be covered under it.
Understanding applicability and the new limit is essentially very crucial for each business owner. Early on, it was something for big enterprises, but with the reduction in turnover limits, even mid-sized and small enterprises are now under its ambit. As of now, e-invoices shall be generated only for B2B transactions of businesses having a turnover of over ₹5 crore. Being updated on the latest turnover criteria keeps one away from fines and ensures smooth GST compliance.
E-Invoicing under GST was introduced in a phased manner, gradually expanding its scope to include more businesses based on their annual turnover. Here's a simple table showing when and to whom it became applicable:
| Effective Date | Applicable to Businesses with Turnover Above |
|---|---|
| October 1, 2020 | ₹500 crore |
| January 1, 2021 | ₹100 crore |
| April 1, 2021 | ₹50 crore |
| April 1, 2022 | ₹20 crore |
| October 1, 2022 | ₹10 crore |
| August 1, 2023 | ₹5 crore (Current Threshold) |
Note: Turnover is calculated on a PAN India basis, i.e., the combined turnover of all GSTINs under a single PAN.
E-Invoicing under GST offers several benefits for businesses, tax authorities, and the overall economy. Here are the key advantages:
The entire procedure of applying for e-invoicing under GST is simple and has been made so that it can be done online. This is a stepwise approach for businesses to start with:
First, check if your business is eligible or required to generate e-invoices. As of now, e-invoicing is mandatory for businesses with an annual aggregate turnover of ₹5 crore or more in any financial year 2017-18 onwards.
Go to the official e-invoice portal at https://einvoice1.gst.gov.in.
Use your GSTIN to log in. If you are a first-time user, register after GSTIN is verified by an OTP sent to your registered mobile number and email.
You have to ensure that your billing or accounting software is capable of producing invoices in the prescribed e-invoice format (JSON). Many ERP vendors have also built e-invoicing features into their ERP systems.
Make the invoice in your software and produce a JSON file that conforms to the e-invoice schema provided by GSTN.
Upload the JSON file to the Invoice Registration Portal (IRP), which validates the details, generates a unique Invoice Reference Number (IRN), and returns an e-invoice along with a QR Code.
Once approved, download the digitally signed e-invoice from the portal and share it with the buyer.
The following are the requisite details for generating an e-invoice under GST, no physical information is demanded.
Conclusion
E-Invoice under GST is a stepping stone for digitizing India's taxation mechanism. It infuses transparency, curbs tax evasion, and provides an easier way to comply for the taxpayer by entering an automated mode.
Since e-invoicing has been made mandatory for businesses with a turnover above ₹5 crore, the stakeholders must keep themselves abreast and learn the ways to interact with the system through compatible software or tools.
The government portal itself provides free generation of an e-invoice for any party, but they are free to choose any third-party solution if they want additional convenience.
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
Frequently Asked Questions (FAQs)
E-invoicing is a process whereby B2B invoices are electronically reported onto the GST portal and checked with an IRN (Invoice Reference Number) and QR code.
Businesses with a turnover of ₹5 crore or above (in any financial year since 2017–18) are required to issue the e-invoice.
E-invoicing applies only to B2B and export transactions for the moment.
Use of the official Invoice Registration Portal (IRP) for e-invoice generation is free of charge.
Invoices will be considered invalid under GST law, thereby making it difficult for the buyer to claim the Input Tax Credit (ITC).
Yes, an e-invoice can be cancelled on the IRP within 24 hours of generation.
Yes. After all, you have to upload the invoice data to the IRP and receive the IRN.
No special software is mandatory. However, your existing billing/accounting software must be able to generate invoices in the required JSON format. Many ERP systems and accounting software now have built-in e-invoicing functionality that works well with the GST portal.
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