E-Invoicing Under GST: Meaning, Applicability, Process, Benefits & Latest Rules

 

E-Invoicing under GST is one of the most important compliance reforms introduced by the Government of India to improve transparency, reduce fake billing, and ensure smooth GST reporting. Over the years, e-invoicing has become mandatory for a large number of taxpayers and is now a key part of GST compliance for businesses.

In this article, we will understand what e-invoicing is, who is required to generate it, the step-by-step process, latest legal provisions, and its impact on GST return filing.

What is E-Invoicing Under GST?

E-Invoicing (Electronic Invoicing) under GST refers to the system where specified taxpayers are required to upload their invoice details on the Invoice Registration Portal (IRP) and obtain a unique reference number called the Invoice Reference Number (IRN).

Once the invoice is uploaded on the IRP:

  • The invoice gets authenticated
  • A QR Code is generated
  • An IRN (Invoice Reference Number) is issued
  • The invoice becomes valid as per GST rules

It is important to note that e-invoicing does not mean creating invoices on the GST portal. The invoice is still generated in the taxpayer’s accounting software (Tally, SAP, Busy, etc.), but the invoice data is uploaded to IRP for verification.

Legal Provisions for E-Invoicing Under GST

E-invoicing is governed by the following provisions under GST law:

1. Section 31 of CGST Act, 2017

It deals with issuance of tax invoices, credit notes and debit notes.

2. Rule 48(4) of CGST Rules, 2017

This is the main rule that mandates e-invoicing for certain categories of taxpayers. It states that specified registered persons must prepare invoices by uploading the details on IRP and obtain IRN.

3. Notification & CBIC Clarifications

The government has issued multiple notifications and circulars expanding e-invoice applicability and specifying procedural requirements.

Who is Required to Generate E-Invoice Under GST?

E-invoicing is mandatory for taxpayers whose Aggregate Annual Turnover exceeds the prescribed limit.

Current Threshold

As per the latest provisions, e-invoicing is applicable to businesses whose:

Aggregate Turnover exceeds ₹5 Crore in any preceding financial year (PAN-based turnover).

(Threshold may be revised by the government from time to time, so businesses should keep checking updates.)

Latest Update: 30-Day Time Limit for Reporting E-Invoices

A major recent compliance update is the introduction of a time limit for generating IRN.

Rule

Taxpayers covered under e-invoicing must upload invoices on IRP within 30 days from the invoice date.

If the invoice is not reported within the allowed period:

·       IRP will not generate IRN

·        Invoice will not be treated as valid e-invoice

·       Risk of penalties and ITC issues

This rule is mainly applicable to large taxpayers as notified by GST authorities.

Types of Transactions Covered Under E-Invoicing

E-invoicing is mandatory for the following documents:

Documents Covered

  • Tax Invoice
  • Credit Note
  • Debit Note

Types of Supplies Covered

  • B2B (Business to Business) supplies
  • Exports
  • Deemed exports
  • Supplies to SEZ units/developers
  • Reverse charge supplies (B2B)

Transactions Not Covered Under E-Invoicing

E-invoicing is not applicable in certain cases such as:

  • B2C invoices (currently IRN is not mandatory for B2C, but QR code may be required)
  • Certain notified entities like:
    • Banks and NBFCs
    • Insurance companies
    • Goods Transport Agencies (GTA)
    • Passenger transport services
    • Cinema exhibitors
    • Government departments (in some cases)

(Exemptions are subject to government notifications.)

What is IRN in E-Invoicing?

IRN (Invoice Reference Number) is a unique number generated by the IRP system for every e-invoice.

It is generated based on:

  • Supplier GSTIN
  • Invoice number
  • Financial year

Once IRN is generated, the invoice is considered officially registered.

What is QR Code in E-Invoicing?

The QR code is generated along with IRN and contains important invoice details such as:

  • Supplier GSTIN
  • Recipient GSTIN
  • Invoice number
  • Invoice date
  • Invoice value
  • HSN code
  • IRN number

This QR code helps in quick verification of the invoice.

Step-by-Step Process of Generating E-Invoice Under GST

Here is the practical process of generating an e-invoice:

Step 1: Create Invoice in Accounting Software

The taxpayer prepares the invoice in their billing/accounting system such as:

  • Tally Prime
  • BUSY
  • SAP
  • Zoho
  • Marg ERP
  • Custom ERP

Step 2: Convert Invoice into JSON Format

The invoice details are converted into a standard JSON format as prescribed by GSTN.

Most accounting software generates JSON automatically. Step 3: Upload JSON on IRP Portal

The JSON file is uploaded to the Invoice Registration Portal (IRP).

Step 4: IRP Validates Invoice Data

The IRP verifies:

  • GSTIN validity
  • invoice duplication
  • schema format
  • tax calculations

Step 5: IRN and QR Code Generated

After validation:

·       IRN is generated

·       QR Code is generated

·       Signed e-invoice is returned to taxpayer

Step 6: Invoice Data Auto-Populated in GST Returns

Once IRN is generated, invoice data automatically flows into:

  • GSTR-1
  • E-way bill system (if applicable)

This reduces manual work and errors.

How E-Invoicing Helps in GST Return Filing

E-invoicing makes return filing easier because:

  • Invoice details auto-populate in GSTR-1
  • Data becomes available for buyer’s GSTR-2B
  • Helps in faster reconciliation of ITC
  • Reduces mismatch notices from department

E-Invoice and E-Way Bill Integration

E-invoicing is integrated with the e-way bill portal.

If transportation details are provided during IRN generation, the system can also generate the e-way bill number (EBN) automatically.

This saves time and improves compliance.

Penalty for Non-Compliance of E-Invoicing

Non-compliance with e-invoice rules can lead to serious consequences.

If e-invoice is applicable but not generated:

  • Invoice may be treated as invalid
  • Penalty for non-issuance of invoice may apply
  • ITC may be denied to recipient
  • Increased risk of GST notices and audits

Penalty Amount

As per GST provisions, penalty can be:

  • ₹10,000 per invoice or
  • Amount of tax involved (whichever is higher)

(Depending upon the nature of default.)

Benefits of E-Invoicing Under GST

E-invoicing provides multiple advantages for both businesses and the government.

Major Benefits

·       Reduces fake invoicing and tax fraud

·       Improves ITC matching and transparency

·       Auto-population of returns saves time

·       Fewer GST notices due to mismatch

·       Better accuracy in tax calculation

·       Faster generation of e-way bill

·       Encourages digitization and standardization

Common Mistakes Businesses Make in E-Invoicing

Many businesses face rejection while generating IRN due to basic errors such as:

  • Wrong GSTIN of buyer
  • Duplicate invoice number
  • Incorrect invoice date format
  • Wrong HSN/SAC
  • Incorrect taxable value or GST rate
  • Not uploading invoice within prescribed time limit

To avoid these issues, businesses should regularly update their billing software and train staff properly.

Important Compliance Points to Remember

Here are some important compliance tips for taxpayers:

  • Always maintain unique invoice numbering
  • Upload invoices to IRP within the time limit
  • Ensure correct GSTIN and place of supply
  • Mention IRN and QR code on invoice print
  • Keep backup of signed JSON file
  • Regularly reconcile e-invoice data with GSTR-1 and GSTR-2B

Conclusion

E-Invoicing under GST is a revolutionary step towards creating a transparent and technology-driven taxation system in India. It not only simplifies return filing but also reduces fraud, improves ITC flow, and ensures better compliance.

With strict provisions like mandatory applicability based on turnover and 30-day reporting limit, businesses must implement e-invoicing in their accounting system without delay.

If your turnover crosses the prescribed threshold, e-invoicing is no longer optional — it is a mandatory legal compliance under GST.


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