E-invoicing under GST has become a vital compliance requirement for businesses in India. Initially rolled out for large enterprises, it is now applicable to a broader base of taxpayers, streamlining invoice reporting, improving tax transparency, and curbing evasion.

In this article, we’ll cover the meaning, applicability, process, and common questions surrounding e-invoicing under GST in India.

1. What is E-Invoicing under GST?

E-invoicing (electronic invoicing) is a system where B2B invoices are electronically uploaded and authenticated by the GSTN portal (Invoice Registration Portal – IRP) and assigned a unique Invoice Reference Number (IRN).

The IRN, along with a QR code, is then added to the invoice. This authenticated invoice becomes legally valid under GST.

🔖 Legal Basis: Rule 48(4) of the CGST Rules, 2017

2. Objectives of E-Invoicing

• Prevention of invoice fraud

• Real-time reporting of invoices to the government

• Auto-population of GSTR-1 and E-Way Bills

• Input Tax Credit (ITC) matching and reduced tax evasion

3. Applicability of E-Invoicing (as of 2025)

📌 Note: E-invoicing is applicable only for B2B, B2G, and export invoices — not for B2C invoices (retail sales).

4. Exempted Entities

Even if their turnover exceeds the threshold, the following are exempted from e-invoicing:

• SEZ Units (Developers may not be exempt)

• Insurance companies

• Banks and NBFCs

• Goods Transport Agencies (GTA)

• Passenger Transport Services

• Cinema exhibition services

5. How Does the E-Invoicing Process Work?

Here’s a step-by-step overview:

   Step 1: Generate Invoice in Accounting Software

Use a GST-compliant software that generates invoices in the prescribed JSON format.

   Step 2: Upload to IRP

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

Popular IRPs include:

• einvoice1.gst.gov.in

• einvoice2.gst.gov.in

• (Multiple IRPs are available now)

   Step 3: IRN Generation

The IRP validates the invoice and generates a unique Invoice Reference Number (IRN) and a signed QR code.

   Step 4: Invoice Download

The invoice, now digitally signed with IRN & QR code, is sent back to the supplier.
A copy is also shared with:

• GST portal (for auto-population in GSTR-1)

• E-Way Bill portal (for transport document generation)

6. Format of E-Invoice (Key Fields)

Mandatory fields include:

• Supplier & recipient GSTIN

• Invoice number and date

• HSN codes

• Taxable value, tax rates, and total

• IRN & signed QR code

7. E-Invoice Portal & Tools

• Official Portal: https://einvoice.gst.gov.in

• Sandbox (for testing): https://einvoice1.gst.gov.in

• Tools:

  • Bulk Invoice Upload Tool

  • QR Code Verification App

  • APIs for ERPs

8. Impact of E-Invoicing

✅ Benefits

• Seamless ITC matching

• Reduced invoice duplication/fraud

• Faster invoice processing

• Easier audit trail for tax authorities

⚠️ Challenges

• Initial setup for small businesses

• Software compatibility issues

• Real-time internet dependency

9. Penalty for Non-Compliance

Failure to issue e-invoice when applicable can result in:

• Invoice treated as invalid

• Penalty of ₹25,000 per invoice under Section 122 of CGST Act

• Loss of input tax credit for buyer

 FAQs –

1. Is e-invoicing applicable to B2C invoices?

  No. E-invoicing is only for B2B, B2G, and exports.

2. Do I still need to generate E-Way Bills separately?

  Yes, but IRP can auto-populate part of the E-Way Bill form to save time.

3. Can I generate e-invoices manually or through Excel?

❌ No. E-invoices must be generated using ERP/accounting software or GSTN tools in the prescribed format.

4. What happens if IRP is down?

GSTN has multiple IRPs now. If one fails, others can be used. Businesses are advised to generate invoices well in advance, especially during high volume days.

5. Do I need to sign the invoice after IRN is generated?

No. Once the IRP signs it digitally and returns the signed QR code, your invoice is considered valid. No further digital signature is needed.

6. Is cancellation of e-invoice allowed?

✅ Yes, but only within 24 hours of generation via IRP. After that, it must be adjusted through a credit note.

 Key Takeaways

E-invoicing under GST is now a critical compliance requirement for mid to large businesses in India. It brings transparency, simplifies reporting, and aligns India’s tax practices with global standards. If your business turnover exceeds ₹5 Cr, ensure you have the right systems in place to handle e-invoicing efficiently.