Understanding Electronic Invoicing (e-Invoicing) under GST: Regulations, Scope, and Key Dates
Electronic invoicing (e-invoicing) under India's GST framework mandates specific businesses to digitally authenticate B2B invoices and other documents through the GSTN's Invoice Registration Portal (IRP). This system aims to streamline compliance, minimize data entry errors, and combat tax evasion by enabling real-time transaction tracking and automating GST return filings. Applicability depends on annual aggregate turnover, with varying thresholds implemented over time, and strict time limits for reporting invoices to the IRP.
e-Invoicing, also known as electronic invoicing, is a mandatory system under India's Goods and Services Tax (GST) framework. This system requires specific GST-registered businesses to generate an e-invoice for B2B transactions, credit notes, and debit notes. An invoice becomes an e-invoice once it is authenticated by a GSTN-authorised Invoice Registration Portal (IRP). This compliance measure is now vital for many businesses in India. This article will explore the e-invoicing system, its applicability, format, generation process, and key benefits.
What is e-Invoicing under GST?
e-Invoicing is a system where business-to-business (B2B) invoices and specific other documents are electronically validated by the GST Network (GSTN) for use on a designated e-invoicing portal. It does not involve creating invoices directly on a government portal. Instead, it requires submitting already generated standard invoices to a common e-invoice portal, thereby automating various reporting functions with a single input of invoice details. The GST Council, in its 35th meeting on June 21, 2019, decided to implement e-invoicing. Initially intended for large enterprises, its scope has since expanded to include smaller businesses. e-Invoice data is transmitted from the IRP to both the GST and e-way bill portals in real-time, eliminating the need for manual data entry when filing GSTR-1 and generating Part-A of e-way bills.
Who must generate an e-invoice?
The requirement for e-invoice generation depends on a taxpayer's aggregate annual turnover (AATO) in a financial year. The threshold for e-invoicing has been progressively lowered over time. As of August 1, 2023, businesses with an annual turnover exceeding Rs.5 crore must comply with e-invoicing rules, as per GST Notification 10/2023.
The e-invoice implementation timeline based on turnover criteria is as follows:
| Phase | Applicable to taxpayers having an aggregate turnover of more than | Applicable from | Notification number |
|---|---|---|---|
| I | Rs 500 crore | 01.10.2020 | 61/2020 – Central Tax and 70/2020 – Central Tax |
| II | Rs 100 crore | 01.01.2021 | 88/2020 - Central Tax |
| III | Rs 50 crore | 01.04.2021 | 5/2021 - Central Tax |
| IV | Rs 20 crore | 01.04.2022 | 1/2022 - Central Tax |
| V | Rs 10 crore | 01.10.2022 | 17/2022 – Central Tax |
| VI | Rs 5 crore | 01.08.2023 | 10/2023 - Central Tax |
If a business's turnover was below the threshold in the previous fiscal year but crosses it in the current year, e-invoicing becomes applicable from the start of the subsequent financial year. For instance, if a taxpayer's AATO exceeds the specified limit in FY 2024-25, they must comply with e-invoicing from FY 2025-26 onwards. The aggregate turnover considers the turnover of all GSTINs registered under a single PAN across India.
Where to generate e-invoices?
The CBIC (Central Board of Indirect Taxes and Customs) has designated common portals for e-invoice generation via Notification No.69/2019 – Central Tax. Under this electronic invoicing system, an Invoice Reference Number (IRN) is issued for each invoice by an Invoice Registration Portal (IRP), which is managed by the GST Network (GSTN). There are currently six IRPs. The National Informatics Centre (NIC) launched the initial IRPs at einvoice1.gst.gov.in and einvoice2.gst.gov.in. Other empaneled IRPs include Cygnet Infotech Private Limited, Clear (Defmacro Software Private Limited) at einvoice4.gst.gov.in, Ernst & Young LLP, and IRIS Business Services Limited.
Transactions & documents in e-Invoicing
The following transactions and documents are subject to e-invoicing requirements:
| Documents | Transactions |
|---|---|
| Tax invoices, credit notes and debit notes under Section 34 of the CGST Act | Taxable Business-to-Business sale of goods or services, Business-to-government sale of goods or services, exports, deemed exports, supplies to SEZ (with or without tax payment), stock transfers or supply of services to distinct persons, SEZ developers, and supplies under reverse charge covered by Section 9(3) of the CGST Act. |
Exclusions from e-Invoicing
Certain categories of registered persons are exempt from e-invoicing, irrespective of their turnover, as per CBIC Notification No.13/2020 – Central Tax (as amended):
| Notified Businesses | Documents | Transactions |
|---|---|---|
| 1)An insurer, a banking company or a financial institution, including an NBFC 2) A Goods Transport Agency (GTA) 3) A registered person supplying passenger transportation services 4) A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services 5) An SEZ unit (excluded via CBIC Notification No. 61/2020 – Central Tax) 6) A government department and Local authority (excluded via CBIC Notification No. 23/2021 – Central Tax) 7) Persons registered in terms of Rule 14 of CGST Rules (OIDAR) | Delivery challans, Bill of supply, financial or commercial credit note or debit note, bill of entry, and ISD invoices. | Any Business-to-Consumers (B2C) sales, Nil-rated or non-taxable or exempt B2B sale of goods or services, nil-rated or non-taxable or exempt B2G sale of goods or services, imports, high sea sales and bonded warehouse sales, Free Trade & Warehousing Zones (FTWZ), and supplies under reverse charge covered by Section 9(4) of the CGST Act. |
Time limit to generate e-Invoice
According to an advisory issued on the GSTN portal on November 5, 2024, the 30-day time limit for reporting e-Invoices to IRP portals has been extended for taxpayers with an AATO of Rs.10 crore and above. To allow sufficient time for compliance, these changes will take effect from April 1, 2025. Previously, from April 1, 2025, businesses with an AATO of Rs.10 crore+ were required to upload e-invoices within 30 days.
Below is a timeline of developments regarding the time-limit for generating e-invoices:
| Period | e-Invoice Reporting Requirement | Applicability (AATO Threshold) |
|---|---|---|
| Till Apr 30, 2023 | No fixed time limit for generating/reporting e-invoices | All taxpayers under e-invoicing |
| May 1, 2023 – Oct 31, 2023 | Govt announced 7-day time limit (but rule was not implemented) | Targeted at AATO ≥ Rs.100 crore (kept in abeyance) |
| From Nov 1, 2023 onwards | Mandatory reporting of documents to IRP within 30 days | AATO ≥ Rs.100 crore; extended to AATO ≥ Rs.10 crore from 1 Apr 2025 |
Process of getting an e-invoice
Under the e-invoicing system, the method for generating and uploading invoice details remains consistent. This can be achieved by importing data using an Excel tool, JSON files, or through API integration. The data then flows seamlessly for GSTR-1 preparation and e-way bill generation, with the e-invoicing system serving as the central mechanism for this integration. All taxpayers, regardless of turnover, must use 2-Factor Authentication (2FA) for e-invoice and e-way bill generation starting April 1, 2025.
Here are the stages involved in generating an e-invoice:
Step 1: Reconfigure ERP for e-invoicing format
Taxpayers must ensure their ERP system is configured to comply with PEPPOL standards. They should work with software providers to integrate the mandated e-invoicing schema and ensure all compulsory parameters notified by the CBIC are included.
Step 2: Choosing IRN generation method
Taxpayers primarily have two options for generating the Invoice Reference Number (IRN):
- The computer system's IP address can be whitelisted on the e-invoice portal for direct API integration or integration via a GST Suvidha Provider (GSP).
- The bulk generation tool can be downloaded to upload invoices in bulk. This tool generates a JSON file that can be uploaded to the e-invoice portal to create IRNs for multiple invoices.
Step 3: Feed the invoice details into IRP
After selecting an IRN generation method, create the invoice using the chosen ERP or billing software. All essential details, such as the billing name and address, supplier's GSTIN, transaction value, item rate, applicable GST rate, and tax amount, must be provided. Upload the invoice details, particularly the mandatory fields, to the IRP using a JSON file, an application service provider (app or GSP), or direct API. The IRP acts as the central registrar for e-invoicing authentication. Other interaction modes, such as SMS-based and mobile app-based options, are also available.
Step 4: IRP validation on invoice
The IRP validates the key details of the B2B invoice, checks for duplication, and generates an Invoice Reference Number (IRN) (hash) for reference. The IRN is generated based on four parameters: Seller GSTIN, invoice number, financial year (YYYY-YY), and document type (INV/DN/CN). The IRP generates the IRN, digitally signs the invoice, and creates a QR code in the Output JSON for the supplier. Additionally, the seller is notified of the e-invoice generation via email if provided in the invoice.
Step 5: Passing on the e-invoice details
The IRP transmits the authenticated payload to the GST portal for GST returns. If applicable, details are also forwarded to the e-way bill portal. The seller's GSTR-1 is automatically populated for the relevant tax period, which helps determine tax liability. Taxpayers can continue to print their invoices with their logo as they currently do. The e-invoicing system solely mandates that all taxpayers report invoices to the IRP in an electronic format. For a detailed understanding of the e-invoice generation process, refer to this step-by-step guide.
Benefits of e-Invoicing to businesses
e-Invoicing, introduced by GSTN, offers several benefits to businesses:
- It addresses a significant gap in GST data reconciliation, reducing mismatch errors.
- e-Invoices created on one software can be universally read, enabling interoperability and minimizing data entry mistakes.
- The system allows for real-time tracking of invoices generated by suppliers.
- It facilitates backward integration and automation of the GST return filing process, with relevant invoice details auto-populating various returns, especially for generating Part-A of e-way bills.
- Ensures faster availability of genuine input tax credit.
- Reduces the likelihood of audits or surveys by tax authorities, as transaction-level information is readily available.
- Provides faster and easier access to formal credit options, such as invoice discounting or financing, which is particularly beneficial for small businesses.
- Enhances customer relations and improves prospects for small businesses to collaborate with large enterprises.
How can e-invoicing curb tax evasion?
e-Invoicing plays a crucial role in curbing tax evasion through the following mechanisms:
- Tax authorities gain real-time access to transactions, as e-invoices must be compulsorily generated through the GST portal.
- The scope for invoice manipulation is reduced since invoices are generated before a transaction is executed.
- It minimizes the chances of fake GST invoices, ensuring that only genuine input tax credit can be claimed, as all invoices must be generated via the GST portal. By matching input credit with output tax details, GSTN can more easily track fraudulent tax credit claims.
What are the mandatory fields of an e-invoice?
e-Invoices must primarily adhere to GST invoicing regulations and also accommodate the invoicing practices of different industries in India. While many fields are optional, certain information is mandatory. Taxpayers can choose to fill in only the relevant fields.
The essential contents of the latest e-invoice format, as notified on July 30, 2020, via Notification No.60/2020 – Central Tax, include:
- 12 sections (mandatory + optional) and six annexures, totaling 138 fields.
- Five sections are mandatory (basic details, supplier information, recipient information, invoice item details, and document total), and seven are optional. Two annexures are mandatory: details of items and document total.
There are 30 compulsory fields that must be declared in an e-invoice. Some of these are:
| Sl. no. | Name of the field | List of choices/ specifications/sample Inputs | Remarks |
|---|---|---|---|
| 1 | Document Type Code | Enumerated List, such as INV/CRN/DBN | Type of document must be specified |
| 2 | Supplier_Legal Name | String Max length: 100 | Legal name of the supplier must be as per the PAN card |
| 3 | Supplier_GSTIN | Max length: 15 Must be alphanumeric | GSTIN of the supplier raising the e-invoice |
| 4 | Supplier_Address | Max length: 100 | Building/Flat no., Road/Street, Locality, etc. of the supplier raising the e-invoice |
| 5 | Supplier_Place | Max length: 50 | Supplier’s location such as city/town/village must be mentioned |
| 6 | Supplier_State_Code | Enumerated list of states | The state must be selected from the latest list given by GSTN |
| 7 | Supplier Pincode | Six digit code | The place (locality/district/state) of the supplier’s locality |
| 8 | Document Number | Max length: 16 Sample can be “ Sa/1/2019” | For unique identification of the invoice, a sequential number is required within the business context, time frame, operating systems and records of the supplier. No identification scheme is to be used. |
| 9 | Preceeding_Invoice_Reference and date | Max length:16 Sample input is “ Sa/1/2019” and “16/11/2020” | Detail of original invoice which is being amended by a subsequent document such as a debit and credit note. It is required to keep future expansion of e-versions of credit notes, debit notes and other documents required under GST. |
| 10 | Document Date | String (DD/MM/YYYY) as per the technical field specification | The date when the invoice was issued. However, the format under explanatory notes refers to ‘YYYY-MM-DD’. Further clarity will be required. Document period start and end date must also be specified if selected. |
The system also provides descriptions and sample inputs for each field. Certain fields from the e-way bill format, such as the sub-supply type, are now integrated into the e-invoice. Effective June 1, 2025, the Invoice Reporting Portal (IRP) will treat invoice/document numbers as case-insensitive during e-invoice generation, automatically converting them to uppercase before IRN generation. This change aligns with how invoice numbers are handled in GSTR-1.
Format of sample e-invoice
The official e-invoice format follows a structured layout to capture all necessary details for GST compliance.
Frequently Asked Questions
To whom will e-invoicing apply?
In the sixth phase of e-invoicing, taxpayers with a turnover exceeding Rs.5 crore in any financial year from 2017-18 onwards must comply with e-invoicing norms from August 1, 2023. This aggregate turnover includes all GSTINs under a single PAN across India. However, the government has exempted certain categories of businesses from e-invoicing requirements as outlined in the exclusions section.
Can an e-invoice be cancelled partially or fully?
An e-invoice cannot be cancelled partially but can be cancelled entirely. Upon cancellation, it must be reported to the IRP within 24 hours. After this 24-hour window, cancellation cannot be processed on the IRP and must be manually handled on the GST portal before returns are filed.
Will the bulk uploading of invoices for IRN generation be possible?
Invoices must be uploaded one at a time to the IRP. A business's ERP system needs to be designed to submit requests for individual invoice uploads.
Will there be a facility for e-invoice generation on the common GST portal?
No, invoices will continue to be generated using existing individual ERP or billing software used by businesses. The invoice must conform to the e-invoicing standard format and include all mandatory parameters. Direct invoice generation on a common portal is not currently planned.
What are the types of documents that are to be reported to the IRP?
Invoices issued by the supplier, credit notes, debit notes as per GST law, or any other document notified under GST law must be reported as an e-invoice.
What is the 7-day time limit for e-invoice?
The GSTN had previously announced that from May 1, 2023, taxpayers with an Annual Aggregate Turnover (AATO) of Rs.100 crore or more would need to generate e-invoices for tax invoices, credit, and debit notes within 7 days of the invoice date. However, this 7-day limit was deferred. Instead, a 30-day time limit was mandated from November 1, 2023, for taxpayers with an AATO of Rs.100 crore or more, applying to the reporting of tax invoices, credit notes, and debit notes to any notified IRP.
Is e-invoicing mandatory for 5 crore turnover?
Yes, e-invoicing is mandatory for businesses with a turnover exceeding Rs.5 crore in any financial year from 2017-18 onwards. This aggregate turnover includes all GSTINs under a single PAN across India. Certain exemptions are provided to specific categories of businesses.
Why is an e-invoice mandatory?
An e-invoice is mandatory for all eligible businesses in India. Failure to generate an e-invoice implies non-intimation of supply transactions to the government. Any invoice issued by an applicable taxpayer without an IRN is considered invalid under GST law. This is regarded as a non-issue of the invoice as per sub-rule (5) of Rule 48 of the CGST Rules and may result in penalties for non-compliance.
Who is exempted from an e-invoice?
The government has exempted certain categories of taxpayers from generating e-invoices, including:
- Insurers, banking companies, or financial institutions, including NBFCs.
- Goods Transport Agencies (GTA).
- Registered persons supplying passenger transportation services.
- Registered persons supplying services for admission to cinematographic film exhibitions in multiplex services.
- SEZ units (excluded via CBIC Notification No. 61/2020 – Central Tax).
- Government departments and local authorities (excluded via CBIC Notification No. 23/2021 – Central Tax).
- Persons registered under Rule 14 of CGST Rules (OIDAR).
What happens if I don't generate an e-invoice?
Not generating an e-invoice signifies a failure to inform the government about supply transactions. An invoice issued by an applicable taxpayer without an IRN is deemed invalid under GST law. This is considered a non-issue of the invoice under sub-rule (5) of Rule 48 of the CGST Rules, potentially leading to penalties for non-compliance.
What is the limit of an e-invoice in GST?
As of August 1, 2023, taxpayers with an Annual Aggregate Turnover (AATO) of Rs.5 crore or more are required to generate e-invoices.
Can we generate an e-invoice for an unregistered person?
No, an unregistered person cannot generate an e-invoice. e-invoicing is mandatory only for registered taxable persons and applies exclusively to B2B transactions with other GST-registered entities. However, supplies received from unregistered persons (subject to reverse charge) do not require e-invoicing.
What are the modes of generating e-Invoice?
The available methods for generating e-invoices under GST include:
- Web-based portals.
- API integration (either direct or through a GST Suvidha Provider).
- Excel or JSON file upload.
- Mobile app or SMS-based submission.
- Offline tools for manual data entry.
- Through third-party GSP applications.