E-Invoice Under GST in India: What Businesses Need to Know

An e-invoice is a critical compliance requirement for businesses involved in B2B transactions. The system simplifies tax administration, minimises invoice fraud, and ensures seamless integration with GST returns and e-way bills.

Whether you are a major corporation or a budding MSME, e-invoicing is a must-have compliance tool. In this blog, we will understand what e-invoicing is under GST, how it works, its regulations, and its advantages.

What is e-Invoicing under GST?

An e-invoice under GST is an electronically signed invoice of B2B transactions created via the government Invoice Registration Portal (IRP). It has a distinct Invoice Reference Number (IRN) and QR code that guarantee authenticity and easy integration with GST returns and e-way bills.

The GST Council, in its 35th meeting on June 21, 2019, resolved to adopt a system of e-Invoicing. Although initially applied to large businesses, it has now been extended to include small businesses as well.

In contrast to paper or PDF invoices, e-invoicing standardises invoice data submission and automates GST reporting. It also reduces the number of errors and prevents tax evasion by verifying invoices in real time.

How e-Invoicing Works?

Businesses with an aggregate turnover of ₹10 crore or higher are required to create and report e-invoices. Businesses must now upload invoices to the IRP in a specified schema (JSON format), rather than just making them in accounting software. Here is how the e-Invoicing under GST works in India:

1. Invoice Creation: The supplier creates a standard invoice with their accounting or billing software, in the format of the e-invoicing schema, as defined by the government.
2. Generation of the Invoice Registration Number (IRN): The invoice information is submitted to the Invoice Registration Portal (IRP) directly via API or through intermediaries such as GST Suvidha Providers (GSPs) in JSON format.
3. IRP Authentication: The IRP authenticates the invoice information. Once the validation is successful, the IRP issues a unique Invoice Reference Number (IRN) and signs the invoice data digitally, including a QR code.
4. Data Sharing: The authenticated e-invoice is returned to the supplier and automatically sent to the GST portal (to be auto-populated in GSTR-1) and e-Way bill portal (where applicable).
5. Invoice Usage: The supplier can print the e-invoice with the IRN and QR code and send it to the recipient to keep a copy and reconcile it.

Latest e-Invoice Rules

The e-invoice limit for businesses is ₹5 crore. This rule is effective from August 1, 2023. Starting April 1, 2025, companies with an Annual Aggregate Turnover (AATO) of ₹10 crore+ are required to post e-invoices to the Invoice Registration Portal (IRP) within 30 days.

• Invoices are void if they are not posted to the IRP within 30 days after being issued.
• ITC claims are denied for non-registered invoices (those without an IRN and QR Code), which are legally invalid under GST.
• Detailed data, such as HSN codes, buyer and seller GSTINs, item-wise values, and invoice type, are necessary for an updated schema.

Why e-Invoicing Matters for Businesses?

Here are all the benefits of the prerequisites of GST e-invoice for businesses:

• It reduces errors and fraud as invoices are verified before being approved.
• It improves data reconciliation and lowers mismatches since invoice data is sent straight into GST returns.
• This expedites the input tax credit (ITC) process as invoices are submitted into the system instantaneously.
• Logistics and compliance teams save time with automatic e-way bill creation.

Risk of Compliance and Consequences of Non-Compliance

Here are the key consequences of not complying with the e-invoicing:

• Invalid Invoices: Invoices are legally invalid if they are not registered on IRP.
• Loss of ITC: If buyers are unable to claim ITC, they may refuse to pay.
• Penalties: Failure to generate an IRN may result in fines of up to ₹10,000 per invoice or the whole amount of GST owed.
• Business Disruption: Vendors run the risk of strained customer relations and logistical delays (e-way bills).

Factors to Consider for Seamless e-Invoicing

Here are some factors to consider:

• On-time Submission: Submit e-invoices to the Invoice Registration Portal (IRP) within 30 days of the invoice date to ensure compliance and prevent penalties.
• Correct Invoice Data: Be accurate and consistent in invoice information, including GSTIN, invoice value, HSN/SAC codes, and recipient information, to ensure easy validation.
• Vendor and Recipient Coordination: Coordinate with business partners to authenticate e-invoices and reconcile data regularly to ensure compliance that is free of errors.
• Integration with GST and E-way Bill Systems: Select systems or service providers that will automatically transfer e-invoice data to GST returns (GSTR-1) and e-way bill portals to minimise manual work.
• Data Security and Backup: Safeguard sensitive invoice information using secure systems and keep backups to use in the event of an audit and reference.
• Software Compatibility: To prevent technical errors, make sure that your accounting or ERP software is compatible with the GST-compliant e-invoice generation in the required JSON format.

Conclusion

e-Invoicing minimises errors, fraud and simplifies GST compliance. For businesses, particularly those that meet the turnover requirement, implementing e-invoicing is not only a regulatory requirement but also a strategic decision to increase operational efficiency, cash flow, and transparency. Staying in line with e-invoicing regulations will help companies avoid fines and put them in a good position in the Indian digital taxation landscape.

Frequently Asked Questions

What is India's current mandated e-invoicing turnover threshold?

Businesses with a turnover of at least ₹5 crore are required to use electronic invoicing as of September 2025. Over time, this threshold has decreased, going from ₹500 crore in 2020 to ₹5 crore now.

What will happen if a company doesn't promptly upload an electronic invoice?

For GST purposes, an invoice is considered invalid if it is not submitted to the Invoice Registration Portal (IRP) within the allotted 30-day period. This can result in:

• Buyers cannot claim ITC on such invoices
• Penalty of either 100% of the tax amount or ₹10,000 per invoice
• Penalty of ₹25,000 for incorrect e-invoice details

How does electronic invoicing enhance a company's cash flow?

Cash flow is accelerated via e-invoicing in several ways, including faster ITC claims by buyers to minimise conflicts and payment delays. Plus, invoices immediately flow into GST returns and e-way bills, and businesses spend less time on data input and reconciliation.

Can MSMEs use electronic invoicing as collateral to get financing?

Yes, MSMEs may obtain short-term finance more easily thanks to e-invoices. Every e-invoice includes a QR code and an IRN that the GST system has verified.

What is the time limit to upload an e-invoice?

To be considered valid in terms of GST compliance, an e-invoice must be uploaded to the IRP within 30 days of the date of issuing the invoice.