What is GST e-invoicing? E-invoicing under GST requires businesses with aggregate turnover above Rs. 5 crore to report every B2B invoice to the government's Invoice Registration Portal (IRP) and obtain an Invoice Reference Number (IRN). The IRP validates invoice data, generates a digitally signed QR code, and auto-populates GSTR-1. Non-compliance attracts a penalty of Rs. 10,000 per invoice and denies the buyer's ITC claim (CGST Rules, Rule 48(4); Notification 10/2023-CT).
E-invoicing is not a new format of invoice. It is a system where your existing invoice data is reported to a central government portal, validated in real time, and assigned a unique identity. The invoice continues to be issued by your ERP or billing software. The only difference is that it now carries an IRN and a QR code that the government can verify.
Since its phased rollout starting October 2020, e-invoicing has expanded from large enterprises (Rs. 500 crore+) down to businesses with Rs. 5 crore turnover. This guide covers who must comply, how the system works, exemptions, penalties, and practical steps for implementation.
Who Must Generate E-Invoices
E-invoicing is mandatory for every GST-registered person whose aggregate annual turnover exceeded Rs. 5 crore in any financial year from FY 2017-18 onwards.
Turnover Threshold History
| Effective Date | Turnover Threshold | Notification |
|---|---|---|
| 1 October 2020 | Rs. 500 crore | 61/2020-CT |
| 1 January 2021 | Rs. 100 crore | 88/2020-CT |
| 1 April 2021 | Rs. 50 crore | 05/2021-CT |
| 1 April 2022 | Rs. 20 crore | 01/2022-CT |
| 1 October 2022 | Rs. 10 crore | 17/2022-CT |
| 1 August 2023 | Rs. 5 crore | 10/2023-CT |
Aggregate turnover includes taxable supplies, exempt supplies, exports, and inter-state supplies across all GSTINs under the same PAN. It does not include GST collected (tax amount).
Once applicable, always applicable: If your turnover crossed Rs. 5 crore in any year since FY 2017-18, you must generate e-invoices even if your current year turnover falls below Rs. 5 crore.
Transactions Covered and Not Covered
E-Invoice Required
- B2B tax invoices (supplies to registered persons)
- Credit notes issued to registered persons
- Debit notes issued to registered persons
- Export invoices (with or without payment of IGST)
- Supplies to SEZ developers
E-Invoice Not Required
- B2C invoices (supplies to unregistered persons or consumers)
- Bill of supply (exempt or nil-rated goods)
- Import transactions (handled through customs, not GST e-invoicing)
- Delivery challans
- Job work challans
- Payment vouchers
- Self-invoices under reverse charge (where the recipient is the taxpayer)
Exempt Categories
The following registered persons are exempt from e-invoicing regardless of turnover (Notification 13/2020-CT as amended):
| Category | Reason for Exemption |
|---|---|
| Banking companies (including co-operative banks) | Regulated by RBI, separate reporting framework |
| NBFCs registered with RBI | Same as banking companies |
| Insurance companies | Regulated by IRDAI |
| Goods Transport Agencies (GTAs) | Simplified compliance for transport sector |
| Passenger transport service providers | Public transport operators |
| Cinema and multiplex admission services | B2C nature of transactions |
| SEZ units | Separate SEZ compliance framework |
| Government departments | Sovereign entities |
| Local authorities | Municipal bodies, panchayats |
| OIDAR service providers | Online information and database access, cross-border rules apply |
SEZ developers are NOT exempt. Only SEZ units (businesses operating within an SEZ) are exempt. SEZ developers who build and maintain the zone must comply if turnover exceeds the threshold.
How E-Invoicing Works: Step by Step
Step 1: Generate Invoice in Your System
Create the invoice in your ERP, accounting software, or billing system as usual. The invoice must contain all mandatory fields per GST rules (supplier GSTIN, recipient GSTIN, HSN codes, tax rates, invoice number, date, etc.).
Step 2: Report to IRP
Your software sends the invoice data in JSON format (Form GST INV-01) to the Invoice Registration Portal (IRP). The government has authorized multiple IRPs:
| IRP | URL |
|---|---|
| NIC (National Informatics Centre) | einvoice1.gst.gov.in |
| IRP 2 (Cygnet) | einvoice2.gst.gov.in |
| IRP 3 (ClearTax) | einvoice3.gst.gov.in |
| IRP 4 (IRIS) | einvoice4.gst.gov.in |
Step 3: IRP Validates and Returns IRN
The IRP validates the JSON against the schema (approximately 50 mandatory fields), checks for duplicate invoice numbers, and if valid:
- Generates a 64-character IRN (Invoice Reference Number)
- Creates a digitally signed QR code containing key invoice details
- Returns both to your system
Step 4: Print Invoice with IRN and QR Code
Your system embeds the IRN and QR code on the printed invoice. The buyer can scan the QR code to verify the invoice on the GST portal.
Step 5: Auto-Population in GST Returns
Once an IRN is generated, the invoice data auto-populates in your GSTR-1 (outward supply return). You do not need to enter these invoices manually in GSTR-1. The buyer sees the invoice in their GSTR-2B for ITC matching.
JSON Schema: Key Fields
The e-invoice JSON schema (Form GST INV-01) is standardized across all ERP systems. Key sections:
| Section | Key Fields |
|---|---|
| Transaction Details | Supply type (B2B/SEZWP/SEZWOP/EXPWP/EXPWOP), document type (INV/CRN/DBN) |
| Supplier Details | Legal name, GSTIN, address, state code, PIN code |
| Recipient Details | Legal name, GSTIN, address, state code, PIN code |
| Item Details | HSN code, description, quantity, unit, unit price, taxable value |
| Tax Details | CGST rate and amount, SGST rate and amount, IGST rate and amount, cess |
| Document Details | Invoice number, invoice date, total invoice value |
| E-Way Bill Details | Transport mode, vehicle number, distance (optional, for auto-generating e-way bill) |
Tip: If you provide transport details in the e-invoice JSON, the system can auto-generate an e-way bill simultaneously, saving a separate e-way bill generation step.
30-Day Reporting Rule
From 1 April 2025, businesses with aggregate turnover of Rs. 10 crore or more must report invoices to IRP within 30 days of the invoice date.
| Turnover | Reporting Deadline |
|---|---|
| Rs. 10 crore and above | Within 30 days of invoice date |
| Rs. 5 crore to Rs. 10 crore | No time limit (report before filing GSTR-1) |
Consequence of late reporting: The IRP rejects invoices reported after 30 days. You cannot obtain an IRN for that invoice. The invoice is treated as invalid, the buyer cannot claim ITC, and you face penalty exposure.
Cancellation and Amendment
Cancellation
An e-invoice can be cancelled on the IRP within 24 hours of IRN generation. After 24 hours, cancellation on IRP is not possible. You must issue a credit note (which itself requires an IRN) and cancel the invoice in your GSTR-1.
Amendment
There is no amendment facility on the IRP. If invoice details need correction after IRN generation:
- Cancel the original e-invoice (within 24 hours) and generate a new one, OR
- Issue a credit note against the original invoice and raise a fresh invoice with corrected details
Penalties for Non-Compliance
| Violation | Penalty | Legal Provision |
|---|---|---|
| Not generating e-invoice when required | Rs. 10,000 per invoice or 100% of tax, whichever is higher | Section 122 CGST Act |
| Invoice without valid IRN | Invoice treated as not issued; buyer's ITC denied | Rule 48(5) CGST Rules |
| Late reporting (30-day rule) | IRN rejected by portal; invoice invalid | Notification 17/2025-CT |
ITC impact is the bigger risk. Beyond the penalty on you, your buyer loses ITC on the invoice. This creates friction in the supply chain: large buyers will refuse to transact with suppliers who do not comply with e-invoicing.
E-Invoice vs E-Way Bill
| Feature | E-Invoice | E-Way Bill |
|---|---|---|
| Purpose | Invoice authentication and reporting | Tracking movement of goods |
| When required | B2B invoices above threshold | Movement of goods above Rs. 50,000 |
| Portal | einvoice1.gst.gov.in (IRP) | ewaybillgst.gov.in |
| Output | IRN + QR code | EWB number |
| Validity | No expiry | Based on distance (1 day per 200 km) |
| Auto-generation | E-way bill can be auto-generated from e-invoice | E-invoice cannot be auto-generated from e-way bill |
If you include transport details (vehicle number, mode, distance) in the e-invoice JSON, Part A of the e-way bill is auto-generated. You only need to update Part B (vehicle details) if they change during transit.
Implementation Checklist for Businesses
-
Check applicability: Verify if your aggregate turnover crossed Rs. 5 crore in any year since FY 2017-18. Check under each PAN, not per GSTIN.
-
Register on IRP: Log into einvoice1.gst.gov.in with your GSTIN credentials. Enable API access if your ERP supports direct integration.
-
Update your ERP/software: Ensure your billing software supports e-invoice JSON generation and can send data to IRP via API. Most accounting software (Tally, Zoho Books, Busy, SAP) have built-in e-invoice modules.
-
Map HSN codes: Every line item must have a valid HSN code (minimum 4 digits for turnover above Rs. 5 crore, 6 digits for turnover above Rs. 5 crore in some categories). Incorrect HSN codes cause IRP rejection.
-
Test with sandbox: IRP provides a sandbox environment for testing. Run a few test invoices before going live.
-
Train your team: Ensure the invoicing team understands IRN, QR code, 24-hour cancellation window, and the 30-day reporting rule.
-
Set up monitoring: Track IRN generation status daily. Failed API calls or rejected invoices must be resolved before GSTR-1 filing.
Common Errors and How to Fix Them
| Error | Cause | Fix |
|---|---|---|
| "Duplicate IRN" | Same invoice number already reported | Check if IRN was already generated. Use a different invoice number if the original was cancelled. |
| "Invalid GSTIN" | Recipient GSTIN inactive or incorrect | Verify recipient GSTIN on the GST portal before invoicing |
| "HSN code invalid" | HSN code not recognized or wrong digit count | Use 4-digit or 6-digit HSN from the official tariff schedule |
| "Invoice date in future" | Invoice date is after the current date | Correct the invoice date. IRP does not accept future-dated invoices. |
| "Time limit exceeded" | Invoice reported after 30 days (Rs. 10 crore+ turnover) | Cannot be resolved on IRP. Issue credit note and raise new invoice with current date. |
| API timeout | Network or server issue | Retry after a few minutes. IRP has scheduled maintenance windows (typically late night). |
Bulk E-Invoice Generation
For businesses generating hundreds of invoices daily, manual portal-based generation is impractical. Options:
API integration: Connect your ERP directly to IRP via API. This is the recommended approach for high-volume businesses. API documentation is available on the IRP portal.
Bulk upload via Excel: The IRP portal supports bulk upload of invoices via an Excel template (offline tool). Download the template, fill in invoice details, and upload. Suitable for businesses generating 50-200 invoices per day without ERP integration.
GSP (GST Suvidha Provider): Third-party GSPs like ClearTax, Cygnet, and IRIS offer e-invoice generation as a service. They handle API integration, error handling, and reconciliation.
Summary
| Point | Detail |
|---|---|
| Turnover threshold | Rs. 5 crore (any year since FY 2017-18) |
| Applicable transactions | B2B invoices, credit/debit notes, exports, SEZ developer supplies |
| Portal | einvoice1.gst.gov.in (and 3 additional authorized IRPs) |
| Output | 64-character IRN + digitally signed QR code |
| 30-day rule | Rs. 10 crore+ turnover must report within 30 days |
| Cancellation | Within 24 hours on IRP; after that, issue credit note |
| Penalty | Rs. 10,000 per invoice or 100% of tax |
| ITC impact | Buyer cannot claim ITC on invoice without valid IRN |
| Exemptions | Banks, NBFCs, insurers, GTAs, SEZ units, government |
Source: CGST Act, 2017, Section 122; CGST Rules, 2017, Rule 48(4); Notification 13/2020-Central Tax (exemptions); Notification 10/2023-Central Tax (Rs. 5 crore threshold); Notification 17/2025-Central Tax (30-day rule); einvoice1.gst.gov.in technical documentation.
