The introduction of e-invoicing under GST has been a significant step towards making India’s tax system more transparent and efficient. It eliminates the need for paper invoices and integrates businesses with the GST network (GSTN) for quicker and more secure transactions.
In this blog, we will explain everything you need to know about e-invoicing, its applicability, and how to generate e-invoices under GST.
🔎 What is E-Invoicing?
E-Invoicing is the electronic generation of invoices in a structured format (JSON) that is uploaded to the GST portal, and an Invoice Reference Number (IRN) is generated. This system aims to ensure real-time verification of invoices and improve compliance.
✅ Applicability of E-Invoicing
As per the latest GST rules, e-invoicing is mandatory for businesses meeting certain criteria. Let’s break it down:
1. Turnover Limit
E-invoicing is mandatory for businesses whose aggregate turnover in the previous financial year exceeds ₹10 crore. This applies to:
- Manufacturers
- Traders
- Service providers
- Exporters
2. Supplies Covered
E-invoicing is applicable for the following:
- B2B (Business-to-Business) transactions
- Exports (B2B and B2C)
- Government contracts
- E-commerce sales (through registered platforms)
3. Exemptions
E-invoicing is not mandatory for:
- Businesses with turnover below ₹10 crore
- Certain specific industries (e.g., insurance, banking, and financial services)
- Consumers (B2C invoices)
⚠️ Note: The limit of ₹10 crore applies to aggregate turnover, not individual transactions.
📝 Process of E-Invoicing Under GST
If your business falls under the applicability criteria, here’s how to generate and upload e-invoices:
Step 1: Generate E-Invoice in Your Accounting System
- Use GST-compliant accounting software that is capable of generating e-invoices in the prescribed JSON format.
- Ensure the software is API integrated with the GST portal.
Most leading accounting software and ERPs have built-in features for e-invoicing.
Step 2: Upload Invoice to GST Portal
- After generating the e-invoice in your system, you need to upload it to the GST portal.
- The GST portal will validate the invoice and generate an Invoice Reference Number (IRN) and QR code.
Step 3: Receive IRN and QR Code
- Once the invoice is uploaded, you’ll receive an IRN (a unique identification number for the invoice).
- A QR code is also generated that can be scanned for verification.
- These details must be included on the physical or digital copy of the invoice for easy reference.
Step 4: Share the E-Invoice with Your Buyer
- After generating the IRN, the e-invoice becomes valid.
- You can share the invoice with your buyer in PDF format along with the IRN and QR code.
- The buyer can use the IRN to verify the invoice and claim Input Tax Credit (ITC).
Step 5: Upload to the GST System for Filing Returns
- Once the e-invoice is generated and verified, it gets automatically reflected in your GSTR-1 return.
- This saves you time when filing GST returns as the invoice data will already be available for reconciliation.
📊 Key Features of E-Invoicing
- Real-time Authentication: Every invoice is validated in real-time before being issued, reducing fraud.
- Automated Data Entry: E-invoicing directly feeds into your GST returns, reducing manual errors.
- Cross-Border Integration: It simplifies international trade and exports by generating standardized invoices.
- GST Compliance: E-invoices make it easier for businesses to stay GST-compliant and minimize the risk of non-compliance.
🚀 Benefits of E-Invoicing
1. Reduced Errors
Automated invoice generation minimizes manual mistakes like wrong HSN/SAC codes, tax rates, etc.
2. Improved Efficiency
With e-invoicing, businesses don’t need to print or physically send invoices. Everything is managed electronically.
3. Enhanced Transparency
E-invoicing reduces chances of tax evasion and ensures transparency in all transactions.
4. Faster Input Tax Credit (ITC)
The data from e-invoices gets automatically reflected in your GSTR-2A and GSTR-2B, speeding up the process of claiming ITC.
⚠️ Common Issues Faced with E-Invoicing
- Software Integration: Small businesses may face challenges in integrating e-invoicing with existing accounting systems.
- Data Errors: Incorrect entries (e.g., HSN codes or tax rates) can cause invoice rejection.
- Turnover Limitation Confusion: Businesses may be confused about the ₹10 crore turnover limit.
📅 Important Deadlines
- E-invoicing is mandatory from: 1st October 2020, for businesses with a turnover of ₹500 crore or more.
- For businesses with turnover above ₹10 crore, the implementation was extended in phases until 2025.
🧾 Final Words
E-invoicing is a major leap forward in GST compliance. It reduces errors, improves efficiency, and helps businesses stay transparent and compliant with government regulations.
📞 Need Help With E-Invoicing?
If you are struggling with e-invoicing setup, GST compliance, or any related issues,
feel free to contact us:
🧾 Taxeasy Solution
📍 Supaul Bazar, Biraul,
Darbhanga, Bihar – 847203
📞 Mob: 6289187606
📧 Email: jhajp96@gmail.com
