GST e-Invoicing – Definition, Benefits & Procedure

GST e-Invoicing – Definition, Benefits & Procedure
GST e-Invoicing – Definition, Benefits & Procedure
06 September 2025
In today’s rapidly evolving business landscape, digital transformation is not just a trend—it’s a necessity. One such revolutionary step towards modernization is the introduction of e-Invoicing under GST (Goods and Services Tax) in India. But what exactly is e-Invoicing, and how does it relate to GST?

In this blog, we will break down everything you need to know about e-Invoicing under GST—

What it is?
Why it was introduced?
How does it work?
Eligibility & Key features
Step by Step Generation of e-Invoice
The benefits it brings to businesses and the government
What is e-Invoicing?
E-Invoicing is the electronic generation of invoices in a standardized format that is directly linked to the GST portal. By integrating this system, businesses are required to generate invoices digitally, which are then authenticated by the Goods and Services Tax Network (GSTN) before they can be used for tax credits or refunds.

In simple terms, it’s an advanced system where invoices are validated by the government’s digital network.

Why Was e-Invoicing Introduced in India?
You might be wondering, why e-Invoicing? What made the government push for this change? Well, let’s take a closer look.

Reducing Tax Evasion: By linking invoices to the GST portal, every business transaction is tracked and validated in real time, making it much harder for businesses to evade taxes.
Improved Compliance: E-Invoicing helps businesses stay compliant with ease by automating many aspects of the process.
Faster Processing: The introduction of e-Invoicing means quicker GST refunds and fewer delays, between businesses and the government.
Seamless Data Exchange: For both businesses and the government, having a common digital platform for invoice management ensures that data is accurately exchanged, reducing reconciliation discrepancies.
How Does e-Invoicing Work?
Now that we understand the purpose, let’s explore how e-Invoicing actually works. Here’s the process broken down:

Generating the Invoice: The business generates an invoice using their ERP system (Enterprise Resource Planning). The invoice must comply with the GST format, which includes standard fields like the seller’s GSTIN, buyer’s GSTIN, invoice value, tax details, etc.
Uploading to the Invoice Registration Portal (IRP): Once the invoice is generated, it is uploaded to the designated Invoice Registration Portal (IRP), not the GST portal directly. The invoice details are transmitted in real time.
Invoice Validation: The IRP validates the information for correctness, checking for any errors, inconsistencies, or missing details.
Getting the IRN (Invoice Reference Number): If everything is in order, the IRP issues a unique IRN for that invoice. This number serves as an identifier and proves that the invoice has been validated.
QR Code Generation: Along with the IRN, a QR code is also generated. This QR code contains essential information, including the IRN and other invoice details, making it easier to verify the authenticity of the invoice.
Final Invoice Issuance: After receiving the IRN and QR code, businesses can finally issue the official e-Invoice to their customers, and it becomes eligible for GST credits and refunds.

Time limit to generate e-Invoice?
Who it Applies to: The 30-day time limit applies only to businesses with an AATO of ₹10 crore or more. Businesses with a turnover below this threshold are not subject to this specific time limit for now.
What Happens If You Miss the Deadline: If you fail to report an e-invoice to the IRP within 30 days, the portal will reject the invoice. An invoice that is not validated by the IRP is not considered a valid e-invoice under GST law.
Consequences of a Rejected Invoice:
The buyer cannot claim Input Tax Credit (ITC) on that transaction.
The business may face penalties for non-compliance.
The invoice may need to be re-issued, creating a significant administrative burden.
Eligibility for e-Invoicing under GST
E-Invoicing might sound like a tech-heavy process, so you may be wondering if your business needs to follow it. Let’s look at the eligibility criteria for e-Invoicing under GST.

Turnover Criteria: As of 1st August 2023, businesses with a turnover of ₹5 crores or more are required to comply with e-Invoicing. It’s important to keep an eye on GST updates, as thresholds may continue to evolve.
Types of Transactions Covered: The e-Invoicing mandate applies to B2B transactions (business-to-business), exports, and certain other transactions like supplies to SEZs (Special Economic Zones) on a Bill to/Ship to basis. However, B2C (business-to-consumer) transactions are exempted from the e-Invoicing requirement, as these transactions do not involve claiming input tax credits.
Exemptions: Not all businesses are required to comply with e-Invoicing. Some key exemptions include:
SEZ units (but not SEZ developers)
Government departments and local authorities
Insurance companies, banks, financial institutions, and NBFCs
Goods transport agencies (GTA)
Passenger transportation services
Cinema exhibition services

Key Features of e-Invoicing in GST
Let’s now discuss some of the key features that make e-Invoicing under GST a game-changer for businesses and the Government:

Unique IRN
QR Code
Real-time Data Sharing
Faster Refunds
Integrated with ERP Systems
Step by Step Generating E-invoicing?

Step 1: Generate the Invoice in Your Software

Use your existing accounting software
Adhere to the e-invoice schema
Include mandatory details: The invoice must contain specific information, such as:
GSTIN (GST Identification Number) of the supplier and recipient.
Invoice number and date.
Value of the transaction, including tax components (IGST, CGST, SGST).
HSN (Harmonized System of Nomenclature) or SAC (Services Accounting Code) codes for all goods or services.
Shipping and billing addresses.
Step 2: Choose an Upload Method

Once the invoice is ready, the data (in JSON format) needs to be sent to the government’s Invoice Registration Portal (IRP). You have several options for this:

API Integration
GST Suvidha Provider (GSP)
Offline Tools: The government’s e-invoice portal provides offline utilities (like Excel-based tools) for manual data entry and bulk uploading of invoices. This method is suitable for businesses with a smaller volume of transactions.
Web Portal: You can also log in to the IRP website and manually enter the invoice details.
Step 3: IRP Validation and IRN Generation

Data Validation
Duplication Check
Invoice Reference Number (IRN) Generation
QR Code

Benefits of e-Invoicing under GST

E-Invoicing isn’t just a compliance tool—it offers several advantages to both businesses and the government. Here are the top benefits:

Improved Compliance
Faster GST Refunds
Reduction in Tax Evasion
Better Data Management
Cost and Time Savings
Improved Efficiency
Final Thoughts:
E-Invoicing is a transformative step in India’s GST Registration & Reforms, designed to reduce errors, improve compliance, and ensure the seamless flow of data. It’s a win-win for businesses and the government—streamlining processes, enhancing transparency, and promoting efficiency.

Struggling with GST e-Invoicing compliance? ToraTax offers complete e-invoice solutions across Delhi NCR, Mumbai, Bangalore, Chennai, Lucknow, and 100+ cities. IRN generation, portal integration, and ongoing support.