e-Invoicing under GST is a system wherein invoices are validated electronically through a government-approved portal. Just as companies need to generate an e-way bill when goods are in transit, similarly certain GST-registered taxpayers are also mandated to generate e-invoices for their B2B transactions.

Under this system, every eligible invoice, credit note, or debit note is first uploaded to the IRP, which is authorized by the GSTN. Immediately after verification from the IRP, it issues a unique IRN and digitally signs the document—officially converting a common GST invoice into an e-invoice.

This framework has now become an intrinsic part of GST compliance. Most medium and large businesses come under the ambit of e-invoicing, making it extremely important to understand how it works, who it applies to, what format is required, and how the generation of e-invoices can be done efficiently.

With the right tools in place, including automated platforms like Clear e-Invoicing, businesses can ensure seamless creation of invoices, minimize errors, maintain compliance, and assure real-time reporting to the GST system.

Key Takeaways

Compulsory e-Invoicing Turnover Limit: E-invoicing under GST is required for all businesses whose annual turnover exceeds ₹5 crore. This has been in effect since 1 August 2023, as notified through GST Notification No. 10/2023.

30-Day e-Invoice Reporting Window: Starting 1 April 2025, taxpayers with an AATO of ₹10 crore and above in the preceding financial year shall mandatorily upload their invoices on the IRP within 30 days from the date of invoice.

Reduced fraud and improved ITC accuracy: The e-invoicing system will reduce the issuance of fake invoices drastically as every invoice gets verified on the IRP. This will bring about greater transparency and ensure that only legitimate ITC can be availed.

e-Invoicing under GST: What is it?

E-invoicing is a system in which all B2B invoices and some other documents would get digitally verified from the GSTN through a particular Invoice Registration Portal (IRP). It must be noted that businesses do not create invoices on the government portal. Businesses generate invoices in their billing software and then upload it to IRP for authentication.

Once uploaded, the portal verifies the invoice and generates an IRN with a QR code assigned to it. This one submission allows the invoice details to automatically flow into the GST returns system and the e-way bill system removing the need for repetitive manual data entry.

The introduction of e-invoicing was first approved by the GST Council during its 35th meeting on 21 June 2019. Initially launched for large enterprises, the scope gradually expanded to medium and smaller businesses as the threshold limits of turnover came down. Today, the system makes sure that invoice data is shared seamlessly and in real time with both GST and e-way bill portals, thereby enhancing accuracy and compliance and reducing the possibility of errors.

Who needs to issue an e-Invoice?

The requirement to issue e-invoices under GST is solely based on a business's Annual Aggregate Turnover (AATO). In multiple phases, the government has gradually reduced the limits of turnover. Hence, now more businesses have been brought under the electronic invoicing system.

If the business's turnover stays below the prescribed limit in the previous financial year but crosses the threshold in the current year, then e-invoicing will become mandatory from the beginning of the next financial year.

The moment the turnover of a taxpayer exceeds the applicable limit at any point in time during FY 2024–25, the businesses are required to issue e-invoices from FY 2025–26 onward. While calculating total turnover, the government considers the combined turnover of all GST registrations (GSTINs) under the same PAN across India and not just one location.

Transactions & Documents in e-Invoicing

The following documents and types of transactions fall under the scope of e-invoicing:

Where are e-invoices generated?

The CBIC has designated multiple official portals for generating e-invoices, as notified under Notification No. 69/2019 – Central Tax.

Under this system, every eligible invoice will be given a unique Invoice Reference Number (IRN) by the IRP when it is uploaded to the portal. The IRPs are operated under the GSTN and form the backbone of the e-invoice system.

Accordingly, NIC first deployed the IRP at einvoice1.gst.gov.in, followed by a second portal at einvoice2.gst.gov.in to manage greater volumes of traffic with seamless operations.

Apart from NIC, the following private entities have been authorized as IRPs:

• ·        Cygnet Infotech Private Limited
• ·        Clear (Defmacro Software Private Limited)
• ·        Ernst & Young LLP
• ·        IRIS Business Services Limited

Taken together, these six IRPs will facilitate secure, real-time authentication of invoices across the GST ecosystem.

Exclusions from e-Invoicing

Irrespective of the level of turnover, the following classes of registered persons are presently exempt from the e-Invoicing requirement. These exemptions are provided under Notification No. 13/2020 – Central Tax issued by CBIC and subsequently amended.

Time Limit to Generate e-Invoice

The GSTN, through its advisory dated 5 November 2024, announced that the 30-day time limit for uploading e-invoices on IRP portals will apply to taxpayers whose AATO is ₹10 crore or more. To ensure a smooth transition and give adequate preparation time to businesses, this rule will be enforced starting 1 April 2025.

Below is a revised version of the timeline showing how the government gradually introduced time-limits for reporting e-invoices on IRP portals:

Process of Generating an e-Invoice

Under the GST e-invoicing framework, the basic procedure for creating and uploading invoice data remains unchanged. Businesses can continue preparing invoices through their accounting software and upload details using Excel/JSON utilities or through API integration—either directly or with the support of a GST Suvidha Provider (GSP). Once uploaded, the system automatically pushes the data to GSTR-1 and the e-way bill portal, making e-invoicing a central hub for automated compliance.

Below is a simplified breakdown of all the steps involved in generating an e-invoice:

Step 1: Set up your ERP to Support e-Invoicing

This means every business has to update its billing or ERP software to align with the PEPPOL framework, introduce the e-invoice schema, and all the mandatory fields that have been prescribed by CBIC. Vendors of software solutions or internal IT departments will have to realign ERP settings to meet these standards.

Step 2: Choose IRN Invoice Reference Number Generation Mode

The two main directions businesses can take are:

1.     API Integration (Direct or via GSP):

The direct API connection can be enabled by whitelisting the IP address of the system at the e-invoice portal, or it may be integrated through a GST Suvidha Provider like ClearTax.

2.     Bulk Generation Tool:

The government provides a bulk upload utility for high-volume invoicing. Businesses can prepare the invoices at their ERP, convert them into JSON using the utility provided, and then upload them in bulk on IRP.

Step 3: Upload Invoice Information to IRP

After the selection of the method, in the ERP/billing software, invoice details will have to be filled up regarding customer name, address, GSTIN, item details, tax rates, and totals.

From 1 April 2025, all taxpayers irrespective of turnover will have to use two-factor authentication for both e-invoicing as well as e-way bill generation.

The completed invoice data is then sent to the Invoice Registration Portal via JSON file, app-based integration, GSP, or API connection. IRP is the official validation and registration system. Additional modes include SMS-based and mobile applications.

Step 4: IRP Verification and IRN Generation

It examines key elements of the invoice, checks for duplication, and generates a unique Invoice Reference Number.

This IRN is generated using four elements:

• ·        Supplier GSTIN
• ·        Invoice number
• ·        Financial year (YYYY–YY)

·        Document type (Invoice/Credit Note/Debit Note)

After verification, IRP digitally signs the invoice and generates a QR code for the supplier. Additionally, if the email ID of the seller is mentioned, a notification is sent confirming e-invoice registration.

Step 5: Transmission of e-Invoice Data

Once the IRP has been authenticated, invoice details are automatically shared with: GST Portal - for auto-populating GSTR-1 E-way Bill Portal - wherever applicable.

This helps determine outward tax liability and reduces manual data entry.

Businesses can continue printing invoices with their usual logo and layout. The only requirement is that every eligible invoice needs to be electronically reported to the IRP.

Benefits of e-Invoicing for Businesses 

The implementation of e-invoicing under GST offers multiple advantages for businesses:

• It eliminates the long-standing issue of data mismatches by ensuring accurate, real-time reconciliation of invoice details.

• Since e-invoices follow a standardized format, invoices generated in one system can easily be read by another, reducing manual entry and minimising errors.

• Businesses and buyers gain real-time visibility over invoices uploaded by suppliers, improving transparency and tracking.

• GST return filing becomes more automated, as invoice data seamlessly flows into returns and even helps auto-generate Part-A of e-way bills.

• Input tax credit (ITC) becomes available faster and with greater accuracy because invoices are authenticated instantly.

• With complete transaction-level data readily available, the frequency of audits or inspections by tax authorities may reduce.

• Small and medium businesses can access credit more easily through invoice discounting or financing since e-invoices are verified and trusted.

Improved accuracy and transparency ultimately strengthen customer relationships and make small businesses more attractive partners for large enterprises.