E-invoicing under GST has changed how Indian businesses generate and report invoices. It brings automation, transparency, and faster compliance. Introduced to reduce tax evasion, this system connects invoices directly with the GST network. Therefore, understanding how it works is essential for growing businesses. How exactly does e-invoicing work under GST in India? Let’s break it down.
What Is E-Invoicing Under GST?
E-invoicing under GST is a system where B2B invoices are electronically authenticated by the Invoice Registration Portal (IRP). However, it does not mean creating invoices on the GST portal. Businesses still generate invoices using their own accounting software.
The key step is uploading invoice data in a prescribed JSON format to the IRP. The portal then validates the details and generates a unique Invoice Reference Number (IRN). Moreover, it adds a QR code and digitally signs the invoice. As of recent GST notifications, businesses with annual turnover above ₹5 crore must follow this system.
Step-by-Step: How the E-Invoice Process Works
Here’s how e-invoicing under GST works in practice:
- Invoice Generation: The supplier prepares a GST invoice in their accounting or ERP software with all required fields like GSTIN, item details, HSN/SAC codes, and taxes.
- Submit to IRP: The invoice data in JSON format is sent to the Invoice Registration Portal. This can be done via API, a bulk upload tool, or directly through the portal.
- Validation & IRN: The IRP checks the data for accuracy and issues an Invoice Reference Number (IRN) along with a digitally signed e-invoice and a QR code.
- Receive Authenticated Invoice: The supplier receives the authenticated e-invoice with IRN and QR code. This is now legally valid and can be provided to the buyer.
- Auto-Sharing with GST Systems: The validated invoice details are automatically shared with the GST and e-way bill portals, which helps auto-populate returns like GSTR-1.
Because the e-invoice is authorised before it reaches the buyer, the system reduces duplicate or fake invoices and smooths GST return filing.
Who Must Use E-Invoicing and Compliance Rules:
Under current rules, e-invoicing under GST applies to most B2B transactions for GST-registered businesses with turnover above ₹5 crore.
From April 1, 2025, businesses with an annual turnover of ₹10 crore or more must upload their e-invoices to the IRP within 30 days from the invoice date. Late submission can lead to invalid invoices and loss of Input Tax Credit (ITC). Certain categories like banks, insurers, and transport agencies may have specific exemptions. Always check the latest CBIC notifications before filing.
Benefits of E-Invoicing for Indian Businesses:
E-invoicing under GST brings several advantages:
- Error Reduction: A single reporting step eliminates manual data entry across multiple returns.
- Faster ITC Claims: Since invoices are shared directly with the GST portal, buyers see eligible credit sooner.
- Fraud Control: Real-time authentication makes fake invoices harder to use.
- Auto-Population: Returns like GSTR-1 and Part-A of e-way bills get auto-filled. Tally Solutions
Conclusion:
E-invoicing under GST is now a core part of India’s indirect tax system. It is shaping how businesses handle GST reporting. Technology upgrades and staff training will help companies adapt and benefit from automation. As India’s tax system becomes more digital, early preparation pays off. Explore more GST and tax insights now!
– Ketaki Dandekar (Team Arthology)
Read more about How e-Invoicing Works Under GST here – https://cleartax.in/e-invoicing