E-Invoicing is one of the most important compliance requirements under the GST system. It was introduced by the Government of India to bring transparency in invoicing, prevent tax evasion, and enable real-time reporting of transactions.
Under this system, invoices issued by businesses are first uploaded to the Invoice Registration Portal (IRP) where they are authenticated and assigned a unique Invoice Reference Number (IRN) before they become a valid GST invoice.
Many taxpayers still have confusion about when e-invoice is required, when it is not required, and the time limit for generating it. In this article, we will understand all these aspects in detail.
What is E-Invoicing under GST?
E-Invoicing does not mean generating invoices on government portal.
It simply means that the invoice prepared by the supplier must be reported to the GST Invoice Registration Portal (IRP). After validation, the system generates:
• Invoice Reference Number (IRN)
• QR Code
• Digital authentication
Once this process is completed, the invoice becomes a valid e-invoice under GST.
Turnover Limit for E-Invoicing Applicability
E-Invoicing is applicable based on aggregate turnover in any financial year since FY 2017-18.
| Turnover Threshold | Applicability Date |
| ₹500 Crore | 1 October 2020 |
| ₹100 Crore | 1 January 2021 |
| ₹50 Crore | 1 April 2021 |
| ₹20 Crore | 1 April 2022 |
| ₹10 Crore | 1 October 2022 |
| ₹5 Crore | 1 August 2023 |
Currently, e-invoicing is mandatory for taxpayers whose aggregate turnover exceeds ₹5 crore in any financial year from FY 2017-18 onwards.
Once applicable, the requirement continues even if turnover falls below the limit later.
Cases When E-Invoice Must Be Generated
E-invoice must be generated for the following transactions:
1. B2B Supply
Invoices issued to registered persons (GST registered buyers) require e-invoicing.
Example:
A manufacturer selling goods to a distributor registered under GST must generate an e-invoice.
2. Export Invoices
All export invoices must be reported to the IRP.
Example:
An exporter shipping garments to the USA must generate an e-invoice before export documentation.
3. Supplies to SEZ Units or SEZ Developers
Invoices issued to:
• SEZ Units
• SEZ Developers
must also be reported through the e-invoice system.
4. Credit Notes and Debit Notes
If e-invoicing is applicable to the taxpayer, then:
• Credit Notes
• Debit Notes
must also be reported on the IRP.
Cases When E-Invoice is NOT Required
Even if turnover exceeds ₹5 crore, e-invoice is not required in certain cases.
1. B2C Transactions
Invoices issued to unregistered customers do not require e-invoicing.
However, such invoices must contain dynamic QR code if turnover exceeds ₹500 crore.
2. Certain Exempted Entities
The following entities are currently exempt from e-invoicing:
• Insurance Companies
• Banking Companies
• Financial Institutions
• NBFCs
• Passenger Transport Services
• Goods Transport Agency (GTA)
• Multiplex Cinema Admission Services
• SEZ Units (supplier side)
3. Import Transactions
E-invoicing is not required for import of goods since the invoice is issued by a foreign supplier.
4. Reverse Charge Purchases
When tax is payable under Reverse Charge Mechanism (RCM), the supplier does not generate e-invoice.
Time Limit for Generating E-Invoice
A very important compliance rule relates to the time limit for reporting invoices to IRP.
Currently, the government has imposed a 7-day reporting limit for certain large taxpayers.
| Taxpayer Turnover | Time Limit for IRN Generation |
| Above ₹100 Crore | Within 7 days of invoice date |
| Up to ₹100 Crore | No specific time limit yet |
If an invoice is not reported within the time limit, the IRP will not generate IRN, and the invoice will become invalid.
Consequences of Not Generating E-Invoice
Failure to generate e-invoice when applicable may lead to serious consequences:
1. Invoice treated as invalid
Such invoice is not considered a valid tax invoice under GST.
2. Penalty under GST
Penalty may be imposed under Section 122 of CGST Act.
3. ITC blockage for buyer
The buyer may not be able to claim Input Tax Credit.
4. E-Way Bill generation may fail
Without IRN, the e-way bill system may not accept the invoice.
Step-by-Step Process of Generating E-Invoice
The typical process followed by businesses is:
- Invoice generated in accounting software or ERP
- Invoice data converted into JSON format
- Uploaded to Invoice Registration Portal (IRP)
- IRP validates invoice data
- IRN generated
- QR Code generated
- Signed invoice returned to supplier
After this, the invoice is considered officially registered under GST.
Information Required in E-Invoice
Some key fields required in e-invoice include:
• Supplier GSTIN
• Recipient GSTIN
• Invoice number and date
• HSN code
• Item description
• Taxable value
• GST rate
• Tax amount
Accurate HSN reporting is very important because incorrect HSN may lead to compliance issues.
E-Invoicing is a major digital reform in the GST ecosystem. It improves transparency, reduces fake invoicing, and enables automated return filing.
Businesses whose turnover exceeds ₹5 crore must ensure that all applicable invoices are reported on the Invoice Registration Portal (IRP) within the prescribed time.
Understanding when to generate e-invoice and when it is not required is essential to avoid compliance issues and penalties.
