The introduction of GST e-Invoicing has been a pivotal, groundbreaking and transformative step by the Indian GST system. Initially introduced on 1 October 2020, for businesses with over ₹500 crores in annual revenue, it brought about a shift in how invoices were being generated – from manual, paper-based invoices, to end-to-end electronically generated e-Invoices. E-Invoicing under GST was aimed to reduce tax evasion, improve tax reporting and data accuracy, and improve efficiency. In present times (1 August 2023 onwards), GST e-Invoicing is applicable to all businesses with ₹5 crores and above in annual revenue.

This guide will enable you to understand the meaning of GST e-Invoicing, its applicability, turnover limit, format, and other important details.

What is e-Invoicing under GST?

What is an e-Invoice? An e-Invoice is a digital invoice document between a supplier and buyer. It is validated by the government tax portal and must be generated on the Invoice Registration Portal (IRP). A unique Invoice Reference Number (IRP) is issued that ensures that every transaction made is compliant with GST rules and recorded in the system. It is used primarily for generating B2B invoices and authenticated using the GST number or GSTIN.

It follows a pre-defined, standard format that facilitates inter-operability and ensures that all e-Invoices are generated in a uniform manner. This simplifies the tax process, making it easier to track transactions, reduce errors, and audit. It also removes the need to update and file GSTR-1 data manually, as all e-Invoices are generated in -real time on the GST Network (GSTN).

Who is eligible for GST e-Invoice? Applicability and turnover limit

E-Invoicing was first launched on 1 October 2020 and its applicability was limited to businesses with over ₹500 crores in annual turnover (i.e., large businesses and industries). This enabled the government and businesses to adopt and adapt to the new way of electronically generating invoices. Over time, the GST e-Invoicing applicability threshold has been extended to include businesses with over ₹5 crores in annual turnover. This not only brought more businesses under the e-Invoicing umbrella but also promoted compliance and supported the objective of digitising India.

GST e-Invoice eligibility criteria and applicability:

• Businesses that have an annual turnover exceeding ₹5 crores (1 August 2023 onwards)
• Applicable for B2B transactions (i.e., B2B e-invoices on all goods and services provided to other businesses)

Note: e-Invoicing is not mandatory for B2C transactions, i.e., B2C e-Invoice, as there as the functionality of claiming credits during returns filing is not applicable here.

GST e-Invoicing applicability exceptions:

• Special Economic Zone units
• Insurers, Banking companies, and Financial institutions
• Movie distributors
• Goods Transport Agency
• Passenger Transport service provider

Note: These businesses are exempted from generating GST e-Invoices and not from paying and collecting GST e.g., GST on transport for goods and passenger transportation

GST applicability and turnover limit timeline:

e-Invoicing under GST was implemented in a manner. This allowed businesses and systems to gradually learn and adopt the new way of generating invoices electronically and also implement any changes required.

Below is the timeline for the implementation of GST e-Invoicing for businesses in India.

Also read: B2B examples – Companies across products, services, and e-Commerce

What is the format of a GST e-Invoice?

All e-invoice bills generated under GSTN follow a uniform format. They contain the same component or fields that makes interoperability feasible.

There are mandatory fields (i.e., those that must be filled in or marked as NIL) and optional fields based on which the system will accept or reject an e-Invoice being generated.

Basic GST e-Invoice format:

There are 30 mandatory fields that must be filled in for an e-invoice to be registered on the IRP. Listed below is an overview of what contents are included in an e-Invoice under GST:

• Document type code, IRN (Invoice Reference Number), Acknowledgement Number and Date and QR Code
• Supplier legal business name, state code, GSTIN/UIN, address, place, pincode
• Document number, document date, Preceding Invoice reference and date
• Buyer (Bill to) details including legal name, GSTIN, address, state code, place of supply code, pincode and place
• Consignee (Ship to) details including business name, GSTIN, state, state code and pincode,
• Invoice number and Date, delivery note, payment mode or terms, reference number and date, any other references
• Buyer’s order number and date, dispatch document number, delivery note date, despatched through, destination
• Terms of delivery
• Description of goods including serial number, description of goods, HSN/SAC, quantity (also total number), item price or rate, discount percentage, total invoice value or amount (also in words)
• GST Tax value (including breakdown of IGST, CGST and SGST/UTGST value), total tax amount (in numbers and words)
• Authorised signatory and business name
• Declaration

Note: This is a simplified list. Please refer to GSTN or any GST e-Invoice tool for the exact field names and specifics.

The line item is limited to 1000 for a single e-Invoice but can be increased upon request.

How to generate GST e-Invoices online?

To generate an e-Invoice you must use an e-Inoicing software or ERP/accounting software that is integrated with the GST e-Invoicing system (GSTN portal) and provides the facility. We list the primary steps required to generate an invoice reference number (IRN) for your e-Invoice.

Pre-requisite:

Your business must be registered on the GST portal to access the GST e-Invoicing system. (Also read: GST registration procedure)

E-invoice software requirements:

If you are using an accounting/billing or any other ERP software, ensure the following:

• It is integrated with the GST Network and is complaint
• It is capable of generating e-Invoices, i.e., it is pre-built with the required e-Invoice format
• It can create a JSON file and integrate with other file formats (e.g., spreadsheets)
• It provides offline and online facility

Steps to generate e-Invoice:

• Use an GST e-Invoicing tool or accounting/ERP software to generate the e-Invoice (this should contain the mandatory details such as GSTIN, buyer details, value of goods, tax amount etc.)
• Upload the e-Invoice on the IRP (Invoice Registration Portal) using your software
• Obtain the IRN (Invoice Reference Number) which will be created automatically once the IRP verifies your invoice bill details
• Print the bill invoice with the IRN and QR Code which is now GST compliant
• Share the e-Invoice with your customer

Why is GST e-Invoicing important?

GST e-Invoicing has transformed how businesses manage and report their transactions. Listed below are some of the key benefits of e-Invoicing under GST:

• Improves compliance ensuring that all necessary data is accurately reported and captured in a standardised format
• Brings efficiency as it simplifies how B2B e-invoices are electronically generated and shared
• Facilitates generation of e-Way bills
• Reduces manual errors and processing time as the entire process is automated
• Increases accuracy in data reporting and recording that brings transparency and facilitates returns filing
• Helps in quicker GST ITC claims and reconciliation process as all e-Invoices are verified in real-time
• Reduces scope of tax evasion by tracking every transaction in real-time

FAQs

Who is eligible for GST e invoice?

From 1 August 2023 onwards, all business with over ₹5 crores in annual turnover can generate B2B e-Invoices for their business. There are however some businesses exempted from GST e-Invoicing (e.g., SEZ units, Goods Transport Agency, etc.).

How do I download a GST e invoice?

You can download the e-Invoice generated visiting the official GST e-Invoice portal. Follow the steps:

• Visit the portal and login using the GST portal credentials
• Go to the Download e-Invoice section (you can find options for Generated and Received e-Invoices)
• Select how you would like to find the e-Invoice (i.e., By IRN, period, or list of IRNs) or additional details as required (i.e., financial year, document type, document number)
• Enter Search
• Download signed e-Invoice either in JSON or PDF format (Excel and bulk e-Invoice options also available)

How do I start an e invoice in GST?

There are two steps you will have to fulfil to start  with e Invoice in GST:

• Ensure you have registered your business on the GST portal and have a valid GSTIN
• Register your business on the GST e-Invoice portal for e-Invoice enablement

You will have to provide your business GSTIN (for authenticity verification) and turnover details to complete the process of registration.

*This article is for information only. For more information please visit the GST portal or the GST e-Invoice portal. You can also consult a CA, tax consultant or GST practitioner for professional advice. 

Author: Sohini Banerjee

Sohini is a seasoned content writer with 12 years’ experience in developing marketing and business content across multiple formats. At Tata nexarc, she leverages her skills in crafting curated content on the Indian MSME sector, steel procurement, and logistics. In her personal time, she enjoys reading fiction and being up-to-date on trends in digital marketing and the Indian business ecosystem.