What is GST e-Invoicing (electronic invoicing) - Complete Overview

Home Blog What is GST e-Invoicing (electronic invoicing) - Complete Overview


Due to regular mismatches and errors in the format of the invoice, the system of e-invoice came into the picture. Earlier, the format for tax invoices was not standardized, but due emergence of “E-invoice" the Registered person under GST gets a format of the invoice that can be used at the time of every supply of goods and services.

So, we can state that the e-Invoice System is for GST-registered persons for uploading all the B2B invoices to the Invoice Registration Portal (IRP). The IRP generates and returns a unique Invoice Reference Number (IRN), digitally signed e-invoice, and QR code to the user.

What is GST E-invoice?

The GST E-Invoice is the self-help system developed by Authorities to make it easier for the Registered person to obtain digitally signed electronic invoices. The Invoice Registration Portal (IRP) issues a specific identification number against every invoice. E-invoice is the system that electronically authenticates the B2B invoices by GSTN.

Why GST Invoicing is beneficial?

  1. GST e-Invoice provides a bridge between data filled in the GST portal and the invoice details.
  2. It reduces the multiple data entry which automatically eliminates the manual error while data entry.
  3. The tracking of the invoices prepared by the supplier is on a real-time basis.
  4. E-invoicing system auto-populates the details and hence provides backward integration. Also, the relevant information in part A of the e-way bills is filled with help of an e-     invoice.
  5. E-invoicing has enabled time reduction and quick availability of Input Tax Credit.

Who needs to get E-Invoice?

Via Notification number 17/2022 by Central Board of Indirect Taxes and Customs dated 1st August 2022, the e-invoicing shall be mandatory for all assessees having a turnover of more than ₹ 10 crores.

Talking about 2020, E-invoicing for business-to-business (B2B) transactions, the threshold was very high, when firms with a turnover of over ₹ 500 crores came under its ambit. 

In the further phase, businesses with a turnover exceeding ₹100 crores were mandated to issue e-invoices from January 1, 2021. 

In the third phase, firms with a turnover of over ₹ 50 crores had to generate e-invoices from April 1, 2021. It was then amended to firms with a turnover of ₹ 20 crores from April 1, 2022.
And now the new threshold limit is ₹ 10 crores applicable from 1st October 2022.

So, every registered taxable person whose aggregate annual turnover exceeds ₹ 10 Cr in any of the financial years since 2017-18 is liable to issue E-invoice by way of uploading its tax invoice in a JSON file on the Invoice Registration Portal (IRP) in accordance with e-invoice schema in INV-01 and getting back digitally signed JSON from IRP with IRN and QR Code.

Who is exempted from e-invoicing?

The following entities are exempt from the mandatory requirement of e-invoicing:

  1. Special Economic zone (not SEZ developers).
  2. Insurer or Banking company or financial institution including NBFC.
  3. Goods Transport Agency (GTA) supplying services in relation to transportation of goods by road in a goods carriage.
  4. Supplier of passenger transport service.
  5. Person supplying services by way of admission to exhibition of cinematograph films in multiplex screen.

How E-invoice is generated and process of E-Invoicing

The taxpayer first generates an invoice using his own ERP/ Accounting system. The invoice must conform to the E-invoice schema (a standard notified format). The details of the invoice are uploaded/reported by the taxpayers to the E-Invoice Registration Portal. In this way, the taxpayer registers their supplies transaction on the IRP. 
On uploading the IRP returns the E-Invoice with a Unique Invoice Reference Number (IRN). After Digitally signing the E-Invoice and adding a QR Code. Then the supplier shares the e-invoice with the receiver.
IRP sends the E-Invoice data along with IRN to GST System as well as to the e-way bill system. The GST system will auto-populate them into GSTR 1 of the supplier and GSTR-2A of respective receivers. With the source marked as “e-invoice”, IRN and IRN date will also be mentioned in GSTR 1 and GSTR 2A. 

Author : aditi

Date     : 02-Aug-2022