Complete Guide to GST E-invoice: Key Highlights, Benefits, Compliance, and Generation Process

Electronic invoicing, also known as e-invoicing, has become an increasingly popular method for businesses to create and manage their invoices. In India, the government has introduced the GST e-invoice mandate under the GST regime to simplify the invoicing process for businesses. Read to know what e-invoicing is, how it works and what benefits it offers to businesses.

What is GST e-invoice?

GST e-invoice is an electronic document that is created and transmitted in a standardised format for invoicing under GST. The e-invoice system is a part of the government's digital India initiative and is designed to streamline and simplify the invoicing process for businesses.

54th GST Council Meeting Key Highlights on GST invoicing

E-Invoicing for B2C Transactions

• Update: Gradual implementation of e-invoicing for Business-to-Consumer (B2C) transactions.
• Goal: Increase transparency and reduce tax evasion.
• Anticipated Benefit: Enhanced GST compliance and higher government revenue through reduced false invoicing and unreported sales.

GST Rate for Online Gaming

• Status: GST rate of 28% on online gaming, casinos, and racecourses remains unchanged.
• Objective: Ensure equitable tax contribution from the gaming sector.
• Industry Impact: Potential concerns about the effect on industry growth but aims to standardize tax obligations.

Formation of New Groups of Ministers (GoMs)

• New Groups:
  • GoM on Medical and Health Insurance Rates: To evaluate and suggest adjustments to GST on medical insurance premiums.
  • GoM on Compensation Cess: To review and recommend strategies for managing revenue shortfalls due to compensation cess.
• Purpose: Provide recommendations for tax rate adjustments and ensure adequate compensation for states.

Tax Relief for Foreign Airlines

• Change: Rationalization of Integrated GST (IGST) on aircraft imports.
• Objective: Reduce financial burden on foreign airlines.
• Expected Outcome: Stimulate investment and competition in the aviation sector, improving air travel services in India.

Components of an E-invoice

Here is a list of the 30 mandatory fields of an e-invoice. Earlier, 50 fields were to be mandatorily filled by the taxpayer.

Field name	Description
Document type code	Specifies the unique code assigned to each type of document.
Supplier legal name	The supplier's name as per their PAN card records
Supplier GSTIN	The supplier’s GST Identification Number.
Supplier address	Complete address of the supplier, including flat and building numbers.
Supplier place	Specifies the supplier's city, town, or village
Supplier state code	Indicates the supplier's state through a designated code
Supplier pincode	The six-digit postal code of the supplier's location
Document number	A unique and sequential invoice number for business purposes.
Preceding invoice reference and date	Refers to the original invoice details being amended using a document such as a credit note
Document date	The date the invoice was issued.
Recipient legal name	The buyer’s name as per their PAN card records.
Recipient’s GSTIN	Specifies the GST Identification Number of the buyer
Recipient’s address	Detailed address of the buyer.
Recipient’s state code	The recipient's state code, used to determine the place of supply.
Place of supply state code	The recipient’s state as identified by the state code
Pincode	Specifies the recipient’s six-digit postal code
Recipient place	Indicates the recipient's city, town, or village
Invoice reference number or IRN	A unique number generated by GSTIN upon e-invoice upload on the GSTN portal
Shipping To GSTIN	The GST Identification Number of the person receiving the shipment.
Shipping To state, pincode and code	Indicates the state, postal code, and state code for the delivery of goods or services
Dispatch from name, address, place	Details of the dispatching entity, including its name, address, and location.
Is service	Specifies whether the transaction involves the supply of services.
Supply type code	Indicates the type of supply (e.g., B2B, SEZ supply) with its corresponding code.
Item description	A detailed description of the goods or services listed in the invoice.
HSN code	The Harmonised System of Nomenclature (HSN) code for the goods or services.
Item price	The unit price of the item, exclusive of GST and after applying any discounts. Must be a positive value.
Assessable value	The value of the item excluding GST and after deducting applicable discounts.
GST rate	The applicable GST rate for the item or service
IGST value, CGST value, SGST value	Individual values for Integrated GST, Central GST, and State GST applicable to each item
Total invoice value	The total value of the invoice, inclusive of GST

How does the GST e-invoice system work?

Step 1 – Generating the e-invoice

Taxpayers should generate invoices as usual during business operations. However, electronic reporting of these invoices must follow specific criteria and comply with the e-invoice schema, including all mandatory fields. Below are the required fields for invoices related to the supply of goods:

• Invoice type
• Invoice type code
• Invoice number and date
• Supplier details: Name, GSTIN, address (including place, pin code, and state)
• Buyer details: Name, GSTIN, state code, address, place, pin code, payee name, account number, payment mode, and IFSC code
• Dispatch information
• Details of items: Description of goods, quantity, rate, assessable value, GST rate, applicable CGST/SGST/IGST, and total invoice value
• Payment details: Total tax amount, payment received, and payment due
• Tax scheme: GST, Excise, VAT, or others
• Shipping details: Name, GSTIN, address, pin code, state, supply type, and transaction mode

The seller must ensure that their accounting or billing software can generate a JSON file of the final invoice. JSON files adhering to the e-invoice schema can be created using these methods:

• Accounting or billing software that supports JSON generation
• Integration utilities for accounting systems, ERP, Excel/Word documents, or mobile apps
• Offline tools for manual data entry to generate e-invoices

Step 2 – Generating a unique IRN

The supplier generates a unique hash using parameters such as the Supplier’s GSTIN, invoice number, and financial year (YYYY-YY). This hash, created with the SHA256 algorithm, is validated to serve as the Invoice Reference Number (IRN) for the e-invoice.

Step 3 – Uploading the JSON file

The JSON file of the final invoice can be uploaded to the Invoice Registration Portal (IRP) using the following options:

• Direct upload on the IRP
• Through GST Suvidha Providers (GSPs)
• Third-party apps or API integration
• Uploading the hash along with the JSON, if pre-generated by the supplier

Step 4 – Hash generation and validation

If the uploaded invoice does not include a hash, the IRP generates one, which becomes the IRN. When a supplier submits the hash, a de-duplication check ensures its uniqueness against the GST System’s Central Registry. Once validated, the IRP:

• Stores the IRN in the Central Registry
• Generates a QR code
• Digitally signs the invoice
• Shares the e-invoice via email with both the buyer and seller, as provided on the invoice

Navigating the digital shift

The Goods and Services Tax (GST) regime, introduced to streamline and unify the taxation structure in India, brought about the need for a standardised and automated invoicing system. The GST electronic invoice system was created as a solution to simplify the cumbersome process of manual invoicing, reduce errors, and enhance overall compliance.

Under this system, businesses generate invoices electronically in a format that adheres to the prescribed standards. The GST network (GSTN) authenticates these e-invoices, ensuring accuracy and compliance with GST regulations.

Process of getting an e invoice system

The process of implementing an e-invoice system involves several key stages:

1. Ensure compliance with PEPPOL standards and incorporate e-invoicing schema into your ERP system.
2. Whitelist the IP address of your computer system on the e-invoice portal for direct API integration or use a GST Suvidha Provider (GSP).
3. Utilize a bulk generation tool to upload invoices in bulk and generate JSON files for IRN generation.
4. Enter all necessary invoice details such as billing information, GSTN, transaction value, item rate, GST rate, and tax amount into your ERP or billing software.
5. Upload invoice details to the Invoice Registration Portal (IRP) using the generated JSON file, app, or direct API.
6. IRP will validate the invoice details, check for duplications, and generate an Invoice Reference Number (IRN) along with a digitally signed invoice and QR code.
7. Receive intimation of e-invoice generation via email and continue printing invoices with a logo as usual.
8. IRP forwards authenticated data to the GST portal for tax returns and, if applicable, to the e-way bill portal for generation of e-way bills.
9. GSTR-1 returns are auto-filled for the relevant tax period based on the data provided, determining tax liability accordingly.

Implementing an e-invoice system streamlines invoicing processes, enhances compliance, and facilitates seamless integration with tax and regulatory systems. With e-invoicing solution, ensure efficient and hassle-free compliance with e-invoicing requirements.

Benefits of e-Invoice system

Here are some of the benefits of e-invoicing:

1. Reduced errors: With e-invoicing, the chances of errors in invoicing are minimised, resulting in greater accuracy, and fewer disputes with clients.
2. Cost savings: e-Invoicing reduces the cost of paper, printing, and postage, thus saving businesses money on logistics and bulk printing.
3. Faster payment processing: Electronic invoicing is faster and more efficient, allowing businesses to receive payment faster, improve cash flow and reduce late payments.
4. Reduced compliance risks: The e-invoicing system ensures that businesses comply with GST regulations by automatically updating invoices with the tax amount and providing real-time validation of invoice details.
5. Saves time: e-Invoicing saves time, eliminates manual processing, and automates many processes such as invoice generation, data entry, and payment processing, making it easier for businesses to manage their finances.

Compliance Requirements

E-invoicing is mandatory for GST-registered businesses with an annual turnover exceeding ₹5 crore in any financial year since 2017-18. This regulation came into effect on August 1, 2023, under Notification No. 10/2023 – Indian Taxation System, aiming to enhance compliance and promote the digitalisation of business transactions.

Key highlights include:

• Threshold limit: Entities with an annual gross turnover exceeding ₹5 crore must generate e-invoices for all B2B transactions
• Previous threshold: Before August 2023, the threshold was set at ₹10 cror
• Applicability:
  1. E-invoicing applies to all GST-registered businesses whose turnover exceeded ₹5 crore in any financial year from 2017-18 to date
  2. Aggregate turnover is calculated as the total revenue across all GSTINs under a single PAN in India
• Exemptions:
  1. Small taxpayers below the ₹5 crore threshold
  2. Certain sectors or services are specifically exempted by the government

How can e-invoicing curb tax evasion?

E-invoicing plays a crucial role in curbing tax evasion through several mechanisms:

1. Real-time Transaction Monitoring: Tax authorities gain immediate access to transactions as they occur, promoting transparency and accountability.
2. Reduced Manipulation: With invoices generated prior to transactions, there's limited scope for manipulation, enhancing the integrity of tax records.
3. Prevention of Fake Invoices: Mandatory e-invoicing minimizes the prevalence of fraudulent GST invoices, ensuring only genuine input tax credits can be claimed.
4. Enhanced Tracking: Matching input credit with output tax details enables efficient identification and tracking of fake tax credit claims, bolstering tax compliance and enforcement measures.

What are the mandatory fields of an e-invoice?

Here's a table outlining the mandatory fields of an e-invoice:

Field Name	Description
Document Type Code	Specifies the type of document being issued.
Supplier Legal Name	Legal name of the supplier as per PAN card details.
Supplier GSTIN	GST identification number of the supplier.
Supplier Address	Complete address of the supplier including flat number and building details.
Supplier Place	City/ village/ town of the supplier.
Supplier State Code	State code of the supplier.
Supplier Pincode	Six-digit pin code of the supplier's address.
Document Number	Unique sequential invoice number for easy identification.
Preceding Invoice Reference	Reference details for editing previous invoices.
Document Date	Date of issuance of the invoice.
Recipient Legal Name	Legal name of the buyer as per PAN card details.
Recipient's GSTIN	GST identification number of the buyer.
Recipient's Address	Detailed address of the buyer.
Recipient's State Code	State code of the recipient.
Place of Supply State Code	State code of the place of supply.
Pincode	Six-digit pin code of the recipient's location.
Recipient Place	Village/ town/ city of the recipient.
Invoice Reference Number (IRN)	Unique number generated by GSTIN after e-invoice upload on the portal.
Shipping To GSTIN	GSTIN of the recipient of the goods.
Shipping To State, Pincode	State and pin code of the recipient's location for shipping.
Dispatch From Name, Address	Name and address of the dispatching entity.
Is Service	Specification of service supply.
Supply Type Code	Code indicating the type of supply (e.g., B2B, SEZ).
Item Description	Description of the item being supplied.
HSN Code	Harmonized System of Nomenclature code for the item.
Item Price	Unit price of the item excluding GST.
Assessable Value	Item price excluding GST after discount.
GST Rate	Rate of GST applicable to the item.
IGST Value	Integrated GST value for the item.
CGST Value	Central GST value for the item.
SGST Value	State GST value for the item.
Total Invoice Value	Total value of the invoice including GST.

Each of these fields is crucial for creating an accurate and compliant e-invoice.

What is the workflow of e-invoice?

The workflow of e-invoice involves several steps:

Step 1: Invoice Generation:
Generate invoices as usual, ensuring they adhere to e-invoice schema with mandatory fields like invoice type, number, date, supplier and buyer details, dispatch details, and tax information. Use accounting software or offline tools for JSON generation.

Step 2: IRN Generation:
Generate a hash based on specific parameters like GSTIN, invoice number, and financial year to create the Invoice Reference Number (IRN) using prescribed algorithms.

Step 3: JSON Upload:
Upload the JSON of the final invoice directly on the Invoice Registration Portal (IRP) or through GST Suvidha Provider (GSP) or third-party apps.

Step 4: Hash Validation:
If the hash is uploaded, validate it against the Central Registry of the GST System to ensure uniqueness. IRP generates a QR code and digitally signs the invoice, making it available to the supplier and buyer via email.

How to generate e-invoice in the GST portal?

To generate e-invoices on the official GST portal, follow these steps:

1. Visit the e-invoice portal and click on the Registration button.
2. Choose e-Invoice Enablement and enter your company's GSTIN.
3. Complete OTP verification and provide annual turnover details for the relevant financial year.
4. Submit the information to register for e-invoicing.
5. Log in to the e-invoice portal and upload B2B invoices using your preferred mode to generate the Invoice Reference Number (IRN).

Who must generate e-invoice and its applicability?

E-invoicing is mandatory for businesses with a specified turnover limit set by the tax authorities. The applicability of e-invoicing varies by country, with thresholds and requirements subject to change. Typically, businesses meeting or exceeding the turnover threshold must generate e-invoices for transactions. Here's a simplified table illustrating e-invoicing applicability:

Phase	Applicable to taxpayers having an aggregate turnover of more than	Applicable date	Notification number
I	Rs 500 crore	01.10.2020	61/2020 – Central Tax and 70/2020 – Central Tax
II	Rs 100 crore	01.01.2021	88/2020 – Central Tax
III	Rs 50 crore	01.04.2021	5/2021 – Central Tax
IV	Rs 20 crore	01.04.2022	1/2022 – Central Tax
V	Rs 10 crore	01.10.2022	17/2022 – Central Tax
VI	Rs 5 crore	01.08.2023	10/2023 - Central Tax

E-invoicing aims to enhance tax compliance, reduce errors, and improve efficiency in business transactions.

Who need not comply with e-Invoicing?

In India, certain entities are exempt from complying with e-Invoicing requirements. These include businesses whose aggregate turnover does not exceed the prescribed threshold, which was initially set at Rs. 100 crore (later raised to Rs. 500 crore). Additionally, certain sectors and types of transactions may be exempted by the government based on specific criteria or notifications. Small businesses, exporters, and those dealing exclusively in exempted or nil-rated supplies under GST may also fall outside the mandatory e-Invoicing mandate. These exemptions aim to reduce compliance burdens on smaller entities and sectors with less significant economic impact.

What are the modes of generating e-Invoice?

The modes of generating e-Invoices offer flexibility to taxpayers based on their preferences and requirements. Various options are available, including Web-Based, API Based, SMS Based, Mobile App, offline tool-based, and GSP based methods. Taxpayers can choose the most suitable mode for their business operations, ensuring seamless compliance with e-Invoicing regulations. Whether accessing through web platforms, utilizing APIs for integration, leveraging mobile apps for convenience, or utilizing offline tools, taxpayers have a range of options to streamline their e-Invoice generation process.

Systems before and after e-invoicing

Before the implementation of e-invoicing systems, businesses relied on manual or paper-based invoicing processes, which were often time-consuming, error-prone, and labor-intensive. This traditional approach involved printing, mailing, and manually processing invoices, leading to delays, inefficiencies, and increased risk of errors. With the introduction of e-invoicing systems, businesses transitioned to electronic invoicing methods, streamlining the invoicing process, reducing paperwork, and automating invoice generation, delivery, and payment. E-invoicing systems integrate with accounting software, enabling real-time tracking, faster payment processing, and improved accuracy, ultimately enhancing efficiency and reducing costs for businesses.

Time limit to generate e-invoice

The time limit to generate an e-invoice typically varies depending on the regulations set forth by tax authorities or governing bodies. In many jurisdictions, businesses are required to generate e-invoices at the time of supply or within a specified timeframe after the transaction occurs. This timeframe may range from immediate generation upon supply to within 24 hours or a few days after the transaction. Adhering to these time limits ensures timely reporting of transactions, enhances tax compliance, and facilitates seamless integration with accounting and tax systems for accurate record-keeping and reporting purposes.

How to register for an e-invoicing system?

Registering for an e-invoicing system typically involves several steps, depending on the requirements set by the tax authorities or governing bodies. Businesses may need to visit the designated e-invoicing portal and complete an online registration process by providing relevant details such as company information, tax payer identification number, contact details, and any other required documentation. Once the registration is submitted, businesses may undergo verification processes to validate their identity and eligibility for e-invoicing. Upon successful registration, businesses receive access credentials or digital certificates to enable them to start generating and transmitting e-invoices electronically in compliance with regulatory requirements.

Learn more about e-invoices in GST

e-invoice limit

How to Cancel an E-Invoice

How to Generate e Invoice

Invoice Reference Number

Invoice financing