How to Generate e Invoice: Step-by-Step Process

Know what an E-invoice is, its benefits under GST, and how to generate one. Get clear insights on e-invoicing and how it can streamline your business processes.
Business Loan
APPLY NOW
3 min
28 September 2024

What is an e-invoice?

An e-invoice is a digital document that replaces traditional paper invoices, enabling businesses to generate, store, and share invoices electronically. In the context of GST in India, e-invoicing GST refers to the process where B2B invoices are electronically authenticated by the GST Network (GSTN) for use on the common GST portal. The e-invoice system standardises the format of invoices, ensuring interoperability across different accounting software. Once an invoice is generated, it is assigned a unique Invoice Reference Number (IRN) by the GSTN after verification, and a QR code is generated for the invoice, which contains essential details like GSTIN, invoice number, date, and the total value. This ensures that the invoice is valid for tax purposes and simplifies the filing of returns under the GST regime. The implementation of e-invoicing GST has streamlined the invoicing process, reduced errors, and improved compliance, making it easier for businesses to manage their tax liabilities efficiently.

Steps to generate an e-invoice:

  • Create the invoice in your accounting software: Begin by generating the invoice using your preferred accounting or ERP software, ensuring it complies with the e-invoicing standards.
  • Upload to the Invoice Registration Portal (IRP): Upload the generated invoice to the IRP, where the system verifies its authenticity and assigns a unique Invoice Reference Number (IRN).
  • IRN and QR code generation: Once the IRP validates the invoice, it generates an IRN and a QR code, which are essential for the e-invoice to be considered valid under GST.
  • Receive a digitally signed e-invoice: After processing, the IRP returns the e-invoice with the digitally signed IRN and QR code, confirming its authenticity.
  • Share with the buyer and the GST portal: Finally, share the e-invoice with the buyer and automatically update it on the GST portal for seamless GST return filing.

What are the benefits of GST E-invoicing?

  • Standardisation: E-invoicing ensures a uniform invoicing format, making it easier for businesses to maintain consistency and comply with GST regulations.
  • Reduction in errors: By automating the invoicing process, e-invoicing reduces manual entry errors, ensuring accurate tax calculations and compliance.
  • Real-time tracking: Businesses can track invoices in real time through the GST system, providing better visibility into transactions and reducing the risk of fraud.
  • Simplified compliance: E-invoicing automates the integration of invoice data with GST returns, making the filing process more straightforward and reducing the chances of discrepancies.
  • Enhanced business efficiency: The automation and standardisation of e-invoicing lead to faster processing times, reduced paperwork, and overall improved operational efficiency.
  • Improved cash flow: With quicker invoice processing and validation, businesses can ensure timely payments and better manage their cash flow.

Back-end processing of a valid e-invoice

Once an e-invoice is generated and validated by the Invoice Registration Portal (IRP), it undergoes several back-end processes to ensure seamless integration with other GST-related activities. The validated e-invoice data is automatically transmitted to the GST portal, where it populates the relevant sections of GSTR 1, facilitating easier filing of returns. This automation reduces manual entry errors and ensures that the sales details are accurately reflected in the returns.

Additionally, the information from the e-invoice is also reflected in the buyer’s GSTR 2B, enabling them to claim Input Tax Credit (ITC) seamlessly. Moreover, the e-invoice data is integrated with the eway bill system, allowing for the auto-generation of eway bills without requiring duplicate data entry. This integration streamlines the logistics and compliance process, ensuring that goods are transported legally and efficiently. These back-end processes contribute to the overall efficiency of the GST system, reducing the administrative burden on businesses and enhancing the accuracy of tax filings.

Conclusion

E-invoicing under GST has transformed the way businesses handle invoicing, ensuring greater accuracy, compliance, and efficiency. By streamlining the invoicing process and integrating it with GST returns and eway bills, businesses can focus on their core operations while maintaining robust financial management. For businesses seeking to leverage these advantages, understanding the nuances of e-invoicing is crucial. Moreover, for companies considering expansion or facing financial challenges, securing a business loan from Bajaj Finance can provide the necessary capital to adapt to these new regulatory requirements and enhance operational efficiency.

Frequently asked questions

Can we generate e-invoice on the portal?
No, e-invoices cannot be directly generated on the GST portal. Businesses must generate e-invoices using their own accounting or ERP software, which should be integrated with the GST system. Once the invoice is created, it is uploaded to the Invoice Registration Portal (IRP), where it is authenticated, assigned an Invoice Reference Number (IRN), and returned with a digitally signed QR code. This process ensures that the e-invoice is valid for GST purposes.

What is the time limit for generating IRN?
The time limit for generating an Invoice Reference Number (IRN) under GST is typically the same day the invoice is issued. However, the IRN must be generated before the goods are dispatched or services are rendered. The GST law mandates that the IRN should be generated within 24 hours of the invoice being created to ensure compliance. Delays in generating the IRN may lead to non-compliance, potentially resulting in penalties.

Who is eligible for an e-invoice in GST?
In India, e-invoicing under GST is mandatory for businesses with an aggregate turnover exceeding ₹10 crore in any financial year since 2017-18. This requirement applies to B2B transactions, exports, and certain categories of sales to government entities. However, sectors such as insurance, banking, financial institutions, goods transport agencies (GTA), and passenger transportation services are exempt. Compliance with e-invoicing ensures seamless integration with the GST system, improving accuracy and simplifying tax reporting for eligible businesses.

Can the e-invoice be cancelled?
Yes, an e-invoice can be cancelled, but it must be done within 24 hours of its generation. The cancellation is only allowed if the invoice is not yet used in any GST returns or eway bills. Once an e-invoice is cancelled, the details cannot be modified or used again. The cancellation process must be done through the Invoice Registration Portal (IRP), and once cancelled, the Invoice Reference Number (IRN) becomes invalid.

Show More Show Less

Bajaj Finserv App for All Your Financial Needs and Goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Explore and apply for co-branded credit cards online.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements, and even get quick customer support—all on the app.
Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Related videos