E-invoicing under GST: who needs it, and how it works

E-invoicing sounds like a new way of making invoices. It isn’t. You still create invoices in your own software, in your own format. What changed is that, above a turnover threshold, each B2B invoice has to be reported to a government portal before it counts — and an invoice that skipped that step isn’t a valid invoice at all, however correct it looks.

What e-invoicing actually is

When you raise a B2B invoice, your software sends its details to an invoice registration portal (IRP). The IRP checks it, generates a unique invoice reference number (IRN), signs the data digitally, and sends it back with a QR code. You print the QR code on the invoice and send it to your customer as usual.

Behind the scenes, the same data flows into your GSTR-1, so the invoice is reported once rather than typed twice, and it can pre-fill the e-way bill for goods. Several government-authorised IRPs exist; your accounting software or GST provider will typically connect to one of them for you.

Who has to do it

E-invoicing applies to you if your aggregate turnover exceeded ₹5 crore in any financial year since 2017-18. Two details catch businesses out:

• It is aggregate turnover — across every GSTIN on the same PAN — not the turnover of one registration.
• It never switches off. One year above ₹5 crore brings it in permanently, even if turnover falls afterwards.

Some sectors are exempt regardless of size: SEZ units, insurers, banks and other financial institutions including NBFCs, goods transport agencies, passenger transport services, cinema admissions, and government departments and local authorities. Our GST applicability checker shows whether e-invoicing, and the other turnover-based rules, apply to you.

Which documents are covered

Document	E-invoice?
Tax invoices to registered businesses (B2B)	Yes
Credit notes and debit notes on B2B supplies	Yes
Export invoices, and supplies to SEZ units or developers	Yes
Invoices to consumers (B2C)	No
Delivery challans, bills of supply for exempt goods	No

How an invoice gets its IRN

1. Create the invoice in Tally, Zoho Books or your ERP, with complete master data: customer GSTIN, place of supply, HSN codes, PIN codes.
2. Report it. The software sends the invoice to the IRP, directly through an integration or by uploading a file.
3. The IRP validates it — the GSTIN is active, the invoice number isn’t a duplicate, the arithmetic and codes are consistent — and rejects it if not.
4. You receive the IRN and signed QR code, and the invoice becomes valid to issue.
5. The data reaches GSTR-1 and, for goods, can generate the e-way bill.

Most rejections come from master data, not from the invoice itself: an inactive or mistyped customer GSTIN, a missing PIN code, an HSN code with too few digits. Our GSTIN validator catches a malformed number before it reaches the portal.

Time limits: 24 hours and 30 days

• Cancellation: 24 hours. An IRN can be cancelled on the portal, in full only, within 24 hours of generation. After that, you correct it with a credit note — which is itself e-invoiced — not by cancelling.
• Reporting: 30 days, above ₹10 crore. Since 1 April 2025, businesses with aggregate turnover of ₹10 crore or more must report invoices, credit notes and debit notes within 30 days of the document date. After that the portal refuses to generate the IRN.

The 30-day limit is where month-end habits cause trouble. A batch of invoices raised in the system but never reported, discovered at the next reconciliation, can be past the window before anyone notices.

The mistakes that cost credit

• Issuing without an IRN. The invoice isn’t valid; your customer can’t claim the input tax credit and will come back to you, usually with payment on hold.
• Invoices reported in the books but not on the portal, or the reverse, which surface later as GSTR-1 mismatches.
• Cancelling in the books after 24 hours while the IRN stays live on the portal. The invoice still exists as far as GST is concerned.
• Crossing ₹5 crore without noticing, and carrying on with ordinary invoices into the new financial year.

Keeping it clean each month

E-invoicing adds one line to the month-end routine: every B2B invoice, credit note and debit note in the sales register should have an IRN, and every IRN on the portal should be in the sales register. It is the fourth of the five monthly GST reconciliations, and it takes minutes if it is done every month and days if it isn’t.

If you are approaching ₹5 crore, the time to set up e-invoicing is before the financial year in which it applies, not the week the first rejection arrives. Our GST and TDS compliance service handles the reconciliation every month.