What is E-Invoice Under GST?
E-invoicing (electronic invoicing) under GST doesn't mean you create invoices on a government portal. You still create invoices on your own billing software — the difference is that each invoice gets reported to and validated by the government's Invoice Registration Portal (IRP) before it's considered valid.
Here's how it works in simple terms: you generate an invoice in your system, send it to the IRP in a standard JSON format, the IRP validates it, assigns a unique Invoice Reference Number (IRN) and a QR code, and sends the signed invoice back to you. Without this IRN and QR code, your invoice isn't valid under e-invoicing rules.
The whole process takes seconds — it's API-based and happens in real-time. Most accounting software handles it automatically once configured. The big benefit? Once an e-invoice is generated, it auto-populates your GSTR-1 and can also auto-generate an e-way bill. Three things done with one invoice.
Who Needs to Generate E-Invoices?
E-invoicing is mandatory based on your aggregate turnover in any financial year from 2017-18 onwards:
| Turnover Threshold | Applicable From | |---|---| | Above ₹500 crore | 1st October 2020 | | Above ₹100 crore | 1st January 2021 | | Above ₹50 crore | 1st April 2021 | | Above ₹20 crore | 1st April 2022 | | Above ₹10 crore | 1st October 2022 | | Above ₹5 crore | 1st August 2023 |
Aggregate turnover means total turnover of all GSTINs under the same PAN, across all states. So if you have registrations in 3 states with ₹2 crore each, your aggregate is ₹6 crore — and you cross the ₹5 crore threshold.
Who is Exempt from E-Invoicing?
Even if you cross the turnover threshold, these categories are exempt:
- Banks and financial institutions (including NBFCs)
- Insurance companies
- Goods Transport Agencies (GTAs)
- Passenger transport services
- Cinema ticket exhibitors (multiplex services)
- SEZ units (supplies within SEZ)
- Government departments / local authorities
What Transactions Need E-Invoice?
| Transaction Type | E-Invoice Needed? | |---|---| | B2B supply (to registered person) | Yes | | B2C supply (to unregistered person) | No | | Export invoices | Yes | | SEZ supply invoices | Yes | | Credit notes to registered persons | Yes | | Debit notes to registered persons | Yes | | Bill of supply | No | | Delivery challan | No | | Self-invoices (under RCM) | No |
Understanding the E-Invoice Flow
The process from invoice creation to GSTR-1 auto-population:
- You create an invoice in your billing/ERP software with all required fields
- Software converts it to JSON in the prescribed e-invoice schema (Version 1.1)
- JSON is sent to IRP via API (or manually through the IRP portal)
- IRP validates the JSON — checks GSTIN, HSN codes, values, duplicate invoice numbers
- IRP generates IRN — a unique 64-character hash using supplier GSTIN + financial year + document type + document number
- IRP adds QR code — contains key invoice details for easy verification
- IRP digitally signs the invoice and sends it back
- Data flows to GST portal — auto-populates your GSTR-1 Table 4
- Optionally generates e-way bill — if transport details are included in the JSON
Step-by-Step: Generating E-Invoice
Method 1: Through Your Billing Software (Recommended)
Most popular billing software (Tally Prime, Zoho Books, ClearTax, myBillBook, Busy) have built-in e-invoice integration:
- Generate a regular invoice in your software
- Click "Generate E-Invoice" or it happens automatically
- Software sends JSON to IRP via API
- IRN and QR code are returned and embedded in your invoice
- Print or share the invoice with the buyer
Setup: You need to register on the IRP portal, get API credentials, and enter them in your software. One-time setup, then everything is automated.
Method 2: Through the IRP Portal (Manual)
If you don't have integrated software:
- Go to einvoice1.gst.gov.in → Login with GST credentials
- Click E-Invoice → Create New
- Fill in all invoice fields manually or upload a bulk JSON file
- Click Submit → IRP validates and returns IRN + QR code
- Download the signed invoice JSON or print it
Method 3: Bulk Upload via JSON/Excel
For businesses generating many invoices:
- Prepare invoice data in the prescribed Excel template
- Convert to JSON using the IRP's offline tool
- Upload the JSON file on the IRP portal
- System processes all invoices and returns IRNs
Required Fields in E-Invoice
The e-invoice JSON schema has many fields, but these are the critical ones:
Document Details
- Document type (INV for invoice, CRN for credit note, DBN for debit note)
- Document number (your invoice number — must be unique per GSTIN per FY)
- Document date (format: DD/MM/YYYY)
Supplier and Buyer Details
- Legal name, trade name, GSTIN, address, state code, pin code
- For exports: buyer's name, address, country code
Item Details (for each line item)
- HSN code (minimum 4 digits, 6 recommended)
- Description, quantity, unit
- Unit price, discount, taxable value
- GST rate, IGST/CGST/SGST amounts
- Total item value
Value Details
- Total taxable value
- Total IGST, CGST, SGST, cess
- Round off amount
- Total invoice value (must = taxable + tax + cess - discount + round off)
E-Invoice QR Code — What It Contains
The QR code on a validated e-invoice contains:
- Supplier GSTIN
- Buyer GSTIN
- Invoice number
- Invoice date
- Invoice value
- Number of line items
- HSN code of main item
- Unique IRN
Anyone can scan this QR code using the GST Verify app to check if the invoice is genuine. This is particularly useful for buyers to verify that their supplier actually reported the invoice to IRP.
Auto-Population: GSTR-1 and E-Way Bill
GSTR-1 Auto-Population
Once your e-invoice is successfully generated on IRP:
- B2B invoices auto-populate in GSTR-1 Table 4
- Credit/debit notes auto-populate in GSTR-1 Table 9
- You can view them under "Auto-drafted documents" in GSTR-1
Important: Auto-populated invoices can be edited in GSTR-1 before filing (unlike e-invoices which can't be edited after IRN generation). But changing values in GSTR-1 creates a mismatch with the e-invoice — avoid this.
E-Way Bill Auto-Generation
If you include transport details (vehicle number, transporter ID, mode of transport) in the e-invoice JSON, an e-way bill is automatically generated along with the IRN. One submission, two documents.
Even if you don't include transport details initially, you can generate the e-way bill later from the E-Way Bill portal using the IRN as reference.
Cancellation of E-Invoice
You can cancel an e-invoice within 24 hours of generation:
- Login to IRP portal → E-Invoice → Cancel
- Enter IRN and reason for cancellation
- The IRN is marked as cancelled
- You must also cancel the corresponding entry in GSTR-1 (auto-populated entries from cancelled e-invoices should be removed before filing)
After 24 hours, you can't cancel on IRP. Instead:
- Issue a credit note (which also needs its own e-invoice)
- The credit note negates the original invoice in your GSTR-1
Common E-Invoice Errors and Solutions
Error: Duplicate IRN
Means you're trying to generate an e-invoice for an invoice number that already exists. Check if the invoice was already reported. If you need to correct it, cancel the existing one (within 24 hours) and regenerate.
Error: Invalid GSTIN
The buyer's GSTIN is either wrong or inactive. Verify the GSTIN using a GSTIN Validator before generating the e-invoice.
Error: HSN Code Invalid
The HSN code you entered doesn't exist in the master list, or doesn't have enough digits. Use our HSN Code Finder to get the correct code.
Error: Value Mismatch
The total invoice value doesn't match the sum of individual items + tax. Recalculate and ensure: Total Value = Sum(Taxable Value) + Sum(IGST + CGST + SGST + Cess) ± Round Off.
Error: Document Date in Future
E-invoice date cannot be in the future. Also, from 1st November 2023, you can't generate an e-invoice for a date older than 30 days from the current date.
Penalties for Non-Compliance
If e-invoicing is mandatory for you and you don't comply:
- Invoice treated as invalid — buyer can't claim ITC on an invoice without valid IRN
- Penalty under Section 122 — ₹10,000 or tax on invoice, whichever is higher
- E-way bill can't be generated — if e-invoice is mandatory for you, e-way bill must be generated through e-invoice only (not independently)
- GSTR-1 won't auto-populate — you'll need to enter everything manually plus face scrutiny for not using e-invoicing
Tips for Smooth E-Invoicing
- Get your software integrated — Manual e-invoice generation is painful for more than a few invoices a day. Invest in software with API integration.
- Validate GSTINs before invoicing — Wrong GSTIN means e-invoice rejection. Maintain a verified customer master.
- Use correct HSN codes — The IRP validates HSN codes strictly. Map all your products to correct HSN codes once.
- Generate on the same day — Best practice is to generate e-invoice on the same day as the physical invoice. Don't batch them for end-of-week processing.
- Monitor failures — If your software sends invoices in bulk, check the response for any rejections. Don't assume all went through.
- Cancel within 24 hours — If you need to cancel, do it within the window. After 24 hours, issuing a credit note is more work.
Related SmartGST Tools
- GSTIN Validator — Verify buyer GSTIN before invoicing
- HSN Code Finder — Find correct HSN codes for e-invoice
- Invoice Generator — Create GST-compliant invoices
- GST Calculator — Calculate exact tax amounts
- E-Way Bill Guide — Understand e-way bill linked to e-invoice