What is E-Invoicing?
E-invoicing under GST is a system where B2B invoices are electronically authenticated by the GST Network (GSTN) through the Invoice Registration Portal (IRP). Upon successful verification, the IRP assigns a unique Invoice Reference Number (IRN) and a QR code to each invoice.
Key Benefits of E-Invoicing
- ✓ Auto-population of GSTR-1 returns
- ✓ Auto-generation of e-way bill Part A
- ✓ Eliminates fake invoicing
- ✓ Standardized invoice format
- ✓ Reduces compliance burden
- ✓ Real-time tracking of invoices
- ✓ Improved input tax credit verification
- ✓ Interoperability across GST ecosystem
Who Needs E-Invoicing?
E-invoicing is mandatory based on aggregate annual turnover. The threshold has been progressively reduced:
| Effective Date | Turnover Threshold | Category |
|---|---|---|
| October 1, 2020 | > ₹500 crores | Large enterprises |
| January 1, 2021 | > ₹100 crores | Large enterprises |
| April 1, 2021 | > ₹50 crores | Mid-size enterprises |
| October 1, 2022 | > ₹10 crores | Mid-size enterprises |
| August 1, 2023 | > ₹5 crores | Current threshold |
How is Turnover Calculated?
Aggregate turnover is calculated as per Section 2(6) of CGST Act - value of all taxable supplies (excluding taxes), exempt supplies, exports, and inter-state supplies of all GSTINs under same PAN. Turnover is computed based on previous financial year returns.
Invoice Reference Number (IRN)
IRN is a unique 64-character hash generated by the Invoice Registration Portal using a standard algorithm. It serves as the digital fingerprint of the invoice.
IRN Generation Algorithm
IRN = SHA256 Hash of:
Example: 27AAPFU0939F1ZVINV001202324... (64 characters)
IRN Validity and Cancellation
- • IRN is unique for each invoice and cannot be regenerated
- • E-invoice can be cancelled within 24 hours on IRP
- • After 24 hours, cancellation must be done on GST portal only
- • Once cancelled, same invoice number cannot be used again
- • Amendments to e-invoice are not allowed on IRP
QR Code Requirements
The QR code on e-invoice contains machine-readable summary of invoice details. It must be printed on the invoice shared with the recipient.
8 Mandatory Parameters in QR Code
- 1. GSTIN of supplier
- 2. GSTIN of recipient
- 3. Invoice number (as given by supplier)
- 4. Date of generation of invoice
- 5. Total invoice value
- 6. Number of line items
- 7. HSN code of main item (or HSN of highest value)
- 8. Unique Invoice Reference Number (IRN Hash)
QR Code Scan Benefits:
Scanning the QR code allows tax officers to quickly verify invoice authenticity and view invoice details without accessing the GST portal.
E-Invoice Generation Process
Generate Invoice in ERP/Billing Software
Create invoice in your accounting software with all mandatory fields as per e-invoice schema.
Convert to JSON Format
Invoice data is converted to JSON format as per GST e-invoice schema (version 1.1).
Upload to IRP
JSON is uploaded to Invoice Registration Portal (IRP) via API, GSP, or direct upload.
Validation by IRP
IRP validates GSTIN, duplicate check, schema compliance, and other validations.
Receive IRN, QR Code & Signed JSON
IRP generates IRN, embeds QR code, digitally signs the invoice, and returns to supplier.
Auto-Population to GST Returns
Invoice data auto-populates supplier GSTR-1 and recipient GSTR-2A/2B.