Who needs to generate e-invoices, how to do it, common errors, and how to stay compliant with GST e-invoicing requirements under the latest thresholds.
E-invoicing (Electronic Invoicing) under GST is a system where B2B invoices are authenticated electronically by the GST Network (GSTN) before being issued to buyers. The system was introduced to reduce tax evasion, improve ITC accuracy, and streamline compliance.
Who Must Generate E-invoices?
As of August 2023, e-invoicing is mandatory for all registered taxpayers with an aggregate annual turnover exceeding ₹5 crore in any financial year from 2017–18 onwards. The government is expected to progressively lower this threshold further.
E-invoicing is NOT applicable to:
- Insurers, Banking companies, and Financial Institutions
- Goods Transport Agencies (GTAs)
- Registered persons supplying passenger transportation services
- SEZ units
- Government departments and local authorities
How the E-invoicing Process Works
- Generate invoice in your accounting software (Tally, Zoho, etc.)
- Upload invoice data to the Invoice Registration Portal (IRP) in JSON format
- IRP validates the data, generates a unique Invoice Reference Number (IRN) and a QR Code
- The authenticated invoice with IRN and QR code is sent back to you
- Share the e-invoice with your buyer — it auto-populates in GSTR-1
Common Errors to Avoid
- Incorrect GSTIN of buyer — always verify before raising invoice
- Wrong HSN/SAC codes — must match the registered commodity
- Missing mandatory fields (place of supply, tax amounts, invoice number format)
- Issuing invoices without IRN if mandatory — liable for penalty of ₹10,000 per invoice
- Cancellation window is only 24 hours after generation — plan amendments carefully
Penalties for Non-Compliance
Failure to generate e-invoices when mandatory attracts a penalty of ₹10,000 per invoice under Section 122 of the CGST Act. Additionally, the buyer cannot claim ITC on invoices that don't have a valid IRN.
Need help setting up e-invoicing for your business? Contact Vadulekar & Associates at +91 98906 60719 or vaacansk@gmail.com.