E-Invoicing under GST — Complete Compliance Guide for FY 2025-26

1. What is E-Invoicing under GST?

E-invoicing — or electronic invoicing — under GST does not mean creating a PDF invoice and emailing it. Many business owners make this mistake. In the GST context, e-invoicing refers to a specific government-mandated process where every B2B invoice is reported in real time to a designated government portal called the Invoice Registration Portal (IRP), which then returns a unique Invoice Reference Number (IRN) and a digitally signed QR code.

Without this IRN, the invoice is legally invalid — your buyer cannot claim ITC on it, and you are liable for penalties. The IRP authenticates and timestamps every invoice, creating a seamless, auditable digital paper trail.

This system was introduced by CBIC through Notification No. 70/2019 – Central Tax, dated 13.12.2019, and has since been extended in phases to cover progressively smaller businesses. The legal basis sits in Rule 48(4) of the CGST Rules, 2017, which makes it mandatory for notified taxpayers to prepare e-invoices exclusively through the IRP.

2. Who Must Generate E-Invoices? (Applicability & Turnover Limit)

CBIC has reduced the threshold in multiple phases. Here is the complete rollout history and current applicability as of FY 2025-26:

For FY 2025-26, the rule is: if your aggregate annual turnover (across all GSTINs, all states) exceeded ₹5 crore in any previous financial year from FY 2017-18 onwards, you are required to generate e-invoices for the transaction types listed below.

Which Transactions Require E-Invoicing?

• B2B invoices — supply of goods or services to a registered person
• Exports (with or without payment of IGST)
• Supplies to SEZ units or SEZ developers (with or without payment of IGST)
• Credit Notes and Debit Notes issued against e-invoices
• Deemed exports (supply to EOU, STPI units, etc.)

3. Who is Exempt from E-Invoicing?

Even if a taxpayer exceeds the ₹5 crore threshold, certain categories of registered persons are entirely exempt from the e-invoicing mandate as per CBIC Notification No. 13/2020 – Central Tax (as amended):

• Insurance companies, banking companies, and financial institutions (including NBFCs)
• Goods Transport Agencies (GTAs) supplying services for transportation of goods by road
• Passenger transport service providers (airlines, bus operators, etc.)
• Multiplexes (cinema halls) issuing admission tickets
• SEZ units (note: SEZ developers are NOT exempt — only units)
• Government departments and local authorities

Additionally, certain transaction types are exempt even if the taxpayer is covered:

• B2C invoices (sales to end consumers / unregistered buyers)
• Nil-rated, exempted, and non-GST supplies
• Invoices under the Bill of Supply (composition dealers, exempt goods)
• Delivery challans
• Free samples / gifts (where no consideration is charged)

4. IRP Portal and IRN — What They Mean

What is the IRP (Invoice Registration Portal)?

The Invoice Registration Portal is a government-designated digital gateway maintained by NIC (National Informatics Centre) and certain CBIC-authorised private operators. When you upload your invoice data in the prescribed JSON format, the IRP validates it, assigns a unique IRN, generates a digitally signed QR code, and sends the data to the GST system (for auto-population of GSTR-1) and to the e-way bill system (if applicable).

CBIC has approved multiple IRP operators:

• NIC IRP — einvoice1.gst.gov.in (Free, government portal)
• Clear (formerly ClearTax) — einvoice.cleartax.in (Private IRP)
• Tally Solutions — via TallyPrime integration
• Infosys, MasterGST, and others (CBIC-approved)

All IRPs are interoperable — the IRN generated is unique and valid regardless of which portal you use.

What is an IRN?

The Invoice Reference Number (IRN) is a 64-character alphanumeric hash generated by the IRP using the following parameters: your GSTIN + financial year + document type + document number. It is unique for every invoice. No two invoices — even from different taxpayers — can have the same IRN. The IRN, along with the embedded QR code, must be printed on every e-invoice you issue.

5. Step-by-Step: How to Generate an E-Invoice

• Prepare Invoice Data in Your Accounting Software

  Generate the invoice as usual in your software (Tally, Zoho Books, Busy, etc.). Most modern GST-compliant software supports direct IRP integration. Ensure all mandatory fields are filled — GSTIN of supplier and buyer, HSN/SAC codes, invoice value, GST amounts, place of supply.

• Generate JSON in the CBIC-Prescribed Format

  Your software will export the invoice data in the e-invoice JSON schema (version 1.1 as of FY 2025-26). This schema is defined by CBIC and available at einvoice1.gst.gov.in. If you don’t use integrated software, you can manually upload the JSON on the NIC IRP portal.

• Upload JSON to IRP via API or Portal

  Submit the JSON to your chosen IRP — either directly through the web portal or via API integration built into your accounting software. The IRP performs real-time validation: GSTIN existence, PAN match, duplicate check, and schema validation.

• IRP Returns IRN + Signed JSON + QR Code

  Upon successful validation, the IRP returns a signed JSON file containing the IRN (64-character hash), a digitally signed QR code, and the SignedInvoice payload. This entire response is stored by the IRP for 24 hours (after which it is not accessible from IRP — you must store it yourself).

• Print IRN and QR Code on Invoice

  Embed the IRN and QR code on the final invoice PDF/printout handed to your buyer. The QR code must be machine-readable and contain supplier GSTIN, buyer GSTIN, invoice number, date, value, number of line items, HSN of main item, and the IRN itself.

• Invoice Flows Automatically to GSTR-1

  The IRP pushes validated invoice data to the GST portal in real time. This auto-populates your GSTR-1 (Table 4A/4B/6A/7). No need for separate manual entry — this is one of the biggest compliance benefits of e-invoicing.

6. Mandatory Fields in an E-Invoice

The CBIC e-invoice schema has over 100 data fields, but only a subset are mandatory. Missing even one mandatory field will cause the IRP to reject the JSON upload with an error code. Here are the critical ones:

7. Cancellation of E-Invoice — Rules & Time Limit

Once an IRN is generated, it cannot be edited or amended on the IRP. The only option is cancellation. Here are the rules:

• Time Limit: An e-invoice can be cancelled on the IRP only within 24 hours of IRN generation.
• Partial Cancellation: Not allowed — you must cancel the entire invoice.
• After 24 Hours: Cancellation is not possible on the IRP. You must issue a Credit Note referencing the original IRN to reverse the transaction.
• E-Way Bill Link: If an e-way bill has been generated against the IRN, you must first cancel the e-way bill before cancelling the e-invoice.
• GSTR-1 Impact: A cancelled IRN will appear in GSTR-1 as a cancelled document. Ensure your GSTR-1 reflects the cancellation before filing.

8. How E-Invoicing Impacts GSTR-1 and GSTR-3B

GSTR-1 Auto-Population

When you generate an IRN, the IRP pushes the invoice data directly to the GST portal. This auto-populates GSTR-1 (Table 4A for B2B, Table 6A for exports) in real time. You do NOT need to manually re-enter invoice details in GSTR-1 — this significantly reduces errors and saves time, especially for businesses with high invoice volumes.

However, you should always review auto-populated data in GSTR-1 before filing. Occasionally, data mismatches or IRP validation differences can cause issues. Login to the GST portal (gst.gov.in), go to Returns → GSTR-1 → Auto-populated section to verify.

Impact on Buyer’s GSTR-2B and ITC

For your buyers, e-invoiced supplies show up automatically in their GSTR-2B as eligible ITC. Buyers of e-invoiced goods and services can claim ITC with much higher confidence, as the IRP validation chain ensures supplier compliance. This is a major driver for B2B buyers preferring vendors who issue proper e-invoices — any supplier not complying with e-invoicing may face pressure from their buyers, who risk losing ITC.

E-Way Bill Integration

For consignments where an e-way bill is required (typically goods valued above ₹50,000 moving more than 50 km), the IRP also generates the e-way bill simultaneously using the invoice data, provided you include the transport details in the JSON. This eliminates the need to separately log into the e-way bill portal for invoices that already have an IRN.

9. Penalties for Non-Compliance

10. Common Mistakes to Avoid

Based on common compliance issues faced by SMEs, here are the most frequent e-invoicing errors:

E-Invoicing Compliance Checklist for SMEs

• Verified that aggregate PAN-level turnover exceeds ₹5 crore in any prior FY
• Accounting software integrated with IRP (or using NIC IRP web portal)
• All B2B invoices, credit notes, debit notes, export invoices are covered
• IRN is generated before the invoice is dispatched or emailed to the buyer
• QR code and IRN are printed/embedded on every invoice
• Signed JSON from IRP stored in your records for each invoice
• Cancelled invoices: cancelled on IRP within 24 hours, or credit note issued after
• GSTR-1 auto-populated data reviewed every month before filing
• Team trained — accounts staff understand the 24-hour cancellation window

11. Frequently Asked Questions