GST E-Invoicing: Process, Benefits & New Rules from April 1, 2025

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What’s in Today’s Article?

The GST Council of India introduced e-invoicing (electronic invoicing) in a phased manner to standardize business-to-business (B2B) invoice reporting to the GST portal.
There were no predefined formats. Hence, a uniform structure was developed in consultation with trade bodies and the Institute of Chartered Accountants of India.
Over time, several modifications have been made to the e-invoicing regulations to enhance compliance and efficiency.

GST e-invoicing is a system where B2B and export invoices are reported to the Union Government’s e-invoice portal for validation.
Each invoice receives a unique Invoice Reference Number (IRN).
However, invoices are not generated by the government but are created by taxpayers in their own systems and then reported.
The system enables seamless electronic data exchange through API integration.

Approved in the 37th GST Council meeting on September 20, 2019.
Rolled out in a phased manner starting October 2020 for businesses with an Annual Aggregate Turnover (AATO) above ₹500 crore.
Extended in January 2021 to businesses with AATO between ₹100 crore and ₹500 crore.

Taxpayers generate invoices using their own accounting/billing/ERP systems.
The invoices are reported to the Invoice Registration Portal (IRP).
The IRP validates the invoice and assigns a Unique Invoice Reference Number (IRN) along with a QR code.
A GST invoice is legally valid only if it contains a valid IRN.

Automation & Efficiency
- Invoice details are auto-populated into GST return forms and e-way bills, reducing time and manual effort.
- Minimizes disputes and processing costs by ensuring digital storage of all forms.
- Improves payment cycles, enhancing overall business efficiency.
Standardization & Interoperability
- Uses a digitally verifiable e-invoice format based on international standards (UBL/PEPPOL).
- Ensures machine readability and uniform interpretation across different platforms.
- Allows taxpayers to seamlessly switch between different portals.
Fraud Prevention & Compliance
- Reduces fraudulent transactions by providing real-time access to data for tax authorities.
- Helps in curbing tax evasion and malpractice, leading to greater transparency.

Mandatory 30-Day Deadline for E-Invoice Reporting
- Businesses with an Annual Aggregate Turnover (AATO) of ₹10 crore and above must report e-invoices to the Invoice Registration Portal (IRP) within 30 days of issuance.
- Earlier, this rule applied only to businesses with AATO above ₹100 crore.
- With the lower turnover threshold, many more businesses must now comply with this rule.
Stricter Compliance & Penalties
- Currently, businesses delay invoice uploads, causing discrepancies in Input Tax Credit (ITC) claims.
- From April 1, IRPs will block invoice uploads beyond 30 days, rejecting late submissions.
- Non-compliance may lead to penalties and financial consequences.
Compulsory Two-Factor Authentication (2FA)
- From April 1, all taxpayers, regardless of turnover, must use Two-Factor Authentication (2FA) for e-invoice and e-way bill generation.