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

What’s in Today’s Article?

• GST e-Invoicing Latest News
• GST E-Invoicing: Overview & Process
• Advantages of GST E-Invoicing
• New GST E-Invoicing Rules from April 1, 2025
• GST e-Invoicing FAQs

GST e-Invoicing Latest News

• 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. 

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GST E-Invoicing: Overview & Process

• 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.

Approval & Rollout

• 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.

Documents Required for IRN Generation

• GST Invoices
• Credit Notes
• Debit Notes (for B2B supplies and exports)

Exempted Businesses

• Special Economic Zone (SEZ) units
• Insurance and banking sectors, including NBFCs
• Multiplex cinema admissions
• Goods transport agencies (road transport)
• Passenger transport services

E-Invoicing Process

• 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.

Advantages of GST E-Invoicing

• 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.

New GST E-Invoicing Rules from April 1, 2025

• 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.

GST e-Invoicing FAQs

Q1. What is GST e-invoicing?

Ans. GST e-invoicing is an electronic system for reporting B2B and export invoices to the government’s Invoice Registration Portal (IRP).

Q2. How does GST e-invoicing work?

Ans. Businesses generate invoices, upload them to IRP, get a unique Invoice Reference Number (IRN), and use it for compliance.

Q3. What are the benefits of GST e-invoicing?

Ans. It automates compliance, prevents tax fraud, reduces errors, and integrates invoices with GST returns and e-way bills.

Q4. What changes in GST e-invoicing from April 1, 2025?

Ans. Businesses with ₹10 crore+ turnover must report invoices within 30 days, and Two-Factor Authentication (2FA) is mandatory.

Q5. Who is exempt from GST e-invoicing?

Ans. SEZ units, banks, NBFCs, passenger transport services, and goods transport agencies are exempt.

Source: TH | CNBC TV18