What Is E-Invoicing: Meaning, Process, Benefits & Applicability

E-invoicing is the electronic authentication of B2B invoices through the GST portal. It ensures real-time reporting and reduces tax fraud.

Bhaiya, client bola invoice valid nahi hai!’

Rohit runs a packaging business and got confused when his client rejected a ₹50,000 invoice. It was because it didn’t have an IRN (Invoice Reference Number). So, the thing is that when your business crosses ₹10 crore turnover, e-invoicing becomes mandatory and that generates the IRN. But he didn’t know!
 

Rohit made the mistake, but we don’t want to repeat his deeds. That is why we came up with this blog. Here, you will understand what e-invoicing is, who needs it, how it works, and what good it reaps.

What is e-Invoicing? 

E-Invoice (Electronic Invoice) is a digitally generated invoice that must be reported on the Invoice Registration Portal (IRP). Your invoice has to be registered and verified by the government before you give it to your customer. An e-invoice becomes mandatory if your business turnover is above a certain limit (e.g., ₹10 crore from FY 2025–26).
 

You don’t create the invoice on the GST portal. Instead:
 

1. You make the invoice in your normal billing or accounting software.
    
2. The invoice is then sent to a special government website called the Invoice Registration Portal (IRP).
    
3. The IRP checks the invoice and gives back two things:
    
   • An Invoice Reference Number (IRN): It is a unique code for that invoice.
   • A QR Code: It contains invoice details in a quick-scanning format.

Now this becomes a valid e-invoice. Voila!

How is it Different from a Regular Invoice?

Now, let’s break down how an e-invoice differs from a regular one. The table below compares the two side-by-side for better understanding:
 

So with e-invoicing, the invoice becomes GST-ready right away, and most of the return filing is handled in the background. It reduces human errors and makes compliance smoother.

Terminologies (Important Terms to Remember)

You might have seen terms like IRP in the above section. These terms pop up often when dealing with e-invoicing, so let’s simplify them here. Refer to the table below to quickly understand what each one means:
 

How Does e-Invoicing Work? 

Since everything is accessible on your mobile screen, you might get confused about what to search and what to fill in. So, here is a simplified 4-step routine you can follow.

Step 1: Make Your Invoice in Billing Software

You can use any billing app like Tally, Zoho, Marg, or even Excel if it's GST-supported. Just make your regular invoice with GST details, item name, price, tax, buyer’s GSTIN, etc. The software will turn it into a “JSON file”.  This is just a format that the GST system understands. Don't worry, you don’t need to do anything extra; the software does it for you.

Follow these GST rules:
 

Remember, if your business turnover is more than ₹5 Cr+, it becomes mandatory for you to comply with each of these rules. Or else, you have to pay ₹10,000 as a penalty.

Step 2: Upload to the IRP (Invoice Registration Portal)

Now, take that file and send it to the government’s invoice portal.  But don’t worry, you won’t need to visit any website manually. Most billing software will have a “Submit to IRP” button, or your accountant can do it using offline tools.

Step 3: IRP Approves and Stamps the Invoice

After uploading, the IRP checks if all the invoice details are correct. If yes, it gives a special number called the IRN (Invoice Reference Number) and a QR Code. This proves your invoice is approved and now valid under GST.

Your software will show a message like “IRN Generated” or “e-Invoice Approved.” You can also print the invoice with the QR code now.

Step 4: System Shares the e-Invoice Automatically

Once approved, the IRP sends your e-invoice:

• Back to you (via your software)
   
• To the buyer (they can claim a tax credit)
   
• To the GSTN and E-Way Bill portals (for auto-filing your returns)
   

Your app may show “GST auto-updated” or “Shared with buyer.” If not, go to your invoice history and download the approved version.

In the table below, we have provided a summary of the 4 steps:

This entire process takes just a few seconds once your billing system is ready. Even if you’re not techy-nerd, using a simple GST-enabled software makes it easy.

Who Is Required to Use e-Invoicing? 

Not every business must use e-Invoicing. It is mandatory for only those who meet specific criteria. Let’s explore these criteria in this section:

1. Turnover-Based Applicability

Since 1 April 2025, any business with a turnover of ₹10 crore or more must issue e-Invoices for B2B transactions within 30 days.
 

2. Applicable Transactions

E‑invoices are required for:

• B2B (Business-to-Business) sales
   
• Exports and deemed exports
   
• Sales to SEZ units
   
• Supplies to the government or other registered persons
  
   Who’s Exempt?

Some businesses are not required to issue e-Invoices, even if turnover is high. These include the following:

• Banks, insurance companies, NBFCs
   
• Goods transport agencies (GTAs)
   
• Passenger transportation services, cinemas
   
• SEZ units, government departments
   

Benefits of e-Invoicing

‘Itna kyu padh rahe ho?’

Everything has a reason behind it. Why are we writing this blog for you? Why are you interested in this topic? This is because of the benefits E-Invoicing has. Let’s explore some of it here.

 1. Standardised Invoicing Format

All e-Invoices follow a full electronic JSON structure. This ensures uniform data that can be easily verified automatically. This reduces mistakes and eases system-to-system integration. 

 2. Real-Time Reporting & Faster Input Tax Credit

Once verified, e-Invoices are automatically shared with GST and e-way portals. This means buyers can claim Input Tax Credit (ITC) sooner, and sellers don’t need to manually enter invoice data. 

 3. Reduced Fraud via IRN Authentication

Every invoice is assigned an Invoice Reference Number (IRN), making it nearly impossible to generate fake or duplicate invoices. This transparency helps prevent tax fraud. 

 4. Seamless Integration with GST Systems

E-Invoicing links with e-way bills and GSTR‑1 returns. This reduces the manual work. You can say goodbye to typing the same data multiple times. Everything flows from one system to another.

Conclusion

‘Toh baat ye hai miya,’ E-invoicing makes GST filing easier, faster, and safer for medium to large businesses. It ensures accuracy, stops fraud, and saves time by automating many steps. Now, don’t wait for your father’s WhatsApp text to file one. If your turnover is ₹10 crore or more, open a new tab and file now!

Frequently Asked Questions

1. Can I cancel an e-invoice after it's generated?
Yes, e-invoices can be cancelled within 24 hours on the IRP. After that, only a debit/credit note can be issued.

2. Do I need internet connectivity all the time to generate e-invoices?
Yes, since the invoice must be uploaded to the IRP in real-time, a stable internet connection is necessary.

3. Is e-invoicing required for B2C (retail) sales?
No, currently, e-invoicing is mandatory only for B2B and export transactions, not for B2C sales.

4. What happens if I don’t generate an e-invoice when required?
It’s considered non-compliant under GST, and the invoice is treated as invalid for ITC and filing. In case of an invalid e-invoice, you could end up paying ₹10,000.

5. Can I generate e-invoices directly from the GST portal?
No, e-invoices are not generated on the GST portal. You must use accounting software or APIs that connect to the IRP.

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LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?