What Is E-Invoicing Under GST?
E-invoicing under GST is the requirement that notified categories of GST-registered businesses report the particulars of their business-to-business (B2B) invoices, and export invoices, to a government-notified Invoice Registration Portal (IRP) before those invoices take legal effect. The IRP validates the invoice data, generates a unique Invoice Reference Number (IRN), digitally signs the invoice, and returns it — along with a QR code — to the supplier. A tax invoice issued by a notified taxpayer is not treated as a valid invoice under GST law unless it carries this IRN.
E-invoicing is not a separate invoice format and it is not generated by a government system on the taxpayer's behalf. Businesses continue to create invoices on their own accounting, billing, or ERP software exactly as before; what changes is that the invoice data must be reported to the IRP, in a prescribed electronic schema, before or as the invoice is issued, so the IRP can register it and hand back the IRN that makes it valid.
Legal Basis
Rule 48(4) of the CGST Rules, 2017
Rule 48(4) of the Central Goods and Services Tax Rules, 2017 is the operative provision: it requires notified classes of registered persons to prepare invoices by uploading the specified invoice particulars in the prescribed electronic form to the common portal and obtaining an Invoice Reference Number, in the manner and subject to the conditions notified by the government. An invoice issued by a notified person that does not go through this process is not treated as a valid tax invoice — the IRN is not a formality layered on top of a complete invoice, it is what completes the invoice.
Section 31 of the CGST Act, 2017 — Tax Invoice
Rule 48 sits under Section 31 of the CGST Act, 2017, the parent provision governing tax invoices generally — when a registered person must issue a tax invoice for a supply of goods (before or at the time of removal or delivery) and for a supply of services (within the prescribed period after the service is provided), and what particulars it must show. E-invoicing does not change these timing rules; it adds the IRP reporting step on top of them for the taxpayers it covers.
How the Invoice Registration Portal Process Works
The mechanics, as set out in the GST Network's own e-invoice/IRN System Detailed Overview, run in a fixed sequence:
- The supplier generates the invoice on its own accounting, billing, or ERP system, exactly as before.
- The invoice particulars are reported to the Invoice Registration Portal (IRP) in the notified JSON schema, notified as FORM GST INV-01, either directly via API, through the taxpayer's software provider, or through a GST Suvidha Provider (GSP).
- The IRP checks the data, computes a hash from the supplier's GSTIN, invoice number, and financial year, and registers that hash as the unique IRN — the IRP will return only one valid IRN for a given invoice, even where more than one IRP exists.
- The IRP digitally signs the e-invoice (including the IRN) and generates a QR code carrying the IRN and other key particulars, so the invoice can be verified offline.
- The signed e-invoice and QR code are returned to the supplier, who can print the QR code on the paper or PDF invoice exactly as it prints its own logo and other details today.
- The reported invoice auto-populates the supplier's GSTR-1 return and, where applicable, feeds the auto-generation of the corresponding e-way bill, reducing duplicate data entry across GST filings.
An e-invoice already reported to the IRP can be cancelled within the specified window; it cannot be amended on the IRP itself — any amendment happens only on the GST portal, at the time of filing GSTR-1, in the same way other return-level invoice corrections are made.
Who Must Generate E-Invoices — and Who Is Exempt
Rule 48(4) does not itself name anyone. It leaves the class of registered persons to be notified, and the notification that does the work is Notification No. 13/2020 – Central Tax, dated 21 March 2020, as amended seven times since (by Notifications 61/2020, 70/2020 and 88/2020 of 2020, 05/2021, 01/2022, 17/2022 and 10/2023 – Central Tax). As it now stands, it notifies every registered person other than a Special Economic Zone unit and the persons described in sub-rules (2), (3), (4) and (4A) of rule 54 of the CGST Rules, whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds the notified figure, in respect of supplies of goods or services to a registered person or for exports. Reading rule 54 across, the classes carved out regardless of turnover are:
- Special Economic Zone (SEZ) units, excluded by Notification No. 61/2020 – Central Tax dated 30 July 2020
- An insurer, a banking company, or a financial institution, including a non-banking financial company (rule 54(2))
- A goods transport agency supplying services in relation to the transportation of goods by road in a goods carriage (rule 54(3))
- Suppliers of passenger transportation service (rule 54(4))
- Suppliers of services by way of admission to exhibition of cinematograph films in multiplex screens (rule 54(4A))
Everyone else is inside the requirement once they cross the turnover threshold. That threshold is ₹5 crore of aggregate turnover in any preceding financial year from 2017-18 onwards, and it has applied since 1 August 2023. Notification No. 10/2023 – Central Tax, dated 10 May 2023, substituted “five crore rupees” for “ten crore rupees” in Notification No. 13/2020 with effect from that date. The threshold has ratcheted down through the whole life of the scheme — ₹100 crore at launch, then ₹500 crore, ₹100 crore, ₹50 crore, ₹20 crore, ₹10 crore and now ₹5 crore — so a figure quoted from an older article is very likely to be stale, and the test looks back across every financial year from 2017-18, not just the year just ended.
Two features of that test catch businesses out. Turnover is aggregate turnover as defined in section 2(6) of the CGST Act: computed on an all-India basis across every registration holding the same PAN, and including exempt supplies and exports. And crossing the threshold in any preceding year from 2017-18 onwards brings a business permanently within the requirement, so turnover falling back below ₹5 crore in a later year does not take it out again.
Why E-Invoicing Matters for a Foreign Company in India
For a foreign-owned GST-registered subsidiary, branch, or project office that crosses the notified AATO threshold, e-invoicing is not optional paperwork layered on top of GST compliance — it determines whether the invoices the business issues, and the invoices its vendors issue to it, are legally valid tax invoices at all:
- Your own outward invoices. If your entity is a notified taxpayer, a B2B invoice you issue without a valid IRN is not a valid tax invoice under Rule 48(5) of the CGST Rules — the underlying supply may still be taxable, but the document itself does not satisfy the invoicing requirement.
- Your input tax credit as a buyer. If a notified vendor supplies you and fails to route the invoice through the IRP, the document you hold to support your input tax credit (ITC) claim is deficient in the same way — the defect sits with the seller's invoice, but the buyer bears the practical risk of a credit challenged on audit.
- Systems, not just filings. Because IRP reporting has to happen before or at the point of invoicing, it has to be built into the entity's accounting or ERP workflow — through direct API integration, a billing software update, or a GSP — rather than handled as a monthly return-filing task the way GST return filing itself can be.
- Onboarding discipline for a new entity. A newly incorporated Indian subsidiary should confirm its e-invoicing status (whether it is exempt, or below the ₹5 crore threshold) as part of setting up its GST compliance process at GST registration, not after it has already crossed the threshold and started issuing invoices that turn out to be invalid.
Worked Example
A German auto-parts manufacturer's Indian wholly-owned subsidiary sells components to two categories of customers: other GST-registered manufacturers (B2B) and retail counters that are not GST-registered (B2C). Once the subsidiary's aggregate turnover crosses ₹5 crore in any financial year from 2017-18 onwards, every invoice to a registered person, and every export invoice, must be reported to the IRP before it is issued. Invoices to the unregistered retail counters fall outside the requirement. The subsidiary's ERP is configured to call the IRP's API automatically at the moment an invoice is generated; the IRP returns the IRN and QR code within seconds, and the ERP embeds the QR code on the printed and PDF copies of the invoice. If the API call fails — a connectivity issue, for example — the invoice cannot be validly issued to that B2B customer until the IRN is obtained, so the subsidiary's finance team treats a failed IRP call as a blocking error in the billing workflow, not a warning to resolve later.
Frequently Asked Questions
What is an Invoice Reference Number (IRN) and who generates it?
The IRN is a unique reference number the Invoice Registration Portal computes for each invoice reported to it, based on the supplier's GSTIN, the invoice number, and the financial year. The IRP alone generates it — a taxpayer's accounting or billing software cannot create a valid IRN on its own; it can only report the invoice data to the IRP and receive the IRN back.
Is e-invoicing a new type of invoice format?
No. Businesses continue to prepare invoices on their own accounting, billing, or ERP systems in the same way as before. E-invoicing adds a reporting step: the invoice particulars are uploaded to the Invoice Registration Portal, which validates them, generates the IRN, digitally signs the invoice, and returns a QR code the supplier can print on the same invoice.
What is the turnover threshold for e-invoicing?
₹5 crore of aggregate turnover in any preceding financial year from 2017-18 onwards, with effect from 1 August 2023. Notification No. 10/2023 – Central Tax, dated 10 May 2023, lowered it from ₹10 crore by amending Notification No. 13/2020 – Central Tax. Aggregate turnover is measured on an all-India basis across every GST registration sharing the same PAN.
Which businesses are exempt from e-invoicing regardless of turnover?
Special Economic Zone units, insurers, banking companies and financial institutions (including NBFCs), goods transport agencies supplying road transport of goods, suppliers of passenger transportation service, and suppliers of cinema-admission services in multiplex screens are outside the requirement irrespective of turnover. The carve-outs come from Notification No. 13/2020 – Central Tax read with sub-rules (2), (3), (4) and (4A) of rule 54 of the CGST Rules, with the SEZ-unit exclusion added by Notification No. 61/2020 – Central Tax.
Can an e-invoice be corrected after the IRP has issued the IRN?
Not on the IRP itself. An already-registered e-invoice can be cancelled within the specified time window, but any amendment to the invoice is carried out only on the GST portal at the time of filing GSTR-1 — the Invoice Registration Portal does not support amending a reported invoice directly.
What happens if a notified taxpayer issues a B2B invoice without an IRN?
Under Rule 48(5) of the CGST Rules, an invoice issued by a person required to generate e-invoices, without obtaining a valid IRN in the manner prescribed, is not treated as a valid tax invoice for the supply — with consequences for the buyer's ability to rely on it in support of an input tax credit claim.
See also: Goods and Services Tax (GST), E-Way Bill, and Input Tax Credit (ITC).
Setting up GST compliance for a new Indian entity? Beacon Filing helps foreign-owned businesses build e-invoicing, e-way bill, and return-filing workflows into their India operations from day one.