E-Invoicing Under GST: A Complete Implementation Guide for 2025
Comprehensive guide to GST e-Invoicing in India. Learn applicability, exemptions, reporting timelines, penalties, and a step-by-step process for compliance in 2025.
Introduction
The Goods and Services Tax (GST) regime in India has steadily adopted technology to simplify compliance and increase transparency. One of its most impactful reforms is electronic invoicing (e-Invoicing). Introduced in phases beginning 2020, this system requires eligible businesses to generate invoices in a standard format and validate them electronically through the government's Invoice Registration Portal (IRP).
By 2025, e-Invoicing is mandatory for businesses above a certain turnover threshold, and strict reporting timelines are being enforced. This guide explains what e-Invoicing is, who it applies to, how to implement it, and how to stay compliant under the latest rules.
What Is E-Invoicing Under GST?
E-Invoicing is the process of creating B2B, B2G, and export invoices in a structured digital format (JSON) that must be submitted to the Invoice Registration Portal (IRP). Once validated, the IRP assigns a unique Invoice Reference Number (IRN) and generates a QR code, making the invoice legally valid for GST purposes.
This system ensures invoices are authentic, machine-readable, and integrated automatically with GST return filings and e-way bill systems.
Applicability Timeline
E-Invoicing was rolled out gradually, with the turnover threshold being lowered in stages:
- Oct 2020 – Applicable for turnover above ₹500 crore
- Jan 2021 – Extended to businesses above ₹100 crore
- Apr 2021 – Reduced to ₹50 crore
- Apr 2022 – Brought down to ₹20 crore
- Oct 2022 – Lowered further to ₹10 crore
- Aug 2023 – Extended to businesses with turnover above ₹5 crore
2025 Update
- From 1 April 2025, businesses with ₹10 crore annual aggregate turnover (AATO) or more must upload invoices to the IRP within 30 days of issue.
- Any delay beyond 30 days will result in automatic rejection of the invoice.
- Two-Factor Authentication (2FA) is now compulsory for generating both e-invoices and e-way bills.
Who Is Exempt From E-Invoicing?
Certain categories of businesses and services are exempt regardless of turnover. These include:
- Banks, NBFCs, and insurance companies
- Goods transport agencies (GTA) providing road freight services
- Passenger transportation services
- Supplies to SEZ units
- Multiplexes issuing cinema tickets
Step-by-Step Implementation Process
1. Generate Invoice in ERP/Software
Prepare invoice using accounting software or a GST-enabled ERP system. Follow the prescribed GST INV-1 JSON schema.
2. Upload to IRP
Submit the invoice data to the Invoice Registration Portal using API, bulk upload, or the offline tool.
3. Validation & IRN Generation
The IRP validates the details, prevents duplication, and issues a unique IRN with a QR code.
4. Return of Validated Invoice
The digitally signed invoice is sent back to the supplier and simultaneously shared with the GST system and the buyer.
5. Auto-population in GST Returns
The approved invoice data flows into GSTR-1 and also links with e-way bills, reducing duplication of effort.
Document Format & Record Retention
- Format: JSON, compliant with GST INV-1 schema.
- Retention: Businesses must preserve e-invoices for eight years, as per GST rules.
Benefits of E-Invoicing
- ✅ Reduced Errors – Eliminates manual entry mistakes by automating data flow.
- ✅ Simplified Compliance – Direct integration with GSTR-1 and e-way bill systems.
- ✅ Fraud Prevention – Real-time validation reduces fake invoices.
- ✅ Faster Processing – Standard format improves turnaround for payments and audits.
- ✅ Interoperability – Works across different software platforms due to a unified standard.
Penalties for Non-Compliance
- Not issuing e-invoice: Penalty of ₹10,000 per invoice or 100% of tax due, whichever is higher.
- Incorrect details: Fine of up to ₹25,000.
- Late submission beyond 30 days: The IRP will reject the invoice, making it invalid for GST claims.
2025 Compliance Checklist
| Requirement | Action Needed by Business |
|---|---|
| Applicability | Check if AATO ≥ ₹10 crore |
| Reporting window | Upload invoices within 30 days |
| Authentication | Enable Two-Factor Authentication (2FA) |
| Invoice format | JSON (GST INV-1 schema) |
| Record retention | Preserve for at least 8 years |
| Penalties | Be aware of fines and auto-rejections |
Conclusion
E-Invoicing under GST is no longer optional for mid-sized and large businesses. With the new 30-day reporting rule from April 2025 and mandatory 2FA, companies must tighten their compliance practices.
The best approach is to integrate accounting systems with the IRP through APIs, train finance teams, and regularly review GST advisories. Businesses that adapt quickly will not only avoid penalties but also gain from smoother tax compliance and better operational efficiency.