E-invoicing under GST represents a transformative shift in the Indian tax landscape, moving away from fragmented billing systems toward a unified, real-time reporting framework. By mandating the electronic registration of B2B invoices on the government’s portal, the system ensures that every transaction is validated and recorded before it ever reaches the customer. In the 2025-26 fiscal year, this digital infrastructure has become the backbone of the GST 2.0 initiative, aimed at eliminating manual errors, reducing tax evasion, and automating the reconciliation of input tax credits. For businesses operating in today’s high-speed economy, staying compliant with e-invoicing is no longer just a legal necessity but a strategic advantage that fosters transparency and trust across the supply chain.

What exactly is E-invoicing under GST?

There is a common misconception that E-invoicing means generating an invoice directly on the government's website. In reality, it’s a bit different. You still use your own accounting software (like ERPs or billing apps) to create your bill.

The E-invoice part happens when your software talks to the government’s Invoice Registration Portal (IRP). The portal checks the data, gives it a digital signature, and assigns a unique Invoice Reference Number (IRN) and a QR Code. Only then is the invoice considered a legal document under GST law.

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Why did the government introduce this?

In the old days, many businesses would edit invoices after filing returns or fail to report sales entirely. With E-invoicing, the data is pushed to the GST portal the moment the sale happens. This makes it almost impossible to manipulate records and ensures that the buyer gets their tax credit accurately and instantly.

Who must generate E-invoices in 2025-26?

The government has been lowering the turnover limit in phases to bring more businesses into the digital fold.

As we move through the 2025-26 period, the mandatory limit for E-invoicing applies to any business whose aggregate annual turnover (in any previous financial year from 2017-18 onwards) exceeds ₹5 Crores.

Important Thresholds Table

Business Type

Threshold (Annual Turnover)

Requirement

Small Businesses

Below ₹5 Crores

Optional (but recommended)

MSMEs & Corporates

Above ₹5 Crores

Mandatory for B2B & Exports

Exempted Sectors

Banks, Insurance, SEZ Units, Passenger Transport

Exempted from E-invoicing

The New 30-Day Reporting Rule (2025 Update)

If you are a business with a turnover of ₹100 Crores or more, a very important rule kicked in recently. You must report your invoices to the IRP within 30 days of the invoice date.

For example, if you issue an invoice on October 1, 2025, you cannot upload it to the portal for an IRN after October 30. If you miss this window, the invoice becomes invalid for GST purposes, and your buyer will not be able to claim their Input Tax Credit (ITC). Smaller businesses (under ₹100 Cr) are expected to follow this rule by late 2026.

How is an E-invoice generated? (The step-by-step flow)

Generating an E-invoice is now a seamless part of the billing process.

Step 1: Create the Invoice on Your System

You prepare your invoice on your computer as usual. You must ensure that mandatory fields like GSTIN of the supplier and buyer, HSN code, and tax rates are filled correctly.

Step 2: Generate the JSON File

Your accounting software will convert the invoice details into a JSON file. This is a technical format that the government’s portal can read quickly.

Step 3: Upload to the IRP

Your software automatically sends this JSON to the Invoice Registration Portal (IRP). There are now several authorized IRPs in India to handle the massive 2025 traffic.

Step 4: Verification and Digital Signature

The IRP validates the data (checking if the GSTIN is active, for example). It then generates:

IRN (Invoice Reference Number): A 64-character unique code.
QR Code: Contains the essential details of the invoice.
Digital Signature: Proof that the government has verified the bill.

Step 5: Receive the Signed Data

The portal sends the signed JSON back to your software. Your system then prints the QR Code on your invoice. You can now send this final PDF or paper bill to your customer.

Benefits of E-invoicing for Your Business

While it might feel like extra work at first, E-invoicing actually solves several headaches for business owners:

Automatic GSTR-1 Filing: Once you generate an E-invoice, the details are automatically pulled into your GSTR-1 return. You don't have to type them again at the end of the month!
Instant E-way Bills: If you are transporting goods, the data from the E-invoice can be used to generate an E-way bill instantly, saving your logistics team hours of manual work.
Faster Payments: Since your customer can see the invoice reflected in their GSTR-2B almost immediately, they have more confidence in paying you on time.
No More Data Entry Errors: Because the data flows directly from your billing system to the government and then to your buyer, there’s no risk of typos causing tax mismatches.

Essential fields in an E-invoice (2025-26)

To get your IRN successfully, your invoice must contain these specific details. If any of these are missing, the IRP will reject your JSON.

Field Name

Description

Supplier Info

Legal Name, GSTIN, and Address.

Recipient Info

Buyer's GSTIN, Billing Address, and Shipping Address.

Invoice Details

Invoice Number (cannot start with 0, / or -), Date, and Type (Tax Invoice/Debit Note/Credit Note).

Item Details

Description, HSN Code (minimum 4-6 digits), Quantity, and Unit Price.

Tax Breakup

IGST, CGST, SGST, and Cess (if applicable).

Total Value

Final invoice amount (rounded off).

Common Challenges and How to Handle Them

Even with the best systems, things can sometimes go wrong.

Internet Downtime: If the portal is down or your internet is out, you can't get an IRN. Solution: Most modern software allows Offline Queuing, where it saves the invoices and uploads them the moment you're back online.
Cancellations: You cannot edit an E-invoice once an IRN is generated. Solution: If you made a mistake, you must cancel the IRN on the portal within 24 hours. After 24 hours, you have to issue a Credit Note instead.
Duplicate Invoice Numbers: The portal will reject an invoice number that has been used before in the same financial year. Solution: Maintain a strict, sequential numbering system.

Conclusion

E-invoicing is the new normal for Indian business. For the 2025-26 fiscal year, it has evolved from a complex technical requirement into a smooth, automated process that helps businesses stay honest and efficient. By moving to a system where invoices are verified in real-time, the government has made it easier for you to file returns and for your customers to claim their tax credits. While the ₹5 Crore limit brings many smaller players into the loop, the long-term benefits of reduced paperwork and faster reconciliations make it a win-win for everyone involved in the Indian economy.

Frequently Asked Questions (FAQs)

Is E-invoicing mandatory for B2C (Customer) bills?

No. As of late 2025, E-invoicing is only mandatory for B2B (Business to Business) transactions and Exports. For sales to regular customers (B2C), you still issue normal invoices, although you must include a self-generated Dynamic QR code if your turnover is very high (above ₹500 Cr).

Can I generate an E-invoice manually on the GST portal?

No. The GST portal does not have a facility to type out an invoice. You must use a billing software, an Excel-based utility tool provided by the government, or a mobile app that connects to the IRP via an API.

What happens if I forget to generate an E-invoice?

Technically, a bill without an IRN and QR code (when you are mandated to have one) is not a legal invoice. You may face a penalty of ₹10,000 or the tax amount (whichever is higher), and your buyer will be denied their Input Tax Credit.

Can I cancel an E-invoice after 24 hours?

No. The IRP only allows cancellation within 24 hours. After that, the data is pushed to the GST returns system. To nullify the invoice after 24 hours, you must issue a Credit Note on the GST portal.

Is the 30-day reporting rule applicable to everyone?

In 2025, this rule applies to businesses with a turnover of ₹100 Crores and above. Smaller businesses are currently exempt from this specific time limit but are encouraged to report invoices as soon as possible.

Do I need to print the QR code on the invoice?

Yes. It is a legal requirement to have the QR code printed on the physical or digital copy of the invoice sent to the buyer. The IRN number itself is optional to print, but the QR code is mandatory.

Does E-invoicing apply to Nil-rated or Exempted goods?

No. E-invoicing is only required for taxable supplies. If you are selling 100% exempted goods, you issue a Bill of Supply, not an E-invoice.

Can I use a mobile app to generate E-invoices?

Yes. Several government-authorized apps allow small taxpayers to generate E-invoices on the go, which is very helpful for distributors and field sales teams.

What is the Sandbox environment?

Before you start generating real E-invoices, the government provides a Sandbox (a testing site). This allows you to test your software to ensure the data is flowing correctly without affecting your actual tax records.

Do I need to archive the JSON files?

While the portal stores them for a short time, it is highly recommended that you store the signed JSON and PDF copies of your E-invoices for at least 72 months (6 years) for audit purposes.

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