E-invoicing under GST means every B2B invoice above the applicable turnover threshold has to be registered on the Invoice Registration Portal (IRP) before it's valid — the IRP returns a unique Invoice Reference Number (IRN) and a QR code, and an invoice without these isn't treated as a valid tax invoice at all for GST purposes, no matter how correctly it's otherwise formatted.
How the Threshold Got Here
When e-invoicing launched, it applied only to businesses with turnover above ₹500 crore. Over successive notifications, the threshold has been lowered repeatedly — to ₹100 crore, then ₹50 crore, then ₹20 crore, then ₹10 crore, and further down since — to the point that it now covers the large majority of GST-registered businesses with any meaningful B2B turnover, not just large enterprises. If you registered for GST assuming e-invoicing "doesn't apply to businesses my size," it's worth re-checking against the current threshold rather than relying on what was true a couple of years ago.
The test isn't your turnover in the current year alone — it's your aggregate turnover across all GSTINs held under the same PAN, checked against any of the preceding financial years. Once you cross the threshold in any one year, e-invoicing becomes mandatory going forward, even if your turnover subsequently drops below it. There's no opting back out.
How It Actually Works, Step by Step
1. You generate the invoice in your billing or accounting software exactly as you normally would. 2. The software (or a GSP/connector sitting between your software and the government system) formats the invoice data into the prescribed JSON schema and pushes it to the IRP. 3. The IRP validates the data — checking GSTINs, HSN codes, tax calculations, and mandatory fields — and, if everything passes, generates the IRN, a QR code, and digitally signs the response. 4. The signed response is pulled back into your software automatically and the QR code is printed on the invoice you hand to your customer.
This isn't a parallel paperwork exercise sitting alongside your normal invoicing — your GSTR-1 for B2B supplies auto-populates from validated e-invoice data. A rejected or missing IRN doesn't just mean a technically invalid invoice; it creates a downstream mismatch in your GSTR-1 that you'll have to manually correct.
Common Setup Mistakes We See
The single most frequent issue is HSN or SAC codes that don't match the exact format and digit-length the IRP expects — a code that's technically "close enough" for a human reading the invoice will still get rejected by the automated validation. Second most common: incorrect state codes embedded in the buyer's GSTIN not matching the state mentioned in the address fields, which the IRP cross-checks automatically. Third: duplicate invoice numbers across different series (say, one series for domestic sales and one for exports) that the system can't distinguish because the invoice-numbering scheme wasn't planned with e-invoicing's requirements in mind from the start.
Getting the numbering scheme and HSN/SAC master list correct before you go live saves weeks of after-the-fact correction — retroactively fixing rejected or duplicate invoice numbers after a few months of live transactions is far more painful than a half-day setup review beforehand.
What's Exempt
Certain categories remain outside e-invoicing regardless of turnover — supplies to unregistered persons (B2C), SEZ units acting as suppliers in specific notified cases, certain financial institutions, GTAs opting for a specific exemption, and a few other notified categories. If most of your business is B2C, e-invoicing may not apply to the bulk of your invoicing even if your turnover crosses the threshold — but any B2B portion still needs to comply.
Frequently Asked Questions
Do I need special software to generate e-invoices, or can my existing billing tool do it? Most modern accounting software (Tally, Zoho Books, Vyapar, and others) has built-in IRP integration or connects through a GST Suvidha Provider (GSP). Very old or heavily customised legacy systems sometimes need a middleware connector — worth checking with your software vendor before assuming it's automatic.
What happens if the IRP rejects an invoice after I've already handed it to the customer? You'll need to cancel the rejected invoice (within 24 hours of IRN generation, if it was actually generated but you need to cancel) or reissue a corrected one — this is exactly why validating the invoice before printing and handing it over matters, rather than treating IRN generation as an afterthought.
Is e-invoicing the same thing as e-way bills? No — they're related but separate systems. E-invoicing validates the tax invoice itself and generates an IRN; e-way bills are a separate requirement for the physical movement of goods above a value threshold. An e-invoice can auto-generate the e-way bill data, but they serve different compliance purposes.