Understand GST e-invoicing, current turnover applicability, IRP workflow, invoice fields, exemptions, cancellation rules, and ERP-led compliance tracking.
A finance manager at a distribution company with ₹8 crore in aggregate turnover discovers that their billing team has been raising B2B invoices through standard accounting software without IRP registration. No IRN has been generated on any invoice for the past six months. The company crossed the ₹5 crore applicability threshold in August 2023 — and has been non-compliant since then. The fix requires retroactive reconciliation, IRP registration, and immediate workflow reconfiguration. This scenario repeats regularly as businesses cross the current threshold and are unaware that e-invoicing now applies to them.
GST e-invoicing has been mandatory for eligible businesses since October 2020. The applicability threshold has been reduced six times, from ₹500 crore at launch to ₹5 crore from August 2023. Finance teams at businesses above this turnover level need to understand what e-invoicing requires, how the IRP process works, and how ERP-based workflows help manage ongoing compliance. This guide covers the statutory framework, IRP process, mandatory fields, generation modes, exemptions, and cancellation rules. The broader ERP compliance context for operational businesses treats GST e-invoicing as part of the GST return filing discipline.
Quick note on GST e-invoicing applicability
This guide is a refreshed version of an earlier Exactlly article and has been updated for current operational relevance.
GST e-invoicing applicability has changed in phases since its October 2020 introduction. The threshold has been reduced six times, and the rules around which businesses and transaction types are covered have been updated through GSTN/CBIC notifications. The figures in this guide reflect the framework as last updated for the August 2023 phase. Businesses should verify current applicability on the official e-invoice portal (einvoice1.gst.gov.in) or with their tax advisor before configuring ERP workflows for specific compliance scenarios.
What is GST e-invoicing?
GST e-invoicing is a standardised electronic invoice reporting system under the GST framework. It does not mean that the Government generates invoices for businesses. Instead, businesses generate invoices through their own accounting or ERP software and then report the invoice data to the Invoice Registration Portal (IRP). The IRP authenticates the invoice, generates a unique Invoice Reference Number (IRN), attaches a QR code, and returns a digitally signed JSON to the supplier.
The core objective is interoperability: a uniform invoice format that any GST-compliant accounting system can read and process without manual re-entry. When a supplier's software generates an invoice and a buyer's software receives it, both work with the same structured data schema — reducing reconciliation errors, double data entry, and disputes between transacting parties.
The GST Council approved the e-invoice format in its 39th meeting in September 2019. The format was developed by GSTN in alignment with PEPPOL (Pan-European Public Procurement Online) standards and the Universal Business Language (UBL) XML specification, making it compatible with international e-invoicing frameworks.
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GST e-invoicing applies to registered taxpayers whose aggregate annual turnover (across all GSTINs under a single PAN, India-wide) exceeds the current applicability threshold. As of August 2023, this threshold is ₹5 crore.
E-invoicing applies primarily to B2B invoices, debit notes, and credit notes, and to export invoices. B2C invoices are generally outside the e-invoicing mandate; however, businesses above the threshold are required to display a QR code on B2C invoices above a specified value. Finance teams should confirm current B2C requirements from GSTN guidance, as these rules have evolved alongside the main e-invoicing rollout.
The turnover threshold is based on aggregate turnover in the preceding financial year. A business that crosses ₹5 crore in any financial year typically becomes liable for e-invoicing from the start of the next financial year (or immediately upon crossing the threshold in certain regulatory interpretations — verify the applicable position from GSTN or your tax advisor). Results depend on specific turnover calculation methodology, applicable exclusions, and how aggregate turnover is computed across GSTINs under a single PAN.
For an introduction to the GST framework that underpins e-invoicing, see All You Need to Know About GST — A Compliance Primer. For GST registration requirements, see GST Registration Basics — Amendment, Cancellation, and Revocation.
GST e-invoicing threshold timeline
The applicability threshold has been reduced in six phases since October 2020. Businesses that were not covered under the original ₹500 crore limit may now be covered under the current ₹5 crore threshold.
| Phase | Effective from | Aggregate turnover threshold |
|---|---|---|
| Phase 1 | October 2020 | Above ₹500 crore |
| Phase 2 | January 2021 | Above ₹100 crore |
| Phase 3 | April 2021 | Above ₹50 crore |
| Phase 4 | April 2022 | Above ₹20 crore |
| Phase 5 | October 2022 | Above ₹10 crore |
| Phase 6 | August 2023 | Above ₹5 crore |
Businesses should check the GSTN e-invoice portal or consult their tax advisor to verify whether further reductions have been announced since August 2023. The government has signalled intent to extend e-invoicing to smaller businesses, so the threshold may be reduced further in subsequent phases. Results depend on the applicable notification at the time of assessment; the timeline above is directional and may not reflect the latest GSTN/CBIC position.
How the GST e-invoicing process works
The e-invoicing process follows a defined sequence between the supplier's billing system, the IRP, and the GST/e-way bill portals.
Generating and reporting the invoice
The supplier generates an invoice through their accounting software or ERP in the standard format (schema defined by GSTN). The invoice data is assembled in JSON format and submitted to the IRP — either directly via API integration, through a GST Suvidha Provider (GSP), through the offline bulk generation tool, or via the IRP's web interface.
Suppliers cannot generate an IRN themselves. The IRN is generated exclusively by the IRP after it receives and validates the invoice data.
IRP authentication and IRN generation
When the IRP receives the invoice JSON, it performs three checks:
- Validates that the invoice is not a duplicate (based on Seller GSTIN, financial year, document type, and invoice number)
- Validates the key mandatory fields against the GSTN schema
- Authenticates the invoice and generates a unique IRN
The IRN is a 64-character hash generated from four parameters: Seller GSTIN, financial year (YYYY-YY format), document type (INV for invoice, DN for debit note, CN for credit note), and the invoice number.
Once authenticated, the IRP:
- Generates the IRN and attaches it to the invoice
- Creates a QR code containing the key invoice details and IRN
- Digitally signs the complete invoice JSON
- Returns the signed JSON (with IRN and QR code) to the supplier
- Sends an email notification to the supplier confirming IRN generation
- Forwards the invoice data to the GST portal for auto-population of the supplier's GSTR-1
- If applicable, forwards the relevant data to the e-way bill system for auto-generation of the e-way bill
After IRN generation
The supplier prints the invoice with the IRN and QR code displayed. The IRN must be captured in the supplier's billing system against the corresponding tax invoice for reconciliation and e-way bill tracking. The buyer's GSTR-2B is auto-populated with the invoice data, enabling automatic input tax credit matching.
Mandatory fields in a GST e-invoice
The GST e-invoice schema contains 12 sections (5 mandatory, 7 optional) and 6 annexures, comprising 138 fields in total. Of these, mandatory fields fall into five core sections.
Core mandatory sections
| Section | Key fields |
|---|---|
| Basic details | IRN, Invoice Type Code, Invoice Number, Invoice Date |
| Supplier information | Supplier Legal Name, Supplier GSTIN, Supplier Address, Supplier State, Supplier Pincode |
| Recipient information | Billing Name, Billing GSTIN, Place of Supply (POS), Billing Address, Billing State, Billing Pincode |
| Invoice item details | Serial number, Product/Service description, HSN/SAC code, Quantity, Rate, Assessable Value, GST Rate, IGST/CGST/SGST amounts |
| Document total | Total Invoice Value (inclusive of GST), Tax Total, Paid Amount, Amount Due |
Key field notes
IRN: Can be pre-generated by the seller's system using the defined hash function, or left blank — in which case the IRP generates it. The invoice is valid only after the IRN is registered on the IRP.
Invoice Type Code: Identifies the transaction type — Reg (regular), SEZP (SEZ with payment), SEZWP (SEZ without payment), EXP (export with payment), EXPWP (export without payment), DEXP (deemed export).
Preceding Invoice Reference: Required for debit notes and credit notes that amend an original invoice. Must reference the original invoice number and date.
Tax Scheme: Mandatory field; always "GST" for GST-registered transactions.
ERP systems configured for e-invoicing must capture and validate all mandatory fields before the JSON is submitted to the IRP. A submission with missing or invalid mandatory fields will be rejected by the IRP and no IRN will be generated.
Ways to generate GST e-invoices
Taxpayers can choose from four modes depending on their volume and technical setup:
API-based integration: The supplier's ERP or accounting software connects directly to the IRP via API. Suitable for high-volume businesses. Requires IP whitelisting or GSP-based API access. Supports real-time IRN generation and automated return data flow.
GST Suvidha Provider (GSP)-based: Integration through an authorised GSP that acts as an intermediary between the supplier's system and the IRP. GSPs handle the API connectivity, allowing businesses to use the IRP without direct IP registration.
Offline bulk generation tool: Suppliers can download the IRP's bulk generation tool, prepare invoice data in Excel, export a JSON file, and upload it to the IRP portal for bulk IRN generation. Suitable for medium-volume businesses without API integration.
Web-based interface: The IRP provides a web screen for manual invoice entry and IRN generation. Intended for low-volume or occasional use — for regular operations, API or bulk tool modes are recommended.
Large taxpayers benefit from bulk upload capability: ERP systems can be configured to batch-export invoice JSON files at the end of each billing cycle, upload to the IRP in bulk, and retrieve IRNs for all invoices in one operation.
Exemptions from GST e-invoicing
The following categories of registered persons are exempt from the e-invoicing mandate, even if their turnover exceeds the applicability threshold:
- Special Economic Zone (SEZ) units (note: supplies to SEZ are covered; it is the SEZ unit itself that is exempt from generating e-invoices)
- Insurers and banking companies, including Non-Banking Financial Companies (NBFCs)
- Goods Transport Agencies (GTAs) supplying services for transportation of goods by road in goods carriages
- Dealers in passenger transportation services
- Multiplex cinema operators (in respect of admission tickets)
Businesses that fall into exempt categories should confirm current exemption coverage from the GSTN portal or their tax advisor, as the exemption list has been updated through CBIC notifications alongside the threshold reductions.
Cancellation and amendment rules
Cancellation
An e-invoice with an active IRN can be cancelled on the IRP within 24 hours of IRN generation. After 24 hours, cancellation must be handled through the GST returns process (by reporting the invoice as cancelled in GSTR-1) — the IRP no longer accepts direct cancellation requests after this window.
When an invoice is cancelled on the IRP, a new invoice must be raised with a new invoice number to replace it. The cancelled invoice's IRN remains in the IRP's records and cannot be reused.
If an e-way bill has already been generated against the invoice, the e-way bill must be cancelled before the e-invoice can be cancelled.
Amendment
The IRP does not support amendment of a registered e-invoice. Once an IRN is generated, the invoice data registered on the IRP cannot be edited. Corrections are made through:
- Issuing a credit note (for reductions in value or quantity)
- Issuing a debit note (for increases in value)
- Cancelling the original invoice within the 24-hour window and issuing a corrected invoice with a new number
ERP systems managing e-invoicing workflows must enforce these amendment rules at the billing stage to prevent incorrect invoices from being submitted to the IRP.
How ERP helps manage GST e-invoicing
exactllyERP is designed to support GST e-invoicing workflows for businesses operating above the applicability threshold. Finance teams can use the ERP to:
- Generate invoices in the GSTN-compliant schema format before submission to the IRP
- Connect to the IRP via API or GSP for automated IRN generation and QR code attachment
- Track IRN status, cancellation history, and e-way bill linkage against each invoice
- Auto-populate GSTR-1 data from confirmed e-invoice records, reducing manual return filing work
- Flag invoices that fail IRP validation before they are dispatched to buyers
- Manage bulk IRN generation for high-volume billing cycles
ERP should support the e-invoicing workflow but does not replace tax advice on applicability, exemptions, or specific compliance scenarios. Finance teams responsible for configuring the ERP for e-invoicing should involve their tax advisor in the initial setup, particularly around IRP integration mode, GSP selection, and exception handling for exempt transaction types.
For input tax credit tracking that ties back to e-invoice data, see Basics for Availing the GST Input Tax Credit and Setting Off Input Tax Credit Against Tax Liability Under GST. For TCS compliance that often runs alongside GST invoicing workflows, see Tax Collected at Source on Sale of Goods: A Detailed Guide.
To learn how exactllyERP supports GST e-invoicing and broader compliance workflows, visit the exactllyERP product page.
