E Invoice

What is an E-Invoice?

An e-invoice (electronic invoice) is a standard business-to-business (B2B) billing document that is electronically reported to and authenticated by the central Invoice Registration Portal (IRP) under the Goods and Services Tax (GST) framework in India.

A common misconception is that an e-invoice is an invoice created directly on a government portal or a PDF file sent via email. Under the GST law, an e-invoice is not created by the government. Rather, a business creates an invoice using its regular accounting software or utility tool, and the structured invoice data is submitted electronically to an authorized IRP. The portal validates the data, generates a unique Invoice Reference Number (IRN), digitally signs the payload, and embeds a standardized QR code.

How E-Invoicing Works in India

The e-invoicing workflow follows a structured sequence designed to eliminate data discrepancies and automate reporting between sellers, buyers, and tax authorities:

1. Invoice Creation: The seller creates an invoice with all mandatory GST details (Supplier GSTIN, Buyer GSTIN, HSN codes, taxable values, CGST, SGST, IGST) using invoicing software or utility tools.
2. JSON Generation: The invoice data is formatted into a standardized JSON payload based on the official GST E-Invoice Schema (Schema v1.03).
3. Submission to IRP: The JSON file is transmitted to an authorized Invoice Registration Portal (such as einvoice1.gst.gov.in or authorized IRPs) either through API integration, GSPs (GST Suvidha Providers), or web bulk upload.
4. Validation & IRN Issuance: The IRP checks the payload for schema correctness, validates GSTINs, ensures no duplicate invoice number exists for the financial year, and issues a 64-character alphanumeric hash known as the IRN.
5. Digital Signature & QR Code: The portal signs the invoice data digitally and appends a QR code containing essential transaction details.
6. Data Auto-Population: The authenticated invoice details automatically flow into the seller’s GSTR-1 return and buyer’s GSTR-2B, as well as enabling Part-A of the E-Way Bill when transportation details are supplied.

GST E-Invoice Applicability & Thresholds

The Government of India rolled out e-invoicing in phased stages based on aggregate annual turnover (AATO):

• Phase 1 (Oct 2020): Turnover exceeding ₹500 Crore.
• Phase 2 (Jan 2021): Turnover exceeding ₹100 Crore.
• Phase 3 (Apr 2021): Turnover exceeding ₹50 Crore.
• Phase 4 (Apr 2022): Turnover exceeding ₹20 Crore.
• Phase 5 (Oct 2022): Turnover exceeding ₹10 Crore.
• Phase 6 (Aug 2023 onward): Mandatory for businesses with turnover exceeding ₹5 Crore in any preceding financial year since 2017-18.

What is an IRN (Invoice Reference Number)?

The Invoice Reference Number (IRN) is a 64-character unique alphanumeric hash generated by the IRP using the SHA-256 cryptographic algorithm. The hash is computed from three primary parameters:

• Supplier GSTIN
• Supplier Invoice Number
• Financial Year (e.g. 2024-25)

Because the hash is mathematically bound to these three values, duplicate invoice numbers within the same financial year are instantly flagged by the portal, ensuring ironclad uniqueness and audit trail integrity.

The E-Invoice QR Code

Along with the IRN, the IRP returns a digitally signed QR code string. When printed on the physical or PDF invoice copy, this QR code allows tax officials, logistics personnel, and buyers to verify the authenticity of the invoice using an offline mobile app, even without internet access.

The signed QR code contains key transactional parameters:

• GSTIN of Supplier and Recipient
• Invoice Number and Invoice Date
• Invoice Value and Number of Line Items
• HSN code of the principal item
• Unique Invoice Reference Number (IRN)
• IRP Digital Signature timestamp

E-Invoice JSON Schema

Under the technical standards designed by the GST Council and National Informatics Centre (NIC), every e-invoice submission must adhere to the standardized e-Invoice Schema (Version 1.03). The schema defines mandatory and optional fields arranged across key technical groups:

• TranDtls: Transaction details (Tax scheme, Supply type like B2B, SEZWP, EXPWP, Reverse charge indicator).
• DocDtls: Document details (Document type INV/CRN/DBN, Document Number, Document Date).
• SellerDtls: Supplier legal name, GSTIN, street address, state code, pincode.
• BuyerDtls: Recipient legal name, GSTIN, place of supply, delivery address, state code.
• ItemList: Line items with description, HSN code, quantity, unit price, gross amount, discount, GST tax rates, CGST/SGST/IGST breakdown.
• ValDtls: Cumulative values (Assessable value, CGST value, SGST value, IGST value, Cess, Round off, Total invoice value).

You can use our E-Invoice JSON Generator to create valid payloads or check your existing files using the E-Invoice Validator.

E-Invoice vs GST Invoice vs Normal Invoice

E-Invoice Cancellation & Corrections

Once registered on the IRP, invoices cannot be modified. Taxpayers have specific compliance windows for handling errors:

• 24-Hour Cancellation Window: An IRN can be cancelled on the IRP within 24 hours of generation. Once 24 hours have elapsed, cancellation on the IRP is locked.
• Active E-Way Bill Restriction: If an active E-Way Bill exists for the IRN, the e-way bill must be cancelled first before the e-invoice can be cancelled.
• Post-24-Hour Correction: If an error is noticed after 24 hours, the seller must amend the data in their monthly GSTR-1 return or issue a formal Credit Note (CRN) or Debit Note (DBN) containing its own IRN.
• No Reuse of Invoice Numbers: Once an invoice number has been registered on the IRP (even if subsequently cancelled), the exact same invoice number cannot be reused in the same financial year.

Common E-Invoice Errors & Solutions

• Error 2150 (Duplicate IRN): Occurs when attempting to generate an IRN for an invoice number already registered in that financial year. Solution: Check your records or assign a new unique document sequence.
• Invalid GSTIN / Checksum Mismatch: The recipient or supplier GSTIN does not follow the 15-character statutory format or has an invalid checksum digit. Solution: Verify using our GSTIN Validator.
• Tax Calculation Discrepancies: The assessable value plus taxes does not match the item values or cumulative total invoice value. Solution: Check rounding rules and apply correct tax rates via our GST Calculator.
• State Code Mismatch: Place of supply state code does not match the recipient GSTIN state prefix for intra-state supplies. Solution: Verify state codes (01-38) between POS and GSTIN.

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Frequently Asked Questions