E-invoicing (electronic invoicing) is a system where B2B invoices are authenticated electronically by the GST Network (GSTN) through the Invoice Registration Portal (IRP). It's not about generating invoices online — it's about reporting them to a central system for validation.
What is E-Invoicing?
Under e-invoicing, businesses generate invoices on their own systems (like BillCraft) and then report certain details to the Invoice Registration Portal (IRP). The IRP validates the invoice and returns:
- IRN (Invoice Reference Number): A unique 64-character hash for each invoice
- QR Code: Contains key invoice details for verification
- Digital Signature: Authentication by the IRP
Who Needs E-Invoicing?
E-invoicing is mandatory for businesses whose aggregate turnover exceeds the prescribed threshold in any financial year since 2017-18.
| Turnover Threshold | Applicable From |
|---|---|
| Above ₹500 Crore | October 1, 2020 |
| Above ₹100 Crore | January 1, 2021 |
| Above ₹50 Crore | April 1, 2021 |
| Above ₹20 Crore | April 1, 2022 |
| Above ₹10 Crore | October 1, 2022 |
| Above ₹5 Crore | August 1, 2023 |
Note for Small Businesses
If your turnover is below ₹5 Crore, e-invoicing is currently not mandatory for you. However, the threshold may be lowered further. It's good to be prepared.
How Does E-Invoicing Work?
- Generate invoice — Create your invoice on your billing software (e.g., BillCraft)
- Report to IRP — Send invoice data in JSON format to the Invoice Registration Portal
- IRP validates — The portal checks for errors, duplicates, and assigns an IRN
- Receive IRN + QR — The IRP returns the IRN, QR code, and digitally signed invoice
- Share with buyer — The validated invoice (with IRN and QR) is shared with the buyer
- Auto-populated returns — Invoice details are automatically populated in GSTR-1
Benefits of E-Invoicing
- Reduced errors: Standardized format minimizes data entry mistakes
- Faster ITC: Buyers get real-time invoice data for Input Tax Credit
- Auto GSTR-1: Invoice details auto-populate in GST returns
- Reduced fraud: Each invoice gets a unique IRN, preventing duplication
- Interoperability: Standard format works across all accounting systems
E-Invoicing vs Regular Invoicing
| Feature | Regular Invoice | E-Invoice |
|---|---|---|
| Format | Any format | Standardized JSON schema |
| Validation | Self-validated | Validated by IRP |
| IRN | No | Yes (unique 64-char hash) |
| QR Code | Optional | Mandatory |
| GSTR-1 filing | Manual entry | Auto-populated |
Documents Covered Under E-Invoicing
- B2B Invoices
- B2B Credit Notes
- B2B Debit Notes
- Export Invoices
Not covered: B2C invoices, delivery challans, bill of supply, and job work invoices.
Penalties for Non-Compliance
- 100% of tax due or ₹10,000 — whichever is higher — for each non-compliant invoice
- Buyer cannot claim ITC on invoices without valid IRN
- E-way bills cannot be generated without valid e-invoices
How BillCraft Can Help
While BillCraft is primarily designed for small businesses below the e-invoicing threshold, it generates invoices in a format that's ready for e-invoicing integration. As the threshold lowers, we plan to add direct IRP integration.
For now, BillCraft helps you create professional, GST-compliant invoices that include all the fields required for e-invoicing — so you're always prepared.