Invoking Under GST: An Entire Guide 2025

GST has brought changes in the manner of invoices and taxation compliance in India. In 2025, it is important to know how electronic invoicing operates, what legal requirements it implies, and what business impacts it has, in order to be GST compliant, to reduce the number of errors in the accounting process, and to make the best out of the government digitalization plans.

This guide explains the e invoicing regulations that are established under GST, why they are important, who is required to issue e invoices, the typical difficulties businesses are facing, and how to generate a valid GST e-invoice, and how e invoicing will play a role in the daily operations and overall changes in the industry. This is practical and current with GST notifications that are up to March 2025.

What is E Invoicing under GST and why it is introduced?

E invoicing in GST refers to electronic invoicing, which is a non-paper-based way of creating, reporting and using B2B invoices on the GST portal. The difference between traditional invoicing and the GST e invoicing is that instead of businesses sending in paper bills or manually created PDFs, they are now generating standardized invoices that are reported to a central government system in real-time.

The main goal is to standardize the invoice process, make tax administration more efficient, prevent fake invoices, and ensure seamless flow of Input Tax Credit (ITC). The process begins in October 2020 with big businesses and by April 2025, many small and medium businesses are also included in the process.

You did not know?

As per the latest circular released by the GST Council, B2B transactions will require e invoices to be issued by the companies with an annual turnover of INR 5 crore or more by the year 2025.

People also question

Why should there be e invoicing under GST?

E invoicing prevents tax fraud and only valid invoices are reported, and the tax processes are automated so that they are easy to comply with.

What is E Invoicing and How Does it work under Indian GST Law in 2025?

E invoicing works through a government-designated platform called the Invoice Registration Portal (IRP), which validates and generates a unique Invoice Reference Number (IRN) for each electronic invoice.

How does one go about creating a GST e invoice?

• Supplier creates the invoice in their accounting or billing software in the notified schema (JSON format).
• Invoice data is transmitted directly or through a GST Suvidha Provider (GSP) to the IRP.
• The invoice is verified by RP and the IRN is generated and the e invoice digitally signed.
• The signed e invoice, QR code and IRN are returned to the supplier by RP.
• The e invoice is automatically pushed to the GST portal for auto-population in GST returns (GSTR 1).

Overview of GST E Invoicing 2025

• On-the-fly invoices reporting.
• Government digital authentication
• Smooth transition of ITC claiming on the part of buyers.
• Automation of GST returns
• Portal to track invoices in a centralised way.
• The verification of every e invoice using QR code.

You did not know?

In FY 2024-25, there are more than 90 crore e invoices in India as per GST Network analytics.

People also question

Is it possible to send both manual and e invoices in a business?

No. When a business becomes eligible to mandatory e invoicing, all B2B invoices have to be issued using the IRP.

What Are the Businesses That Need to Use E Invoicing in GST in 2025?

According to the recent regulations:

• Businesses with aggregate turnover above Rs 5 crore (in any preceding year from 2017-18 onwards) must issue e invoices for B2B and export transactions.
• Smaller businesses are not required to do voluntary adoption, but it is possible.
• Exceptions: Currently, the financial services, SEZ units, transporters of goods, and NBFCs are exempted.

First hand experience

When a mid-sized manufacturing company reached a turnover of Rs 6 crore in 2024, it shifted to e invoicing, which prompted it to integrate its ERP with a GSP, which reduced manual work by 50 percent.

Advantages and Disadvantages of E invoicing under GST

Pros

• It prevents the generation of fake invoices and fraud.
• Enhances the accuracy of taxes reporting and input credit.
• Removes manual entry and reconciliation that is time consuming.
• Accelerates discounting of invoices through online markets

Cons

• The start-up and software compatibility.
• Training of employees on new digital procedures.
• Uninterrupted access to the systems and the internet.
• Risk of confusion because of the frequent changes in regulations.

You did not know?

GST experts recommend that companies should compare e invoicing software across various online market places to find the best deal and service instead of using the existing ERP vendors.

People also question

Is there any penalty in case of failing to create a GST e invoice?

Yes. No e invoice implies the invoice is not taken as valid and this impacts ITC of the buyers and imposes a fine of Rs 10, 000 per case.

Step by Step Process of Creating an E Invoice under GST with example

• Invoice information should be entered in your accounting package on GST schema.
• Log in to your registered GSP, ASP, or use the government free offline tool.
• Upload invoice JSON to the IRP (either via API or file upload).
• Get the digitally signed invoice and IRN of the IRP immediately.
• The QR code and IRN on the PDF invoice sent to your customer should be printed.
• These invoices should be prefilled in GSTR 1 at month end.

Example

Company ABC Pvt Ltd issues an invoice to XYZ Ltd in amount of Rs 1,00,000 plus GST. Once data is uploaded to the IRP and the IRN generated, QR code, and signed invoice are provided, QR code is shared with XYZ Ltd. The QR code on the invoice will make it possible to validate it instantly.

The main advantages pointed out

• Reduce the processing time by two thirds
• Gets rid of the GST matching error
• QR code gives credence

What are the Common Errors and Issues that Businesses Encounter with regards to E Invoicing Implementation?

• Inability to renew back-end information technology and enterprise resource planning systems.
• Inaccurate invoice information that causes the rejection of IRP.
• Lag in learning about the changes in e invoicing turnover threshold.
• Lack of awareness on the use of GSPs approved by the government.
• Staff training on new invoice schema or procedure is not done.

What to do to overcome them?

• Eligible distributors of GST
• Conduct in-house training of GST teams on a regular basis.
• Be alert to the notifications of GST Council
• Nothing should go live until it is tested.

You did not know?

The same survey of businesses conducted in 2025 revealed that a 40 percent reduction in the number of GST returns errors is achieved when companies use cloud-based e invoicing solutions compared to manual systems.

People also question

Does e invoicing software exist that is free to small businesses?

Yes. The portal of GSTN offers a free e invoicing system to all registered taxpayers.

What is the benefit of e invoicing to both buyers and sellers in 2025?

• It minimizes mismatch in ITC reconciliation as invoices pass through to GSTR 1 and GSTR 2A.
• Enables buyers to verify the genuineness of vendor bills on the spot and prevent making inadmissible claims of ITC.
• There are fewer queries by buyers to sellers regarding GST compliance.
• e Way Bill auto-filing is also made possible by the e invoice data in the case of logistics.

First hand knowledge

Our team is now saving 60 percent of their time in matching and reconciling the purchase and sales ledger since switching to e invoicing.

What is the difference between e invoice and regular invoice under GST?

You were not aware of it?

Key differences

• The e-invoicing is electronic, real-time, and authenticated by the government.
• Normal GST invoices require manual reporting at months end.

You did not know?

Any GST e invoice can be scanned via QR code by the buyers to check the validity of the invoice on the IRP in real time to get the peace of mind.

People also question

Is e invoicing restricted to B2B transactions only?

By 2025, it is mandatory to use e invoicing under GST only in case of B2B and export, but not B2C.

What are the Software or Tools That Can Assist Businesses with GST E Invoicing?

The following are the most popular business choices:

• Free invoice generation portal of the Government
• GSP or ASP solutions (like ClearGST, Zoho, Tally, Marg ERP, Busy, RazorpayX)
• Custom plug-ins of ERP to SAP, Oracle or Microsoft Dynamics

Online marketplaces are used to compare features and support of various brands of GST e invoicing software. The choice can be made based on your business needs, budget, and the integration preferences.

First person material

We tested two of the most popular e invoicing tools on IndiaMart and CompareERP. In the after side-by-side comparison, we discovered that one of them provided instant support on WhatsApp, whereas one had superior analytics. This assisted us in making a better decision.

Top tip

Select a solution that will allow both API and batch upload to facilitate times when there is high volume of invoices to be uploaded.

what is the future of E Invoicing in India after 2025?

• The GST council can also lower the turnover limit to include more MSMEs.
• Coverage to B2C invoices could be viewed as a way of reducing misuse.
• There will be more automation of e invoicing, e Way Bills, and e filing.
• India is already leading the world with its well established Invoice Reference Number system.

You did not know?

India is the first country to introduce e invoicing whose model has been implemented in many other countries such as the UAE and Saudi Arabia that have also introduced their own GST.

Quick Recap (TL;DR)

• Under GST, the invoicing of B2B businesses will be done through digital reporting via a government portal, which will be mandatory in 2025 by businesses with a turnover of Rs 5 crore and above.
• All invoices that fall under this category are supposed to be generated, authenticated, and printed with an IRN and QR code.
• It saves time, minimizes errors, and simplifies ITC claims, yet it has to be well integrated and training provided to the staff.
• The online marketplaces are the best place to compare GST e invoicing software that is appropriate to your business.
• Keep abreast of GST notifications, educate employees and test the flow of invoices before working on a massive scale.

E FAQs E Invoicing GST 2025

What is the e invoice portal of GST in India?

The government provides invoice registration through Invoice Registration Portals (IRPs) such as einvoice1.gst.gov.in.

Is it possible to offer a cancellation of an e invoice after generating the IRN?

Yes. Within 24 hours of the IRN generation, an e invoice can be cancelled. Once that is done, it will not be able to be cancelled on the IRP.

Does every invoice require QR code and IRN?

Yes. Under B2B e invoices in GST covered turnover, QR code and IRN are compulsory to make the invoice valid.

Will e invoicing be made a requirement on smaller turnover businesses?

Maybe. The GST Council is looking to change the turnover limits, which is an indication that a phased implementation is coming and those below Rs 5 crore turnover should be ready.

And under GST does e invoicing imply no more GSTR 1 filing?

Not yet. With E invoicing, GSTR 1 is auto-populated but you still have to review and file returns as before.

How do I get a list of government approved GST e invoicing software?

Visit the GSTN portal or the reputable online marketplaces to see and consider the e invoicing solution providers.

Sources:

• Authorized GST e Invoice Portal
• Website of GST Council
• BIC e Invoicing, BIC e Invoicing
• Comparison of e Invoicing Solutions on IndiaMart