E-Invoicing under GST in 2025: Applicability, Process & Benefits

The Goods and Services Tax (GST) regime in India continues to evolve, and e-invoicing under GST has become one of the most important compliance requirements for businesses. Introduced to ensure transparency and seamless flow of input tax credit, e-invoicing is now mandatory for more categories of taxpayers in 2025.

If you are a business owner, understanding the applicability, process, and benefits of e-invoicing in 2025 is critical to avoid penalties and stay compliant. This guide explains everything you need to know in a clear, step-by-step manner.

What is E-Invoicing under GST?

E-invoicing (Electronic Invoicing) is a system where B2B invoices are electronically authenticated by the GST portal. Instead of generating invoices only in accounting software, businesses must upload invoice details to the Invoice Registration Portal (IRP).

Once validated, the IRP issues:

• A unique Invoice Reference Number (IRN)
• A digitally signed invoice
• A QR code for verification

This ensures all invoices are automatically reported to the GST and e-way bill system, reducing errors and fraud.

E-Invoicing Applicability in 2025

Over the years, the government has gradually lowered the turnover threshold for e-invoicing. As of 2025, the applicability is as follows:

• Businesses with annual turnover of ₹5 crore and above in any financial year from 2017–18 onwards must issue e-invoices.
• Applies to B2B transactions, exports, and supplies to SEZs.
• Not applicable to B2C invoices (though QR code may be required in some cases).

Exemptions from E-Invoicing

Certain categories remain exempt, such as:

• Special Economic Zone (SEZ) units
• Banks, NBFCs, and financial institutions
• Goods transport agencies (GTA)
• Insurance companies

Step-by-Step E-Invoicing Process in 2025

Here’s how businesses can generate and validate e-invoices in India:

Step 1: Generate Invoice in Accounting Software

• Prepare invoice using ERP/accounting software that complies with the e-invoicing schema (JSON format).
• Ensure mandatory fields like GSTIN, invoice value, HSN code, and item details are included.

Step 2: Upload to Invoice Registration Portal (IRP)

• Upload invoice data to the IRP through API integration or via GST Suvidha Provider (GSP).

Step 3: IRP Verification

• IRP validates details, checks for duplication, and generates a unique IRN (Invoice Reference Number).

Step 4: IRP Response

• IRP returns the digitally signed e-invoice along with:
  • IRN
  • QR code
  • Acknowledgment number

Step 5: Auto-population in GST Returns & E-Way Bill

• Validated invoice data is automatically pushed to:
  • GSTR-1 (outward supplies)
  • E-way bill system (if applicable)

This eliminates the need for duplicate data entry and reduces errors.

Key Benefits of E-Invoicing under GST

1. Seamless Input Tax Credit (ITC)
   Since invoices are directly uploaded to GSTN, buyers can claim ITC without disputes.
2. Error-Free Data
   Auto-population reduces manual errors in GSTR-1 and e-way bills.
3. Fraud Prevention
   E-invoicing prevents fake invoices and ensures every invoice has a unique IRN.
4. Faster Compliance
   Simplifies GST returns filing and reconciliation.
5. Global Acceptance
   E-invoicing aligns India’s tax system with global best practices, improving credibility for exporters.

Common Challenges in E-Invoicing

• Technology integration – Small businesses may struggle to integrate ERP/accounting systems with IRP.
• Training staff – Teams must be trained to generate and validate e-invoices correctly.
• Handling amendments – Any mistakes require careful correction through GSTN, not IRP.
• Connectivity issues – Businesses in low-internet areas may face delays.

Penalties for Non-Compliance in 2025

Failure to issue e-invoices when required leads to:

• Invoice treated as invalid – Buyer cannot claim ITC.
• Penalty of ₹10,000 per incorrect invoice or 100% of the tax due, whichever is higher.

Clearly, timely compliance is non-negotiable.

Pro Tips for Smooth E-Invoicing

• Upgrade your ERP/accounting software to match GSTN schema.
• Use APIs or authorized GST Suvidha Providers for integration.
• Train your finance team to avoid last-minute errors.
• Reconcile e-invoices with GSTR-1 regularly.

FAQs on E-Invoicing under GST 2025

Q1. Is e-invoicing mandatory for all businesses in India?

No. As of 2025, it is mandatory only for businesses with annual turnover of ₹5 crore or above.

Q2. Do exporters need e-invoicing?

Yes. Exports are covered under e-invoicing provisions.

Q3. Is e-invoicing applicable for B2C invoices?

No, but businesses above ₹500 crore turnover must include a dynamic QR code on B2C invoices.

Q4. Can I generate e-invoices directly from the GST portal?

No. Invoices must be generated in accounting software and uploaded to the IRP.

Q5. How does e-invoicing affect GST returns?

Once validated, invoice details automatically flow into GSTR-1 and the e-way bill system, simplifying compliance.

Conclusion: Stay GST-Compliant with India Company Setup

E-invoicing under GST is no longer optional—it’s a mandatory compliance requirement for businesses in 2025. While it may seem complex initially, with the right systems in place, it ensures faster compliance, better transparency, and stronger business credibility.

At India Company Setup, we help businesses with:

• GST registration and compliance
• E-invoicing implementation and integration
• GST return filing and reconciliation
• Expert advisory for smooth compliance

Don’t risk penalties or ITC loss. Contact us today! Call 9915731447 today and let our experts handle your GST compliance and e-invoicing needs while you focus on growing your business.