Date of implementing e-invoicing in GST

|Updated on: February 25, 2022

A game-changer into the world of invoicing to ensure interoperability of the data with various systems and curb tax evasion was proposed to be brought up during the beginning of the new financial year 1st April 2020. However, the need was felt to allow businesses to get used to the new system of e-invoice and as a result, the date of implementing the e-invoice was pushed to 1st October 2020 for businesses with a turnover of 500 crores and above.

Since then, e-invoicing is being implemented in a phased manner. With the latest update, e-invoicing is mandatory for businesses with a turnover of 20 crores and above from 1st April,2022

The e-invoice system with a standardized protocol, powered by information technology, will enable machines to read electronic invoices. To give a brief, e-invoicing is a system in which B2B invoices are authenticated electronically by Invoice Register Portal (IRP)

Best e-Invoicing Software Solution for Businesses in India How e-invoice system works

The concept of e-invoice begins with the validation of invoice data uploaded by the taxpayer and issuing a unique identification number called 'Invoice Registration Number (IRN)' for every invoice being uploaded into the system. A QR code is tagged against every invoice for further use by various Government portals, tax officials and taxpayers.

Date of implementing e-invoicing in GST

The GST Council has approved the introduction of e-invoicing in a phased manner for reporting of business–to–business (B2B) invoices to the GST System. This will be introduced based on turnover criteria as detailed below:

Annual turnover

New date of mandatory implementation of e-invoice

500 Crore & above

1st October, 2020

100 Crore up to 500 crore

1st January,2021

50 Crore up to 100 crore

1st April,2021

20 Crore and above*

1st April,2022

*The date of e-invoicing implementation is updated as per the latest e-invoicing  notification

As mentioned in the above table, the e-invoicing system is already in place for larger businesses with a turnover up to 500 crores from 1st October, 2020. The mandatory implementation of an e-invoicing system for all businesses with a turnover of 50 crores and above was from 1st April,2021. 

With the latest e-invoice notification, the new date for e-invoice implementation is issued for businesses with a turnover above 20 Crore and above. These businesses are required to implement e-invoicing from 1st April 2021. 

The Government has considered only the largest businesses to start with the e-invoice system and gradually, in a phased manner, more businesses are brought into the scope by reducing the turnover limit. 

Business preparedness for e-Invoicing in GST

The e-invoicing functioning will depend on how well the accounting software or ERP system interacts with the IRP system. This is because an invoice is valid only if it contains an IRN and QR code which is authenticated by the IRP system.

As a business, for you to sail smoothly, the accounting software you use should have a built-in capability to generate e-invoice data in the prescribed format and more importantly, seamlessly interacts with the IRP portal to complete the e-invoice process without the manual intervention. 

With e-invoicing being introduced, the first step towards preparedness is to understand the e-invoice fundamentals and get used to the system. Secondly, need to consider accounting software which will not only generate the e-invoice data but also has an online capability to interact with the IRP system to generate e-invoice.

Watch video on e-invoicing in TallyPrime

Know more about e-invoices in GST

e-invoicing Software e-Invoice in GST
GST Invoice How to Generate E-Invoice in GST
How to Transit to e-Invoice System Invoice Reference Number (IRN)
Who Should Issue an e-Invoice in GST Generate e-Invoice Instantly in TallyPrime
How to Generate Bulk e-Invoice in TallyPrime Working of e-Invoice System


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