E-Invoicing & E-Way Bill Compliance : Complete GST Rules, Workflow & Penalties

What is E-Invoicing Under GST?

E-Invoicing (Electronic Invoicing) is a system where B2B invoices, credit notes, and debit notes are electronically authenticated through the GST Network’s Invoice Registration Portal (IRP). Once uploaded, the IRP validates the invoice and generates a unique Invoice Reference Number (IRN) along with a digitally-signed QR code.

Applicability & Turnover Thresholds

• Mandatory for businesses with aggregate turnover above ₹5 crore in any financial year since 2017-18 (PAN-based, across all GSTINs).
  
  

• Time limit for reporting:
  
  

• Businesses with turnover above ₹10 crore → must report e-invoices within 30 days of invoice date (effective from 01/04/2025).
  
  

Exemptions from E-Invoicing

E-invoicing is not applicable to:

• SEZ units
  
  

• Insurers, banks, NBFCs, and financial institutions
  
  

• GTA (Goods Transport Agency)
  
  

• Passenger transport service providers
  
  

• Government departments & local authorities
  
  

• Multiplex cinema exhibitors
  
  

• OIDAR service providers (e.g., Facebook Ads, Netflix)
  
  

How Does E-Invoicing Work? (Workflow)

1. Generate invoice via ERP/accounting software in the prescribed format.
   
   

2. Upload single/bulk invoices (JSON file) to IRP.
   
   

3. IRP validates → issues IRN & QR code, digitally signs.
   
   

4. Returns e-invoice to supplier, buyer, and GST portal.
   
   

Cancellation & Time Limits

• Cancellation allowed only within 24 hours of IRN generation on the IRP.
  
  

• After 24 hours → cannot cancel on GST portal.
  
  

• To correct errors post 24 hours → issue credit/debit note or amend in GSTR-1.
  
  

Penalties for Non-Compliance

• ₹10,000 per invoice OR 100% of tax due (whichever is higher) for failure to generate IRN.
  
  

• ₹25,000 penalty for incorrect e-invoices (missing QR code/mandatory fields).
  
  

• Buyer cannot claim Input Tax Credit (ITC) if e-invoice is not generated.
  
  

FAQs on E-Invoicing

Q1: Who must generate e-invoices?
      Businesses with turnover above ₹5 crore.

Q2: Is e-invoicing applicable to B2C transactions?
        No, only for B2B and exports.

Q3: Is e-invoicing mandatory for exports?
      Yes, if turnover exceeds the threshold.

Q4: Can I amend an e-invoice?
      No. Only cancellation & re-issuance is allowed.

What is an E-Way Bill?

An E-Way Bill (EWB) is a mandatory electronic document for the transportation of goods valued above ₹50,000. It contains details of consignor, consignee, goods, transporter, vehicle, and route, generated through the official GST portal.

Structure of an E-Way Bill

1. Part A – Consignment Details
   
   

• GSTIN of supplier & recipient
  
  

• Dispatch & delivery locations
  
  

• Invoice/Challan details
  
  

• Value of goods
  
  

• HSN Code
  
  

• Reason for transportation
  
  

2. Part B – Transport Details
   
   

• Vehicle number
  
  

• Transporter ID
  
  

• Mode of transport (road, rail, air, ship)
  
  

When is an E-Way Bill Required?

An EWB is required when:

• Goods worth above ₹50,000 move due to supply, reasons other than supply, or inward supply from an unregistered person.
  
  

• Information must be furnished in Form GST EWB-01 before movement begins.
  
  

Who Should Generate the E-Way Bill?

Exemptions from E-Way Bill

No EWB required for:

• Goods transported via non-motorized vehicles
  
  

• Goods under customs supervision or transit to/from Nepal/Bhutan
  
  

• Empty cargo containers, defence consignments, weighbridge transfers up to 20 km
  
  

• State-specific exemptions (agricultural produce, milk, salt, etc.)
  
  

• Non-GST goods (alcohol, petrol, diesel, ATF, natural gas)
  
  

Validity of an E-Way Bill

Penalties for Non-Compliance

• Non-generation/expired EWB = same penalty as no EWB.
  
  

• Penalty: ₹10,000 or 100% of tax due (whichever is higher).
  
  

• Vehicles & goods can be detained until a penalty is paid.
  
  

• Authorities use FASTag & toll data to track fraud.
  
  

Cancellation & Corrections

• Cancellation allowed within 24 hours before verification.
  
  

• Receivers can reject EWB within 24–72 hours.
  
  

• Corrections not permitted after generation.
  
  

FAQs on E-Way Bill

Q1: Is EWB required for intra-state movement?
      Yes, if consignment value exceeds ₹50,000.

Q2: Is EWB needed for stock transfers between branches?
      Yes, EWB is mandatory.

Q3: What if the vehicle breaks down?
      Generate a new EWB to continue movement.

Q4: Can an EWB be extended?
      Yes, online extension is possible before expiry.

Q5: What if EWB expires during transit?
        Goods may be detained & penalties imposed.