Definition
E-Invoicing (GST)
E-invoicing is the system under which businesses above a turnover threshold must report B2B invoices to a government portal, which validates them and issues a unique reference number.
Under e-invoicing, an invoice is not abolished but standardised: the seller's software reports invoice data to the Invoice Registration Portal, which returns a unique Invoice Reference Number and a QR code. Only validated invoices are legally recognised for input tax credit and e-way bills.
The system auto-populates parts of GST returns from the validated invoices, reducing manual data entry and reconciliation errors. By moving the reporting threshold progressively lower, the government has steadily widened the net of businesses that must e-invoice, tightening compliance and curbing fake-invoice fraud.
Related terms
- GSTR-1GSTR-1 is the GST return in which a registered taxpayer reports the details of all outward supplies, or sales, made during a period.
- Input Tax Credit (ITC)Input Tax Credit lets a GST-registered business offset the tax it has already paid on purchases against the GST it collects on sales, so tax is levied only on value added.
- E-Way BillAn e-way bill is an electronic document required for the movement of goods above a specified value, generated on the GST portal before transport begins.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.