What’s Changing in GST E-Invoicing from April 2025?

Introduction

Starting April 1, 2025, significant changes will be implemented in the GST e-invoicing system via the e-invoice portal. These changes aim to enhance compliance, reduce fraudulent practices, and ensure timely reporting of invoices. One of the major modifications includes the mandatory adoption of Two-Factor Authentication (2FA) for all taxpayers. Additionally, businesses with an Annual Aggregate Turnover (AATO) of ₹10 crore or more must report e-invoices within 30 days of issuance, a significant shift from the previous threshold of ₹100 crore. These new regulations will impact a large number of businesses across India.

Compulsory Two-Factor Authentication (2FA) on the E-Invoice Portal

To strengthen security measures, the government has made Two-Factor Authentication (2FA) mandatory on the e-invoice portal. This requirement applies to both e-invoice generation and e-way bill creation. Regardless of the taxpayer’s turnover, 2FA will now be a compulsory step for all users logging into the portal. This move is expected to significantly reduce unauthorized access and fraudulent activities related to GST invoices.

History of E-Invoicing

E-invoicing was first introduced in India as part of the GST framework to enhance tax compliance and transparency. The GST Council approved the e-invoice standard during its 37th meeting on September 20, 2019. It was rolled out in phases:

• October 2020: Applicable to taxpayers with an AATO exceeding ₹500 crore.
• January 2021: Extended to businesses with an AATO between ₹100 crore and ₹500 crore.
• April 2025: The threshold is being reduced to ₹10 crore, affecting many small and medium-sized enterprises (SMEs).

The phased implementation allowed businesses to adapt gradually while the government refined the process based on feedback from different sectors.

Documents and Exemptions Available on the E-Invoice Portal

The e-invoice portal mandates the reporting of the following documents:

• GST invoices
• Credit notes
• Debit notes

These apply to Business-to-Business (B2B) transactions and exports. However, certain businesses and transactions remain exempt from e-invoicing, including:

• Special Economic Zone (SEZ) units
• Insurance and banking sectors
• Goods and passenger transportation agencies
• Non-Banking Financial Companies (NBFCs)
• Multiplex cinema admissions

These exemptions are designed to simplify the compliance burden on specific industries that operate under different regulatory frameworks.

E-Invoicing Process

The process of e-invoicing involves multiple steps to ensure compliance:

1. Invoice Generation: The taxpayer generates an invoice using their ERP or accounting software.
2. Reporting to the Invoice Registration Portal (IRP): The invoice details are uploaded to the IRP for authentication.
3. IRP Validation & IRN Generation: The IRP verifies the invoice and assigns a Unique Invoice Reference Number (IRN) along with a QR code.
4. Signed E-Invoice Return: The validated e-invoice is returned to the taxpayer, and it becomes legally valid for GST compliance.

Failure to adhere to these steps within the new 30-day deadline will result in automatic rejection of invoices, leading to penalties and potential financial complications.

Available Tools for E-Invoicing

To facilitate the transition to mandatory e-invoicing, several tools and resources are available:

• API Integration: Businesses can integrate their ERP systems with the e-invoice portal via APIs.
• Mobile App: Allows for e-invoice generation on the go.
• GST E-Invoice Preparing and Printing (GePP) Tool: Enables businesses to prepare and print invoices in compliance with GST regulations.
• Bulk Upload Tool: Facilitates large-scale invoice reporting for enterprises handling high volumes of transactions.

These tools aim to simplify the e-invoicing process, ensuring compliance with minimal manual effort.

Conclusion

The upcoming GST e-invoicing changes, effective from April 1, 2025, are a significant step towards enhancing tax compliance and reducing fraudulent invoicing practices. The lowered AATO threshold will bring many SMEs under the e-invoicing framework, requiring them to adapt to digital invoicing within a stringent timeline. Additionally, the introduction of mandatory 2FA will further enhance security and prevent unauthorized access to the e-invoice portal. Businesses must prepare for these changes by upgrading their accounting systems, training their finance teams, and ensuring timely compliance with the new rules.

Disclaimer

This article is for informational and educational purposes only. It does not constitute legal, tax, or financial advice. Readers are advised to consult professional tax advisors or refer to official GST notifications for specific guidance regarding e-invoicing compliance.