Yes, an e-invoice (or more accurately, an e-credit note/e-debit note) is mandatory for purchase returns under GST if the supplier is required to generate e-invoices. As per GSTHero and Goods and Services Tax Network, all documents like credit notes and debit notes, which are used to account for returns, must have a unique Invoice Reference Number (IRN) generated via the IRP, provided the supplier's aggregate turnover exceeds the ₹5 crore threshold.
As per the latest amendment in August 2023, all the businesses registered under the GST Act, with a total turnover exceeding Rs. 5 crores, are required to generate an e-invoice.
It is a digital system where invoices are generated electronically and submitted to the Invoice Registration Portal (IRP) for authentication and recording. It helps businesses reduce manual errors and simplify GST return filing.
E-Invoice Exemption for Small Traders
The government has announced an exemption from e-invoice requirements for small traders with annual sales below RM150,000. This move benefits over 700,000 small traders, including hawkers, who will no longer need to issue e-invoices.
Goods Return under GST
When a registered buyer returns goods, the seller has to issue a credit note for those returned items. This credit note must be reported in the seller's GSTR-1 for the same month in which it is issued.
This system, mandatory for businesses with turnovers exceeding ₹5 crore, reduces errors, automates return filing, and enhances tax compliance. E-invoicing under the Goods and Services Tax (GST) regime has revolutionized the way businesses manage their invoicing processes.
What is the new 3-year filing rule? Starting from December 1, 2025, the GST portal will bar taxpayers from filing any return that is more than three years past its original due date. This means November 2025 is the last chance to file returns for periods like October 2022 or the FY 2020-21 annual return.
According to Rule 48(4), the following classes of people are exempt from the e-invoice mandate and need not generate an e-invoice under GST. Banks, Insurance Companies, and Financial Institutions including but not limited to NBFCs. Supplier of Services by way of admission to the exhibition of films.
Yes, as e-invoicing is mandated for specified registered persons to other 'registered persons', both the GSTINs of supplier and recipient shall be active in GST System, as on the date of document being reported.
Under this law, large taxpayers and exporters were required to issue e-invoices and transmit sales data to the Bureau of Internal Revenue (BIR) within five years.
Electronic Invoicing in United States
E-invoicing is not mandatory in the United States, which follows a post-audit invoicing model.
'e-invoicing' means reporting details of specified GST documents to a Government-notified portal and obtaining a reference number. It doesn't mean generation of invoice by a Government portal. Taxpayers will continue to create their GST invoices on their own Accounting/Billing/ERP Systems.
CGST Rule 42 deals with the reversal of ITC on inputs and input services, whereas rule 43 deals with the reversal of ITC on capital goods.
Two specific monetary penalties can be levied for e-invoicing non-compliance: Penalty for not generating an e-invoice: 100% of the tax amount or Rs 10,000 per invoice, whichever is higher. Penalty for incorrect e-invoicing particulars: flat Rs 25,000 per invoice.
e-Invoice Time Limit: From April 1, 2025, businesses with an Annual Aggregate Turnover (AATO) of Rs. 10 crore+ must upload e-invoices to the Invoice Registration Portal (IRP) within 30 days. It reduces the chances of fake GST invoices, allowing only genuine input tax credit claims.
E-Invoicing is now mandatory for all businesses with 5 cr+ turnover. E-Invoicing applies to Business-to-Business (B2B) transactions, including exports. Certain entities like SEZs, Insurance companies, and banks are exempt from E-Invoicing.
As there is no federal mandate for e-Invoicing, there are currently no specific penalties for non-compliance. However, in states where e-Invoicing is required for B2G transactions, failure to comply could result in delays in payment or rejection of invoices.
The e-invoice generation time limit defines the maximum period between the invoice date and the time it is reported on the Invoice Registration Portal (IRP) to generate an Invoice Reference Number (IRN). Under the current guidelines, users must upload invoices within 30 days from the invoice date.
If the taxpayer's annual turnover or revenue subsequently reached / exceeded RM1 million in YA2026 onwards, the taxpayer is required to implement e-Invoice starting from 1 January in the second year following the YA in which the total annual turnover or revenue reaches RM1 million.
The following category of tax persons are exempted from payment of 1% of GST in Cash 1. Registered taxpayers who have paid income tax above Rs 1.00 in Income Tax during the last two years continuously 2. Taxpayers who have zero-rated supplies without payment of duty and claimed refund of more than Rs 1.00 lac 3.
An e-invoice mandate is a regulatory requirement imposed by a government or a governing body that mandates electronic invoicing systems for businesses. It specifies that businesses must generate, transmit, and/or receive invoices in electronic format instead of traditional paper-based invoices and PDFs.
“Bill of supply” is not covered under the e- Invoice system. Although Credit & Debit notes are also covered, for ease of reference and understanding, the system is referred as „e-invoicing‟.
Yes, every GST-registered taxpayer whose annual turnover is more than Rs.2 crore must file GSTR-9 annually. It is optional for the rest of the taxpayers. Is GSTR 9 mandatory for less than Rs.2 crore? No, the department made GSTR-9 optional for businesses with less than Rs.2 crore to ease the compliance burden.
If you are registered for GST/HST, you must file a GST/HST return for each reporting period.
Starting September 22, 2025, GST in India will be simplified to primarily two rates: 5% and 18%, with a special 40% rate on luxury and sin goods like tobacco and high-end vehicles.