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

What is E-Invoicing Under GST?

E-invoicing and e-way bill compliance are important parts of GST compliance for eligible businesses. Businesses should regularly review applicable turnover thresholds, reporting timelines, invoice details, and transportation documentation to avoid compliance gaps. Maintaining an accurate digital workflow can also make GST reconciliation and record management more efficient.

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.