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GST Compliance Series | June 2026
E-invoicing under GST is no longer a compliance requirement for only large corporations. With the threshold now at Rs. 5 crore in aggregate turnover, it applies to a very large segment of Indian businesses. This article explains exactly who must comply, how the threshold is calculated, which transactions are covered, the separate 30-day reporting rule for larger businesses, and what happens if you get it wrong.
Table of Contents
- 2-Minute Snapshot
- What is E-Invoicing Under GST?
- The Rs. 5 Crore Threshold: Notification No. 10/2023How the threshold dropped in phases since 2020
- How Aggregate Annual Turnover is Calculated
- Which Transactions Require an E-Invoice
- Who is Exempt from E-Invoicing
- How the E-Invoice Process WorksIRP, IRN, and QR code generation
- The 30-Day Reporting Rule for Rs. 10 Crore+ Businesses
- Consequences of Not Generating a Valid E-Invoice
- Practical Compliance Checklist
- Frequently Asked Questions
Rs. 5 Crore
Current aggregate turnover threshold for mandatory e-invoicing, effective 1st August 2023 under Notification No. 10/2023-Central Tax.
30 Days
Reporting time limit to the IRP for businesses with AATO of Rs. 10 crore or more, effective 1st April 2025.
2017-18
The threshold is tested against turnover in any financial year from 2017-18 onwards, not just the current year.
Rule 48(4)
The CGST Rule that mandates e-invoice generation and makes a non-compliant invoice invalid for claiming input tax credit.
SnapshotE-Invoicing in 2 Minutes
Think of e-invoicing as a government stamp of approval on your business invoice, given in real time. You generate an invoice on your own billing software as usual. But before you hand it to your customer, you must send the invoice details to a government portal called the Invoice Registration Portal (IRP). The IRP checks the details, assigns a unique number called the Invoice Reference Number (IRN), and gives back a QR code. Only after this happens is your invoice considered valid under GST law.
Here is why this matters in practice. Suppose Ramesh runs a manufacturing business with Rs. 6 crore annual turnover. He sells goods worth Rs. 5 lakh to another registered business. If he issues a normal invoice without generating an IRN, that invoice has no legal standing under GST. His buyer cannot claim input tax credit on it. Ramesh is exposed to penalty. The fix is simple: Ramesh’s billing software sends the invoice to the IRP, gets the IRN and QR code back within seconds, and only then does he print and hand over the invoice.
Why the government introduced this: E-invoicing was designed to curb fake invoicing and fraudulent input tax credit claims. By validating every B2B invoice in real time through a central portal, transactions become traceable, and inflated or non-existent transactions used to claim ITC become very difficult to hide.
Part IWhat is E-Invoicing Under GST?
A common misconception is that e-invoicing means creating an invoice in a special government format, like a PDF, and emailing it to the customer. That is not correct. E-invoicing is the process of reporting your B2B invoice details to the GST authority through the Invoice Registration Portal and receiving back a unique Invoice Reference Number to validate the invoice.
You continue generating invoices on your own accounting or billing software in your own format. The only change is that before the invoice reaches your customer, its details must be electronically authenticated by the IRP.
Once the IRP validates the invoice, it returns:
- Invoice Reference Number (IRN): A unique 64-character hash string generated for every reported invoice, used to authenticate the invoice and prevent duplication. The IRN is different from your regular invoice number.
- QR Code: A digitally signed QR code containing key invoice details, which must appear on the invoice copy given to the buyer.
- Digitally Signed JSON: The validated invoice data in a structured format, which your software uses to print the final invoice and which also auto-populates your GST returns.
Part IIThe Rs. 5 Crore Threshold: Notification No. 10/2023
The government did not apply e-invoicing to all businesses at once. It was rolled out in phases, starting with the largest businesses and gradually covering smaller ones.
| Effective Date | Turnover Threshold | Notification |
|---|---|---|
| 1st October 2020 | Above Rs. 500 crore | Notification No. 61/2020-Central Tax |
| 1st January 2021 | Above Rs. 100 crore | Notification No. 88/2020-Central Tax |
| 1st April 2021 | Above Rs. 50 crore | Notification No. 05/2021-Central Tax |
| 1st April 2022 | Above Rs. 20 crore | Notification No. 01/2022-Central Tax |
| 1st October 2022 | Above Rs. 10 crore | Notification No. 17/2022-Central Tax |
| 1st August 2023 | Above Rs. 5 crore | Notification No. 10/2023-Central Tax dated 10th May 2023 |
The current and applicable threshold is Rs. 5 crore, effective from 1st August 2023, as notified under Notification No. 10/2023-Central Tax dated 10th May 2023. This notification amended the original e-invoicing notification, Notification No. 13/2020-Central Tax dated 21st March 2020, by substituting “ten crore rupees” with “five crore rupees” in the principal notification.
This is the underlying legal mechanism: Rule 48(4) of the CGST Rules, 2017 empowers the Government to notify a class of registered persons who must prepare e-invoices. The Government exercises this power through periodic notifications under Notification No. 13/2020-Central Tax, which has been amended multiple times to progressively lower the threshold.
Part IIIHow Aggregate Annual Turnover is Calculated
The Rs. 5 crore test is not based only on your turnover in the current financial year. The rule looks back at any financial year from 2017-18 onwards. If your aggregate turnover exceeded Rs. 5 crore in even one of those years, e-invoicing applies to you going forward, even if your turnover later falls below Rs. 5 crore in a subsequent year.
Important: Once you cross the threshold in any year since 2017-18, the obligation continues. There is no provision to exit the e-invoicing requirement simply because your turnover has dropped in a later year.
“Aggregate turnover” for this purpose is calculated on a PAN basis, not a GSTIN basis. This means if you have multiple GST registrations (different states) under the same PAN, the turnover across all those registrations is combined to determine whether the Rs. 5 crore threshold is crossed. A business with three GST registrations of Rs. 2 crore turnover each, totalling Rs. 6 crore, must comply with e-invoicing even though no single registration individually crosses Rs. 5 crore.
Aggregate turnover includes the value of all outward supplies, whether taxable, exempt, zero-rated (exports), or inter-state, computed on an all-India basis for that PAN.
Part IVWhich Transactions Require an E-Invoice
E-invoicing does not apply to every transaction a business undertakes. It applies specifically to the following categories:
- B2B supplies: Tax invoices issued to other GST-registered persons
- Exports: Invoices for export of goods or services, including supplies to SEZ units (treated as zero-rated supplies)
- Credit notes and debit notes: Issued in relation to B2B supplies or exports
- Supplies to Government departments and public sector undertakings: Where the recipient is GST-registered
B2C transactions are excluded from the standard e-invoicing requirement. When you sell to an end consumer who is not GST-registered, you do not need to generate an IRN. However, separate QR code requirements for B2C invoices apply to certain large taxpayers under a different notification, which is distinct from the B2B e-invoicing mandate discussed here.
Part VWho is Exempt from E-Invoicing
Even if a business crosses the Rs. 5 crore threshold, certain categories of registered persons remain exempt from e-invoicing under Notification No. 13/2020-Central Tax (as amended). These include:
- Insurance companies, banking companies, and non-banking financial companies (NBFCs)
- Goods transport agencies (GTAs) supplying services in relation to transportation of goods by road
- Suppliers of passenger transportation services
- Registered persons supplying services by way of admission to exhibition of cinematograph films in multiplex screens
- Special Economic Zone (SEZ) units (note: this exemption applies to SEZ units, but SEZ developers are not covered by this specific exemption and must comply with e-invoicing if their turnover crosses the threshold)
- Government departments and local authorities
Part VIHow the E-Invoice Process Works
The process, step by step, is as follows:
- Step 1: Generate the invoice using your accounting or billing software in your normal format, with all mandatory invoice fields (buyer GSTIN, billing address, item details with HSN code, applicable tax rates, total value)
- Step 2: The invoice data is converted to the prescribed JSON format and submitted to the Invoice Registration Portal (IRP), either manually through the IRP web interface or automatically through API integration with your billing software
- Step 3: The IRP validates the data, checking for duplication and correctness of key fields
- Step 4: On successful validation, the IRP generates and returns the IRN, a digitally signed QR code, and the signed invoice JSON
- Step 5: The business prints the final invoice, incorporating the IRN and QR code, and shares it with the buyer
- Step 6: Invoice data is automatically transmitted to the GST portal and pre-fills relevant tables in GSTR-1 for that tax period, and also feeds into Part-A of the e-way bill where applicable
Important clarification on GSTR-1: Auto-population from e-invoice data only pre-fills your GSTR-1. It does not automatically file your return. You must still log in to the GST portal, review the pre-filled details, make any necessary corrections, and formally submit and file GSTR-1 for the tax period. Generating e-invoices throughout the month does not substitute for the act of filing GSTR-1.
Cancellation Window
An e-invoice can be cancelled on the IRP within 24 hours of its generation. After this 24-hour window, the e-invoice cannot be cancelled on the IRP. Any correction required after 24 hours must be made through a credit note, followed by the necessary amendment in GSTR-1.
Part VIIThe 30-Day Reporting Rule for Rs. 10 Crore+ Businesses
A separate and important compliance requirement applies specifically to the timing of reporting, distinct from the turnover threshold for applicability.
The Goods and Services Tax Network (GSTN) introduced a rule requiring businesses to report their e-invoices to the IRP within a fixed number of days from the invoice date, rather than allowing indefinite delay in reporting. This rule went through the following stages for large taxpayers before settling into its current form:
| Advisory / Effective Date | Threshold | Reporting Window |
|---|---|---|
| GSTN advisories dated 12th and 13th April 2023 (originally to take effect 1st May 2023) | AATO Rs. 100 crore or more | 7 days (this implementation was subsequently deferred by GSTN before taking effect) |
| 1st November 2023 | AATO Rs. 100 crore or more | 30 days (this is the rule that actually came into force, after the earlier 7-day proposal was deferred and revised) |
| 1st April 2025 (per GSTN advisory dated 5th November 2024) | AATO Rs. 10 crore or more | 30 days |
Note on the 7-day proposal: GSTN had originally proposed a stricter 7-day reporting window for businesses with AATO of Rs. 100 crore or more, announced in April 2023 with an intended effective date of 1st May 2023. This was deferred by GSTN before implementation. When the rule eventually took effect from 1st November 2023, it was set at 30 days rather than 7 days. The 30-day window, not 7 days, is the rule currently in force.
Effective 1st April 2025, per a GSTN advisory dated 5th November 2024, businesses with an Annual Aggregate Turnover (AATO) of Rs. 10 crore or more must report their tax invoices, credit notes, and debit notes to the IRP within 30 days from the date of the invoice, credit note, or debit note.
What happens if you miss the 30-day window: The IRP will reject the request to generate an IRN for any document older than 30 days from its date. The invoice cannot obtain a valid IRN after this point. The business must then cancel the original document and reissue a fresh invoice with a new date and number, reported afresh within the new 30-day window. This creates accounting discrepancies, duplicate numbering issues, and reconciliation difficulties.
Important distinction: The 30-day reporting rule does NOT apply to businesses with AATO below Rs. 10 crore. Such businesses, even though they must comply with the Rs. 5 crore e-invoicing mandate itself, are currently not bound by the 30-day reporting restriction. They can report invoices to the IRP at any time after generation, though prompt reporting remains good practice.
Part VIIIConsequences of Not Generating a Valid E-Invoice
Under Rule 48(5) of the CGST Rules, 2017, any invoice issued by a notified taxpayer in any manner other than the prescribed e-invoicing method (meaning without a valid IRN) is treated as not a valid tax invoice under GST law.
The practical consequences of issuing an invoice without a valid IRN, when e-invoicing was applicable, include:
- Loss of input tax credit for the buyer: Since the document is not a valid tax invoice, the recipient cannot use it to claim input tax credit
- Penalty under Section 122 of the CGST Act, 2017: For failure to issue an invoice in accordance with the e-invoicing provisions, a penalty may apply, which can extend up to Rs. 10,000 or the amount of tax involved, whichever is higher, for each instance of non-compliance, along with an additional penalty of Rs. 25,000 for incorrect or non-compliant invoices in certain circumstances
- Possible detention of goods in transit: Goods accompanied by an invalid invoice may be detained during transportation and verification by tax authorities
For buyers receiving invoices: When you receive an invoice from a supplier who is required to comply with e-invoicing, you should verify that the invoice carries a valid IRN and QR code before claiming input tax credit on it. Accepting an invoice without a valid IRN, when the supplier was required to generate one, creates a compliance risk for your own input tax credit claim, since the document is not legally a valid tax invoice.
If your turnover has crossed Rs. 5 crore in any year since 2017-18
- You must comply with e-invoicing for all eligible B2B invoices, export invoices, and credit and debit notes related to these, regardless of whether your turnover in the current year is below Rs. 5 crore. The obligation, once triggered, continues.
- Register your billing or accounting software with an IRP-integrated solution to automate IRN generation rather than manually uploading invoices one by one.
If you operate multiple GST registrations under one PAN
- Calculate your aggregate turnover by combining turnover across all GSTINs under your PAN. Do not assess the Rs. 5 crore threshold separately for each registration; it is a combined, PAN-level test.
If your AATO is Rs. 10 crore or more
- Ensure your invoices are reported to the IRP within 30 days of the invoice date. Build automated alerts in your billing system to flag any invoice approaching the 30-day deadline that has not yet been reported.
- Avoid backdating invoices for any business reason, since the 30-day clock runs from the invoice date, not the reporting date.
If you are a buyer receiving B2B invoices
- Always check for a valid IRN and QR code on invoices from suppliers who are likely to be above the Rs. 5 crore threshold. If the invoice lacks these and e-invoicing should apply, ask your supplier to generate a valid IRN before you claim input tax credit on that invoice.
If you discover an error on an e-invoice after generation
- If discovered within 24 hours, cancel the e-invoice on the IRP and reissue a corrected one.
- If discovered after 24 hours, the original e-invoice cannot be cancelled. Issue a credit note for the difference and reflect this in your GSTR-1 for the relevant period.
Wrapping Up
E-invoicing has moved from a large-company compliance requirement to something that touches a very large segment of GST-registered businesses today, with the threshold now at Rs. 5 crore in aggregate turnover from any year since 2017-18. The mechanics are straightforward once understood: generate your invoice as usual, get it validated through the IRP, receive the IRN and QR code, and only then issue it to your buyer.
The two numbers to remember are Rs. 5 crore for applicability and Rs. 10 crore for the additional 30-day reporting deadline. Both thresholds are tested on a PAN-level aggregate turnover basis, looking back across all years since 2017-18. Build these checks into your invoicing workflow, and e-invoicing becomes a routine part of issuing any B2B sale rather than a compliance risk.
Frequently Asked Questions
Yes. The e-invoicing threshold test looks at your aggregate turnover in any financial year from 2017-18 onwards, not just the current year. Since your turnover crossed Rs. 5 crore in FY 2021-22, the e-invoicing obligation applies to you going forward and continues even though your turnover has since fallen below the threshold. There is no provision under the current notifications to exit the e-invoicing requirement once it has been triggered.
No, provided the customer is not GST-registered. E-invoicing applies to B2B supplies, meaning supplies to other GST-registered persons, exports, and supplies to certain government entities. Sales to unregistered end consumers (B2C transactions) do not require IRN generation under the standard e-invoicing mandate. You continue to issue a normal tax invoice for such sales. Note that a separate, distinct QR code requirement applies to large B2C-focused taxpayers under a different notification, but that is not the same as the B2B e-invoicing system discussed here.
No. Goods transport agencies supplying services in relation to transportation of goods by road are specifically exempt from the e-invoicing requirement under Notification No. 13/2020-Central Tax, as amended, regardless of turnover. This exemption applies to your core GTA services. If you also engage in other lines of business that would independently require e-invoicing, those other supplies would need to comply separately.
No. The 30-day reporting time limit applies only to businesses with an Annual Aggregate Turnover of Rs. 10 crore or more, effective from 1st April 2025. Since your AATO of Rs. 7 crore is below this Rs. 10 crore threshold, the 30-day restriction does not currently apply to you, even though you are still required to comply with the underlying Rs. 5 crore e-invoicing mandate itself. You should still report invoices promptly as good practice, since GST law requires invoices to be issued within prescribed timelines under Section 31 of the CGST Act in any case.
Disclaimer: For informational and educational purposes only. Based on the CGST Act 2017, CGST Rules 2017, and notifications issued by the CBIC and GSTN as referenced in this article, current as of June 2026. Thresholds and rules under GST are subject to periodic revision by the Government; readers should verify the latest position on the official GST portal before relying on this article for compliance decisions. Does not constitute legal or tax advice.
