Issuing an invoice that appears to be legitimate but was never reported to the Invoice Registration Portal can render that invoice legally invalid under GST — and the consequent input tax credit refusal frequently falls on your customer first, hurting the relationship before you even realize there’s an issue. Sharda Associates, a Bhopal-based CA-led financial consultancy, assists businesses with GST compliance, e-invoicing setup, and over 45,500 CA-certified reports delivered across India for a clear ₹2,999. This guide discusses who must comply with e-invoicing by 2026, who is exempt, and how the process works.
Key Takeaways
- Since FY 2017-18, enterprises having an aggregate revenue of more than ₹5 crore must use e-invoicing.
- The ₹5 crore barrier is based on PAN-India and includes all GST registrations under that PAN.
- Once crossed, the criterion remains even if the turnover falls below ₹5 crore.
- Businesses with a turnover of ₹10 crore or more must upload invoices to the IRP within 30 days of the invoice date. Banks, NBFCs, insurers, GTAs, SEZ units, and a few other groups are exempt, regardless of revenue.
What Is E-Invoicing and Who Needs to Comply
E-invoicing under GST does not entail creating invoices on the government platform; instead, you continue to generate invoices using your own billing or accounting software as previously. What changes is that every B2B invoice must now be reported to the Invoice Registration Portal (IRP), which validates the information and returns a unique Invoice Reference Number (IRN) along with a QR code. Only after this validation will the invoice be legally recognized under GST law.
E-invoicing is required for businesses with an annual turnover of ₹5 crore or more in any fiscal year beginning with FY 2017-18, not only the present year. Even if a business’s turnover drops below ₹5 crore, they must still comply, as the duty is not reversed with a subsequent decrease in sales.
Turnover Threshold | Requirement |
Above ₹5 crore (any year since FY 2017-18) | Mandatory e-invoicing for B2B, export, and government supply invoices |
Above ₹10 crore | Additionally, invoices must be reported to the IRP within 30 days of the invoice date |
Below ₹5 crore (never crossed) | E-invoicing not mandatory, though voluntary adoption is allowed |
The threshold is calculated on a PAN basis, meaning if a business has multiple GST registrations across different states under the same PAN, their combined turnover determines applicability—not the turnover of each registration individually.
Which Transactions Are Covered and Who Is Exempt
E-invoicing is typically used for business-to-business (B2B) supply, exports, and supplies to government departments or public sector organizations, as well as related credit and debit notes. Business-to-consumer (B2C) invoices are now exempt from the e-invoicing rule; nevertheless, QR code requirements apply separately for major B2C-heavy enterprises in some situations.
Certain groups are excluded from e-invoicing, regardless of turnover, because their invoicing is governed by various regulatory frameworks:
- Banks, insurers, and non-banking financial firms (NBFCs)
- products transportation agencies (GTAs) move products by road.
- Passenger transportation service providers
- Providers of services through admission to cinematographic film exhibitions on multiplex screens.
- SEZ units (developers are not exempt)
- Government ministries and local authorities.
Businesses in these categories do not need to create IRNs, even if their sales exceed ₹5 crore. However, they must still follow regular GST invoicing and filing obligations.
How the E-Invoicing Process Works
Once a business is subject to the mandate, issuing a compliant e-invoice follows a regular pattern, whether done manually or by automatic ERP integration:
Step | Action |
1 | Generate the invoice as usual through your billing or accounting software, following the standard schema (Form GST INV-01) |
2 | Upload the invoice data in JSON format to the Invoice Registration Portal (IRP), either manually or via API integration |
3 | The IRP validates the supplier’s GSTIN, invoice number, and tax details for duplication and correctness |
4 | Once validated, the IRP generates a unique 64-character Invoice Reference Number (IRN) |
5 | A QR code containing key invoice details (GSTIN, invoice number, date, value, HSN, IRN) is attached for offline verification |
6 | The validated invoice, IRN, and QR code are shared back with the business to issue to the buyer |
7 | Details auto-populate into GSTR-1 and Part A of the e-way bill, reducing duplicate data entry |
An invoice produced by an e-invoicing-compliant business but without a valid IRN is considered invalid under Rule 48(4) of the CGST Rules, which means the recipient cannot claim input tax credit until the error is fixed. Cancellation of an e-invoice is only permitted within 24 hours of IRN production; after that time, adjustments must be made via credit note and recorded in the subsequent GSTR-1 filing, as the IRP does not allow amendments after this period.
Why Choose Sharda Associates
- Our CA-certified assistance covers e-invoicing, ERP integration, and GST compliance.
- We have provided over 45,500 project reports and compliance documentation across India.
- Standard project reports cost ₹2,999.
- Help with fixing inaccurate invoices, credit notes, and GSTR-1 reconciliation.
- Experienced staff that updates you on threshold and rule changes as GST Council notifications evolve.
- GST guidance from registration to e-invoicing to return filing, all under one roof.
Conclusion
E-invoicing is now a mandatory compliance requirement for businesses with a turnover above ₹5 crore. Proper setup and validation ensure invoices and buyers’ input tax credits are protected.
Sharda Associates offers CA-certified experience in GST compliance, including e-invoicing applicability assessments and ERP integration help. They have provided over 45,500 reports across India for a flat fee of ₹2,999 for basic project reports. Call Sharda Associates at 8989977769 if you need assistance determining whether your e-invoicing is applicable or resolving compliance issues.
Frequently Asked Questions
- What is the current e-invoicing turnover limit under GST?
E-invoicing is essential for firms with aggregate turnover over ₹5 crore in any financial year since FY 2017-18, and this threshold remains fixed till 2026.
- Does e-invoicing include B2C invoices?
No, e-invoicing is currently limited to B2B, export, and government supply invoices; B2C invoices fall outside of the basic e-invoicing mandate.
- Is e-invoicing necessary if my turnover is less than ₹5 crore this year?
Since FY 2017-18, businesses must meet the ₹5 crore criterion, even if their present turnover is less than that amount.
- What happens if an e-invoice is generated without a valid IRN?
An invoice lacking a valid IRN is considered invalid under GST rules, and the recipient cannot claim input tax credit until it is repaired.
- Can I cancel an e-invoice after it is generated?
Yes, but only within 24 hours after IRN production; thereafter, adjustments must be provided via credit note and recorded in GSTR-1.
- Who is free from e-invoicing, regardless of turnover?
Banks, NBFCs, insurers, goods transport agencies, passenger transportation providers, SEZ units, and government offices are exempt from the e-invoicing requirement.
- What is the 30-day reporting period for electronic invoices?
Businesses with a turnover of ₹10 crore or more must upload invoices to the IRP within 30 days of the invoice date. Otherwise, the portal would reject them.
- How is the turnover criterion of ₹5 crore computed for organizations having multiple GST registrations?
The threshold is calculated on a PAN-India basis, including the turnover of all GST registrations associated with the same PAN, including branches in several states.
- Can e-invoicing replace the need for e-way bills?
No, e-invoicing and e-way bills are distinct needs; however, e-invoice data does auto-populate relevant fields in the e-way bill system to reduce duplicate entry.