E-invoicing under GST applies to every registered business whose aggregate turnover has crossed ₹5 crore in any financial year from 2017–18 onwards. If you fall within that net, your B2B supplies, exports, supplies to Special Economic Zones, and the credit and debit notes tied to them must be reported to a government-run Invoice Registration Portal, which returns a unique Invoice Reference Number. Without that IRN, the document is not a valid invoice under GST law, and the penalties for skipping the process stack from multiple directions at once.
The ₹5 Crore Turnover Threshold
Applicability turns on aggregate turnover, calculated across every registration held under the same Permanent Account Number. Under Section 2(6) of the CGST Act, aggregate turnover includes taxable supplies, exempt supplies, exports, and inter-state supplies computed on an all-India basis.1Central Board of Indirect Taxes and Customs. CGST Act Section 2 – Definitions Central tax, state tax, union territory tax, integrated tax, and cess are excluded. If your combined turnover across all branches and registrations hit ₹5 crore or more in any qualifying year, you are inside the mandate.
The threshold has come down in stages. E-invoicing began at ₹500 crore in October 2020, after the original ₹100 crore start date planned for April 2020 was pushed back due to COVID-19.2Press Information Bureau. GST Taxpayers Get Relief in Implementation of e-Invoice It stepped down through ₹100 crore, ₹50 crore, ₹20 crore, and ₹10 crore before reaching the current ₹5 crore threshold in August 2023.
One detail catches businesses off guard. Once your turnover crosses the threshold in any qualifying year, you stay inside the mandate permanently. A dip in revenue the following year does not take you back out. Splitting operations across separate entities does not help either, because the calculation aggregates everything under the same PAN, and the tax department tracks it through annual returns and monthly filings.
Which Transactions Are Covered
Rule 48(4) of the CGST Rules targets business-to-business supplies.3GST Invoice Registration Portal. E-Invoice Under GST as per Rule 48(4) of CGST Rules 2017 Every supply of goods or services between two GST-registered entities must go through the IRP to receive an IRN. The mandate extends to:
- Export invoices, so customs and GST records align on goods and services shipped outside India.
- Supplies to Special Economic Zones, which require the same digital validation as any other B2B transaction.
- Credit and debit notes issued for B2B transactions, exports, and SEZ supplies. B2C credit notes remain outside the requirement.
Sales made directly to unregistered consumers are excluded. Retail businesses dealing primarily with walk-in customers do not register each sale on the IRP.
Separate B2C QR Code Rule Above ₹500 Crore
B2C invoices skip the IRP process, but businesses with aggregate turnover exceeding ₹500 crore face a distinct requirement under Notification 14/2020-Central Tax: every B2C invoice must carry a dynamic QR code enabling digital payment.4GST Invoice Registration Portal. E-Invoice B2C QR Code – Applicability, Penalty, Contents, Generation, Exemption List The code must contain the supplier’s GSTIN, invoice number and date, total value, GST breakup, and a UPI-linked payment identifier. It has been in effect since October 2021, and non-compliance attracts a penalty of ₹25,000 per invoice.
Who Is Exempt Regardless of Turnover
Certain registered persons are excused from e-invoicing no matter how high their turnover runs. The exemptions were established through Notification 13/2020-Central Tax and later amendments including Notification 61/2020.5Goods and Services Tax Network. E-Invoicing FAQs The exempted categories are:
- Special Economic Zone units. SEZ developers are not exempt and must comply like any other business above the threshold.
- Insurance companies.
- Banks, financial institutions, and non-banking financial companies.
- Goods Transport Agencies providing road freight in goods carriages.
- Suppliers of passenger transportation services.
- Suppliers of admission services for cinematograph films in multiplex screens.
- Persons registered under Rule 14 of the CGST Rules, covering Online Information and Database Access or Retrieval (OIDAR) services.
An insurance company or an NBFC with turnover well above ₹500 crore is not held to the e-invoicing standards a manufacturer of similar size would face.
The 30-Day Reporting Deadline for Larger Taxpayers
Businesses with aggregate annual turnover of ₹10 crore or more face a stricter reporting window. E-invoices must be reported to the IRP within 30 days of the invoice date, and starting April 1, 2025, the portal rejects any invoice older than 30 days from the document date for taxpayers above this turnover level.6GST e-Invoice Portal. Advisory – Time Limit for Reporting e-Invoice on the IRP Portal
For businesses between ₹5 crore and ₹10 crore, no hard reporting deadline currently applies beyond the general GSTR-1 filing timeline. Leaving it to the last minute is still risky, because a rejected upload close to the filing deadline gives you very little room to fix errors.
The 24-Hour Cancellation Window
If you issue an e-invoice with errors, you have exactly 24 hours from IRN generation to cancel it on the IRP. After that window closes, the cancel option disappears from the portal. There is no grace period. When cancelled within the allowed time, the IRN is permanently invalidated, the invoice is treated as never issued, and the corresponding GSTR-1 entry is deleted automatically.
Two further constraints tighten this. You cannot partially cancel an e-invoice; if one line item is wrong, you cancel the entire invoice and issue a fresh one. And if an active e-way bill is linked to the invoice, the portal blocks IRN cancellation until the e-way bill is dealt with. The invoice number from a cancelled IRN cannot be reused.
After the 24-hour window, corrections happen outside the IRP. You can cancel the invoice on the GST portal before filing GSTR-1, or issue a credit note to reverse the original transaction. Amendments to invoice details are handled through GSTR-1, not through the e-invoice portal. Many businesses assume they can fix things on the IRP days later, only to find the option gone.
What Happens if You Don’t Comply
The consequences hit from several directions at once, and they stack on the same transaction.
The Invoice Is Not an Invoice
Under Rule 48(5), any invoice issued by a mandated business without going through the IRP is not treated as an invoice at all.3GST Invoice Registration Portal. E-Invoice Under GST as per Rule 48(4) of CGST Rules 2017 The document has no legal standing, cannot support claims in audits or disputes, and does not count as a valid record of the underlying transaction.
₹10,000 or the Full Tax, Whichever Is Higher
Section 122(1) of the CGST Act imposes a penalty of ₹10,000 or the full amount of tax involved, whichever is higher, on any taxable person who supplies goods or services without issuing a proper invoice.7Central Board of Indirect Taxes and Customs. CGST Act Section 122 – Penalty for Certain Offences Because a non-IRP invoice is treated as no invoice at all, this penalty applies to every non-compliant document. On high-value transactions, the penalty easily dwarfs the cost of setting up proper e-invoicing.
Your Buyer Loses Input Tax Credit
Section 16(2)(a) of the CGST Act requires the recipient to possess a valid tax invoice before claiming input tax credit.8Central Board of Indirect Taxes and Customs. CGST Act Section 16 – Eligibility and Conditions for Taking Input Tax Credit If your invoice lacks an IRN, your buyer cannot claim the credit. Their tax burden goes up, and they gain a direct financial reason to stop buying from you. In practice this is often what forces compliance faster than any statutory penalty.
Goods Can Be Detained in Transit
Section 129 authorizes officers to detain or seize goods being transported without valid documentation.9Central Board of Indirect Taxes and Customs. CGST Act Section 129 – Detention, Seizure, and Release of Goods and Conveyances in Transit Since e-invoicing is linked to e-way bill generation, an invalid invoice can also invalidate the accompanying e-way bill.10GST Invoice Registration Portal. Non-Compliance With e-Invoicing – Consequences and Common Mistakes to Avoid If the goods owner comes forward, release requires paying a penalty equal to 200% of the tax payable. If the owner does not come forward, the penalty jumps to 50% of the goods’ value or 200% of the tax, whichever is higher. Goods unclaimed for 15 days after the penalty order can be sold or disposed of by the authorities.
A single shipment with a missing IRN can trigger the invalid document penalty, deny your buyer’s input tax credit, and get the goods held at a roadside checkpoint, all from the same lapse.