E-invoicing under GST is no longer optional for most businesses. As of FY 2026-27, businesses with annual aggregate turnover above ₹5 crore in any preceding financial year from 2017-18 onwards must generate e-invoices for all B2B supplies. This guide covers thresholds, the IRN generation mechanism, common mistakes, and penalties.
At a glance
- Threshold (FY 2026-27): Aggregate turnover over ₹5 crore in any FY since 2017-18
- What’s covered: B2B supplies, exports, deemed exports, SEZ supplies, RCM invoices
- What’s exempt: B2C supplies, certain government bodies, GTAs, SEZ developers
- Mechanism: Invoice details posted to NIC’s Invoice Registration Portal (IRP) → IRP returns IRN + QR code → IRN must appear on the invoice
- Penalty: Invoice without IRN is treated as not issued — ₹10,000 per invoice OR amount of tax involved (whichever higher)
Who must comply
The applicability of e-invoicing has been progressively expanded since October 2020. Each phase reduced the turnover threshold for mandatory adoption:
- October 2020 — Above ₹500 crore
- January 2021 — Above ₹100 crore
- April 2021 — Above ₹50 crore
- April 2022 — Above ₹20 crore
- October 2022 — Above ₹10 crore
- August 2023 — Above ₹5 crore (current threshold)
Critical to remember: Once a business crosses the threshold in any financial year from 2017-18 onwards, e-invoicing applicability is permanent. You cannot exit the regime even if turnover subsequently drops below ₹5 crore.
What gets covered under e-invoicing
E-invoicing applies to:
- B2B invoices (supplies to GST-registered persons)
- Export invoices (with or without LUT)
- Deemed exports
- Supplies to SEZ units (note: developers are exempt)
- Reverse charge invoices (where the recipient pays tax)
- Credit notes and debit notes related to the above
What’s exempt
The following are explicitly excluded from the e-invoicing requirement:
- Pure B2C invoices (to unregistered consumers)
- Specified government departments and PSUs
- Insurance, banking, financial institutions, NBFCs (for their normal business)
- Goods Transport Agencies
- Passenger transport services (via aggregators)
- Cinema theatres (admission tickets)
- SEZ developers — note: SEZ units are NOT exempt
How the IRN mechanism works
The end-to-end flow for each invoice:
1. Generate the invoice in your accounting software, ERP, or our free Tax Invoice Generator 2. Submit invoice JSON to NIC’s Invoice Registration Portal (IRP) — directly via their API or through a GSP/ASP 3. IRP validates and returns:
- Invoice Reference Number (IRN) — a 64-character hash
- QR code containing IRN, GSTIN, invoice number, date, taxable value, etc.
- Acknowledgement number and date
4. Print IRN and QR code on the invoice given to the buyer (mandatory) 5. GSTR-1 auto-population — invoice details flow to your GSTR-1 automatically (no separate filing needed for these line items) 6. E-way bill data is auto-shared — single-step e-way bill generation possible
Common mistakes to avoid
Generating invoice with manual invoice number after IRN issuance. The IRP-issued IRN is tied to your specific invoice number. Don’t change the invoice number once IRN is generated.
Not cancelling IRN within 24 hours of cancelled invoices. If you cancel an invoice, you must cancel the IRN within 24 hours of generation. After 24 hours, cancellation is not permitted — you’ll need a credit note instead.
Issuing invoice without IRN to B2B buyers. Invoice without IRN is invalid for ITC claim by the buyer. Buyer cannot claim ITC against it. You face the ₹10,000 penalty per invoice.
Using the wrong document type code. Tax Invoice = INV; Credit Note = CRN; Debit Note = DBN. Using the wrong code rejects the IRN request entirely.
Decimal precision mismatch. IRP rejects invoices where line item totals don’t reconcile to the invoice total at 2-decimal precision. Always verify the math before submission.
Penalties for non-compliance
Per Section 122(1)(i) of the CGST Act:
- ₹10,000 per invoice OR amount of tax involved (whichever is higher)
- Buyer cannot claim ITC against an invoice that should have had IRN but doesn’t
For repeated non-compliance, the GST officer can additionally:
- Suspend GSTIN
- Block e-way bill generation
- Initiate proceedings under Section 73/74
What’s coming next
Recent CBIC notifications suggest further reduction of the threshold to ₹2 crore is being considered for B2B supplies. Watch this space — we update this guide whenever the threshold changes or new exemptions are announced.
Frequently asked questions
Q: Do I need e-invoicing for B2C supplies? A: No. E-invoicing applies only to B2B supplies. For B2C, normal tax invoice rules apply.
Q: What if my turnover dropped below ₹5 crore last year? A: Once you’ve crossed ₹5 crore in any year since 2017-18, e-invoicing applicability is permanent.
Q: Can I generate e-invoices manually if I have just 5-10 a month? A: Yes — the NIC IRP has a portal where you can manually upload invoice JSON or fill a form. For low volumes, this works.
Q: Is there a penalty if I issue invoice without IRN to a B2C consumer? A: No. B2C invoices don’t require IRN. The penalty applies only to B2B invoices that should have had IRN.
Q: Does e-invoicing replace GSTR-1 filing? A: It auto-populates the B2B sections of GSTR-1, but you still need to file GSTR-1 (with B2C supplies, amendments, etc.).
Generate compliant invoices
Our free Tax Invoice Generator produces invoices with all mandatory fields per Section 31 + Rule 46 of CGST Rules. The output is structurally ready for IRP submission. We’re building IRN integration as part of the upcoming Pro tier for users who issue volume.
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Last updated: April 2026. Reviewed by Practising Chartered Accountants. This guide is for general information only and does not constitute professional advice. For your specific situation, consult a qualified Chartered Accountant.