E-invoicing became mandatory for businesses crossing ₹5 crore aggregate turnover, and the 30-day reporting rule applies from ₹10 crore. Here is what is actually in force — and what is only being discussed.
· GST · 7 min read
What e-invoicing actually is
Under GST, an e-invoice is a B2B tax invoice that is digitally registered on the government's Invoice Registration Portal (IRP) before it is shared with the buyer. The IRP validates it and returns an Invoice Reference Number (IRN) along with a signed QR code.
That IRN and QR code are what make the invoice a valid tax document. An invoice without them is not compliant, even if the sale itself was entirely legitimate.
The current threshold: ₹5 crore
As of 2026, e-invoicing is mandatory for businesses with an aggregate annual turnover of ₹5 crore or more.
There is a detail that catches people: the ₹5 crore test is not based on your turnover today. If you crossed ₹5 crore in any financial year from 2017-18 onwards, the obligation persists even if your turnover has since fallen below it.
How the threshold got here
The limit has been lowered repeatedly, and each cut brought in a new band of businesses:
| Effective from | Turnover threshold |
|---|---|
| 1 October 2020 | ₹500 crore |
| 1 January 2021 | ₹100 crore |
| 1 April 2021 | ₹50 crore |
| 1 April 2022 | ₹20 crore |
| 1 October 2022 | ₹10 crore |
| 1 August 2023 | ₹5 crore (current) |
The extra ₹10 crore rule: 30-day reporting
Since 1 April 2025, businesses with an annual aggregate turnover of ₹10 crore or more must report their e-invoices to the IRP within 30 days of generating them, rather than in near real time.
So there are two separate obligations that are easy to conflate:
- ₹5 crore and above — you must generate e-invoices at all.
- ₹10 crore and above — you must additionally report them to the IRP within 30 days.
What is NOT mandatory
- B2C invoices. E-invoicing applies to business-to-business supplies. Retail sales to walk-in customers are outside it.
- Small taxpayers. A business below ₹5 crore aggregate turnover is not mandatorily required to generate e-invoices, unless it has a past exposure as described above.
- Exports are covered, but only if your overall turnover is above ₹5 crore, and they still need an IRN.
The penalties are per invoice, and they add up
- ₹10,000 per invoice for failing to issue an e-invoice.
- ₹25,000 per invoice for issuing one with incorrect details.
- Input Tax Credit can be denied to your buyer if you did not issue a valid e-invoice. In practice this is often a bigger cost than the penalty, because your customer disputes the credit.
Ten non-compliant invoices in a month is ₹1,00,000 in penalties, before you count the credit you have effectively funded for your customers.
What is being discussed for 2026 — and what is not official
You will see a lot of articles claiming e-invoicing is about to drop to ₹1 crore. No such change has been notified. The government has repeatedly said the threshold may be reduced further, and industry bodies expect the ₹1 crore mark to be the next step, but as of now nothing is in force.
Treat any article stating the ₹1 crore rule as "current" with suspicion. If you are a business with turnover between ₹1 crore and ₹5 crore, the practical advice is not to panic but to prepare — most of the work is software readiness, which takes weeks, not days.
How to check if you are covered
- Add up your aggregate turnover for the last financial year, and check whether you crossed ₹5 crore in any year since 2017-18.
- If yes, confirm your billing software can generate an IRN and a signed QR code.
- If you are at ₹10 crore or above, verify the 30-day reporting workflow is in place.
- Run a test invoice end to end before your next real billing cycle.
While you are setting up, use a compliant GST invoice generator to make sure the mandatory fields — GSTIN, HSN/SAC, place of supply, tax breakup — are never left blank, because blank fields are what generate rejected e-invoices.
Frequently Asked Questions
Is e-invoicing compulsory for small businesses? No, not below ₹5 crore aggregate turnover. But if you crossed ₹5 crore in any financial year from 2017-18 onwards, the requirement still applies even if your current turnover is lower.
Do I need e-invoicing for retail B2C sales? No. E-invoicing applies to B2B supplies. Your retail counter sales to individual customers do not require an IRN, though B2B sales made at the same counter do.
What is the 30-day rule and when does it apply? Businesses with ₹10 crore or more annual aggregate turnover must report e-invoices to the IRP within 30 days of generation. This is a separate obligation from the basic e-invoicing requirement at ₹5 crore.
Has the threshold dropped to ₹1 crore? Not yet. A reduction to ₹1 crore has been widely expected and discussed, but no notification has been issued putting it into force. The binding threshold remains ₹5 crore.
What happens if I issue an invoice without an IRN? It is treated as not issued for e-invoicing purposes. You attract a penalty of ₹10,000 per invoice, and your buyer can have their input tax credit denied for that supply.
Do exports need an IRN? Yes, if your aggregate turnover is above ₹5 crore, export invoices also need to be registered and an IRN obtained.
Being ready early is cheaper than being ready late
The businesses that struggle with e-invoicing are the ones that start on the deadline. Software configuration, GSTIN verification and trial runs all take time, and the penalties are charged per invoice rather than per month. If you are anywhere near the threshold, getting a test invoice through the IRP this quarter is the cheapest thing you can do.
While you are setting that up, make sure the invoice you issue by hand in the meantime is still complete. A missing GSTIN, HSN code or amount in words is exactly what generates a rejected e-invoice, and the GST invoice format guide lists the fields that have to be there.