E-Invoice Under GST: Limit, Process and Rules

An e-invoice under GST is a normal B2B tax invoice that is reported to a government Invoice Registration Portal (IRP) and gets a unique Invoice Reference Number (IRN) and a signed QR code. If your business has crossed the turnover limit, an invoice without an IRN is not a valid tax invoice, and your buyer cannot claim input tax credit on it. This guide explains who must issue an e-invoice under GST, which documents are covered, how the process works, and the mistakes to avoid.

Who must issue e-invoices?

E-invoicing is mandatory for every GST-registered business whose aggregate turnover crossed ₹5 crore in any financial year from 2017-18 onward. Once you cross the limit in any year, e-invoicing applies to you from then on, even if your turnover falls later.

Aggregate turnover is counted on your PAN, across all GSTINs. So a business with two branches of ₹3 crore each has an aggregate turnover of ₹6 crore and must e-invoice.

Some businesses are exempt even above the limit, including:

• SEZ units (but not SEZ developers)
• insurance companies, banks, financial institutions and NBFCs
• goods transport agencies
• passenger transport services
• multiplex cinemas for admission tickets

Which documents need an IRN?

How the e-invoice process works

1. Create the invoice in your billing or accounting software as usual.
2. Generate the JSON in the government's e-invoice schema. Most software does this automatically.
3. Upload to an IRP. You can use the NIC portal or any of the other authorised IRPs, either directly or through your software's integration.
4. The IRP validates the invoice: GSTINs, HSN codes, tax calculations and duplicate checks.
5. The IRP returns a unique IRN, a digitally signed invoice and a signed QR code.
6. Print the QR code on the invoice you give the buyer.
7. Data flows automatically to your GSTR-1 and, if transport details were given, to the e-way bill system.

When billing software is integrated with an IRP, all of this happens in a few seconds when you save the invoice.

The 30-day reporting rule

Businesses with an aggregate turnover of ₹10 crore or more cannot report invoices to the IRP more than 30 days after the invoice date. If you miss the window, the IRP rejects the invoice, and you cannot issue a valid tax invoice for that sale.

Even if you are below ₹10 crore, generate the IRN at the time of billing. It is the simplest way to stay compliant and avoid disputes with buyers.

Cancelling or changing an e-invoice

• An e-invoice can be cancelled within 24 hours of generating the IRN, fully, on the IRP. Partial cancellation is not allowed.
• After 24 hours, you cannot cancel it on the IRP. Issue a credit note instead, and report it in GSTR-1.
• If an e-way bill was generated with the IRN, cancel the e-way bill first.
• You cannot reuse an invoice number once an IRN has been generated for it, even if it was cancelled.

What changes on the printed invoice

The layout of your invoice does not have to change much. The e-invoice is not a new design; it is your normal tax invoice with three additions. The IRN, a 64-character reference number, is printed on the invoice. The signed QR code, which contains key details such as the GSTINs, invoice number, date, value and HSN code of the main item, is printed so that officers and buyers can verify it with a mobile app. The acknowledgement number and date from the IRP are usually printed too.

Everything else stays as before: your logo, terms, bank details and UPI QR can remain exactly where they are. Many businesses simply add a box at the top right of the invoice for the IRN details and QR code.

E-invoicing for credit notes and returns

Credit notes and debit notes issued to registered buyers also need an IRN once you are under e-invoicing. When a customer returns goods, create the credit note against the original invoice in your software and generate its IRN in the same way. The credit note then appears in the buyer's records and in your GSTR-1 without extra typing. Our guide to the credit note in GST explains the rules and the time limit.

Benefits of e-invoicing

E-invoicing feels like extra work at first, but it removes several problems:

• B2B invoices are auto-filled in GSTR-1, so there is less typing and fewer mismatches.
• Buyers see your invoices quickly in their GSTR-2B, which speeds up their ITC and your payments.
• E-way bill Part A can be filled from the e-invoice, saving time for distributors.
• Fake invoices are harder to create, which protects honest businesses.

Common e-invoice errors

1. Invalid buyer GSTIN, or a GSTIN that has been cancelled. Verify GSTINs when you add a new customer.
2. Wrong HSN code or fewer digits than required. Businesses above ₹5 crore need 6-digit HSN codes. See HSN codes on GST invoices.
3. Tax calculation mismatch between line items and totals, often due to rounding.
4. Duplicate invoice number in the same financial year.
5. Wrong place of supply, leading to CGST/SGST instead of IGST.
6. Missing pin code for the buyer or delivery address.

Most of these are prevented when your billing software validates data before sending it to the IRP.

Getting ready if you are close to ₹5 crore

If your turnover is approaching the limit, prepare a few months in advance:

• Clean up your customer list and verify every GSTIN.
• Make sure every item has a 6-digit HSN code.
• Choose billing software with built-in IRP integration.
• Test generating IRNs on the sandbox or with a few real invoices in the first week.
• Train the staff who make bills, because they will now see validation errors at the counter.

E-invoices and e-way bills together

For distributors who move goods every day, generating the e-way bill along with the IRN saves a lot of time. Enter the transporter and vehicle details while creating the invoice, and both are generated together. Our guide to e-way bill rules explains when an e-way bill is needed.

E-invoicing in Gaddibook

Gaddibook generates the IRN and QR code from the invoice screen, validates GSTINs and HSN codes before sending, and fills your GSTR-1 automatically. Distributors can create the e-way bill in the same step. Read more on our distributor billing software page.

FAQ

What is the turnover limit for e-invoice under GST?

E-invoicing is mandatory if your aggregate turnover crossed ₹5 crore in any financial year since 2017-18.

Is e-invoicing required for B2C invoices?

No. E-invoicing applies to B2B invoices, exports and supplies to SEZs. Very large businesses must show a dynamic QR code on B2C invoices instead.

Can I cancel an e-invoice?

Yes, within 24 hours of generating the IRN. After that, issue a credit note.

What happens if I do not generate an e-invoice when required?

The invoice is not a valid tax invoice. Your buyer cannot claim ITC on it, and penalties can apply.

Is there a cost to generate e-invoices?

The government IRPs are free. Billing software may include e-invoicing in some plans and charge for it in others.