E-Invoicing at ₹5 Crore: What Small Businesses Must Do and the Mistakes to Avoid
GST e-invoicing is mandatory once your annual turnover has crossed ₹5 crore in any year since 2017-18. Who it covers, how the IRN works, the 30-day reporting limit, and what a wrong invoice costs.
In this article
E-invoicing does not mean sending invoices by email. It means registering each B2B invoice with the government's Invoice Registration Portal (IRP) before it is issued, and printing the resulting Invoice Reference Number (IRN) and QR code on it. Since 1 August 2023 it applies to every business with an aggregate turnover above ₹5 crore.
Does it apply to you?
The test is aggregate turnover under one PAN in any financial year from 2017-18 onwards. If you crossed ₹5 crore in any of those years, e-invoicing applies from 1 April of the following year — and continues even if turnover later drops.
Exempt regardless of turnover: SEZ units, insurers, banks and financial institutions including NBFCs, goods transport agencies, passenger transport services, multiplex cinema admission, and government departments and local authorities.
Which documents need an IRN
- Tax invoices to registered persons (B2B)
- Exports and supplies to SEZ units and developers, with or without payment of tax
- Credit notes and debit notes against those invoices
- Supplies where the recipient is liable under reverse charge (the supplier still reports)
Not covered: B2C invoices, bills of supply (exempt or composition supplies), delivery challans, and self-invoices for reverse charge on purchases from unregistered persons.
How it works day to day
- Your accounting software (or the free NIC offline tool / GePP for small volumes) prepares the invoice in the prescribed JSON schema.
- It is sent to an IRP — NIC's is the most used; several private IRPs are also authorised.
- The IRP validates it, generates a 64-character IRN, signs it, and returns a QR code.
- You print the IRN and QR code on the invoice and give it to the customer.
- The invoice details flow automatically into your GSTR-1 and the customer's GSTR-2B, and into the e-way bill system if transport details were included.
An IRN can be cancelled within 24 hours of generation. After that, the only correction is a credit or debit note.
The 30-day reporting limit
For taxpayers with aggregate turnover of ₹10 crore or more, an invoice must be reported to the IRP within 30 days of the invoice date; the portal rejects anything older. The limit was ₹100 crore when introduced in November 2023 and reduced to ₹10 crore from 1 April 2025. Businesses between ₹5 crore and ₹10 crore are not yet subject to the limit, but backdating invoices is a habit worth dropping before the threshold comes down again.
What non-compliance costs
- An invoice that should have an IRN but does not is not a valid tax invoice. Your customer's ITC can be denied, which is usually the first consequence you hear about.
- Penalty of ₹10,000 per invoice or the tax involved, whichever is higher, for a non-issued e-invoice (section 122), and ₹25,000 per invoice for an incorrect one.
- Goods moving without a valid invoice can be detained in transit.
A checklist for the first month
- Confirm your turnover history for every year since 2017-18 — including exempt and export turnover.
- Enable e-invoicing on the portal and register your GSTIN on the IRP.
- Test your software's JSON output with the sandbox before the go-live date.
- Update your invoice template to show IRN, acknowledgement number, date and QR code.
- Train the person raising invoices: no IRN, no invoice.
- Reconcile IRP data with GSTR-1 each month — the auto-population is not always complete.
If you are approaching ₹5 crore, set this up before you cross it. Our GST services cover e-invoicing enablement and monthly reconciliation for growing MSMEs.
Frequently asked questions
My turnover crossed ₹5 crore only in one earlier year. Does e-invoicing apply?
Yes. The test is aggregate turnover in any financial year from 2017-18 onwards. Once you have crossed ₹5 crore in any year, e-invoicing applies from the start of the next financial year and continues even if turnover later falls.
Do I need e-invoicing for sales to consumers?
No. E-invoicing applies to B2B invoices, exports, credit and debit notes, and supplies to SEZ units — not to B2C invoices. B2C invoices for businesses above ₹500 crore need a dynamic QR code, which is a separate requirement.
What is the 30-day rule?
Taxpayers with aggregate turnover of ₹10 crore or more must report an invoice to the Invoice Registration Portal within 30 days of the invoice date; the portal rejects older invoices. Businesses below ₹10 crore are not yet subject to the time limit, but good practice is to generate the IRN at the time of invoicing.
Sources
This article is general information for Indian MSMEs, not advice on your specific case. Scheme terms, tax rates and due dates change; the sources above were checked when the article was written or last updated. Speak to a professional before acting on it.
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