E-invoice

What it means

An e-invoice is a normal B2B tax invoice that is reported to the government’s Invoice Registration Portal (IRP) before it is given to the buyer. The IRP checks the invoice, gives it a unique Invoice Reference Number (IRN), digitally signs it and adds a QR code. The details then flow automatically into the seller’s GSTR-1 and the e-way bill system. It does not mean the government prepares your invoice; you still raise it in your own accounting software and only report it.

How it works

E-invoicing is mandatory for a business whose aggregate turnover crossed ₹5 crore in any financial year from 2017-18 onwards. Once you cross the limit in any one year, it applies to you from then on, even if turnover later falls.

• Covered: B2B invoices, credit notes, debit notes and export invoices.

• Not covered: B2C sales, and certain notified sectors such as banks and NBFCs, insurers, goods transport agencies, passenger transport services, SEZ units and multiplex cinema admissions.

• Time limit: businesses with aggregate turnover of ₹10 crore or more must report an invoice to the IRP within 30 days of its date. The IRP will not accept it after that.

• Cancellation: an IRN can be cancelled on the IRP within 24 hours. After that, you must issue a credit note.

Example

Shah Traders of Surat had turnover of ₹6.2 crore in FY 2024-25, so e-invoicing applies to it. On 3 October 2026 it sells goods to a registered buyer in Mumbai.

Taxable value: ₹2,00,000

IGST at 18%: ₹2,00,000 x 18% = ₹36,000

Invoice total: ₹2,36,000

The accountant uploads the invoice from the billing software to the IRP. The IRP returns an IRN and a signed QR code, which are printed on the invoice before it goes to the buyer. Because Shah Traders is below ₹10 crore, the 30-day limit does not apply, but best practice is still to generate the IRN on the invoice date. If its turnover had been ₹12 crore, the invoice would have to be reported by 2 November 2026 at the latest.

Key points to remember

• An invoice that needs an IRN but does not have one is not a valid tax invoice, so the buyer can be denied input tax credit.

• Check your turnover for every year since 2017-18, not just the latest year, to see whether you are covered.

• Issuing invoices without an IRN can attract penalty, generally the higher of ₹10,000 or the tax involved, per invoice.

• Do not edit an invoice after the IRN is generated; cancel within 24 hours or issue a credit note.

• Keep your billing software and the IRP details (GSTIN, HSN, state codes) consistent to avoid rejections.