How the threshold has changed, and why it keeps dropping
E-invoicing was introduced in October 2020 for businesses above ₹500 crore turnover. Since then, the threshold has been lowered in stages — through ₹100 crore, ₹50 crore, ₹20 crore, ₹10 crore, and now ₹5 crore, effective since 1 August 2023 and unchanged as of this page's last review. The direction has been consistently downward, and businesses currently below but approaching ₹5 crore turnover are generally well advised to treat e-invoicing readiness as a "when," not an "if."
An invoice issued without a valid IRN and QR code, where e-invoicing applies, is not treated as a valid tax invoice under GST law — which means the buyer cannot claim input tax credit against it. This makes e-invoicing compliance not just the issuer's problem but something that directly affects every customer receiving those invoices.
Who this applies to
| Question | Answer |
|---|---|
| What turnover figure is tested? | Aggregate annual turnover, including taxable, exempt and export supplies, across every GSTIN registered under the same PAN |
| Which years count? | Any financial year from 2017-18 onwards — not only the current or most recent year |
| What if turnover crossed ₹5 crore in the past but is lower now? | The obligation still applies — once triggered, it doesn't switch off if turnover later falls |
| When does it start once newly crossed? | Generally from the start of the next financial year after the year in which the threshold was crossed |
Categories exempt regardless of turnover
- Banks and non-banking financial companies (NBFCs).
- Insurers.
- Goods transport agencies supplying transport of goods by road.
- Passenger transport service providers.
- Multiplex cinema operators, for admission-ticket supplies.
- Special Economic Zone units (SEZ developers are not exempt in the same way — this distinction is confirmed case by case).
Setting up e-invoicing, step by step
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Applicability confirmation
Aggregate turnover is checked across every GSTIN under the PAN and across every financial year since 2017-18, not just the current year — this determines whether the obligation applies at all.
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IRP registration
The business registers on the e-invoice portal, linking its GSTIN for invoice reporting.
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Billing system integration
Accounting or billing software is configured to generate invoices in the required schema and transmit them to the IRP, either directly through an API integration or via a GST Suvidha Provider.
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Process changes for billing staff
Staff issuing invoices need to understand that an invoice isn't complete, or legally valid for GST purposes, until it carries the IRN and QR code returned by the IRP — this is a genuine process change, not just a software update.
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Ongoing compliance monitoring
For businesses at or above ₹10 crore turnover, the 30-day reporting window is tracked to ensure invoices aren't reported to the IRP after the deadline, which would make them non-compliant even if issued correctly in every other respect.
Practical notes from our engagements
- Applicability checked only against the current year's turnover. Because any year since 2017-18 counts, a business that had one unusually large year some time ago can already be covered, even if recent turnover has been comfortably below ₹5 crore.
- B2C invoices mistakenly run through the e-invoicing process. E-invoicing applies to B2B, export and SEZ supplies — B2C retail invoices don't go through the IRP, and treating them the same way adds unnecessary friction to routine billing.
- 30-day reporting window missed for businesses above ₹10 crore. This is a genuinely separate rule from the ₹5 crore applicability threshold, and applies only once turnover reaches ₹10 crore — invoices reported late are treated as invalid even though the business is otherwise compliant.
- Buyers not told about a new e-invoicing obligation. Once e-invoicing starts, invoices without an IRN aren't valid for the buyer's input credit — flagging the change to regular customers avoids confusion and credit disputes in the first billing cycle after crossing the threshold.
How we handle e-invoicing setup
We check applicability against the full turnover history since 2017-18 across every GSTIN under the PAN, not just current-year figures, since that's the actual legal test. Where e-invoicing newly applies, we work through the billing-system and process changes needed before the obligation takes effect, rather than after the first non-compliant invoice has already gone out.
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Frequently asked questions
What is the current e-invoicing turnover threshold?
₹5 crore aggregate annual turnover, in force since 1 August 2023. It's tested against any financial year since 2017-18, not just the current year.
If my turnover drops below ₹5 crore next year, do I still need to e-invoice?
Yes — once the threshold is crossed in any year, the obligation is permanent and doesn't switch off if turnover later falls.
Does e-invoicing apply to retail sales to individual customers?
No — e-invoicing covers B2B invoices, exports and supplies to SEZs. B2C retail invoices are outside its scope.
Is there a deadline for reporting an invoice to the IRP after it's issued?
For businesses with turnover of ₹10 crore or more, yes — invoices must be reported within 30 days of issuance. Below that turnover level, this specific 30-day rule doesn't apply, though invoices should still be reported promptly.
What happens if I issue an invoice without going through the e-invoicing process, when I'm required to?
It isn't treated as a valid tax invoice under GST law, and the recipient can't claim input tax credit against it — a real, practical problem for the buyer, not only a compliance technicality for the seller.
Is turnover tested per GSTIN or for the whole company?
Aggregate annual turnover is computed on a PAN-wide basis, combining every GSTIN registered under that PAN — not tested separately for each individual registration.
Are banks and insurance companies required to e-invoice?
No — banks, NBFCs, insurers, goods transport agencies, passenger transport operators and multiplex cinemas are exempt from e-invoicing regardless of turnover.