GST E-Invoice in 2026: ₹5 Crore Threshold, Rules and How to Generate

Quick answer box

E-invoicing is an online way to create a GST invoice. The invoice is sent to a government portal. The portal returns an Invoice Reference Number (IRN) and a QR code. From 1 August 2023 any business whose aggregate annual turnover (AATO) has crossed ₹5 crore in any financial year since FY 2017-18 must use e-invoicing. The rule stays for that business forever, even if turnover falls later.

What e-invoicing actually means

E-invoicing does not replace your ERP or accounting software. Your software prepares the invoice in a standard JSON format. The JSON file is uploaded to an Invoice Registration Portal (IRP). The IRP checks the data for errors. If everything is fine the IRP creates an Invoice Reference Number (IRN) and a signed QR code. Only after you receive the IRN and QR code can the document be called a valid tax invoice. The government only authenticates the data you send; it does not create the invoice itself.

Who has to generate e-invoices

• Turnover rule – If the total turnover of all GSTINs under a single PAN has ever been above ₹5 crore in any FY from 2017-18 onward, the business must use e-invoicing.
• PAN-level aggregation – The turnover of every GSTIN linked to the same PAN is added together. The rule looks at the combined amount, not each GSTIN separately.
• Once covered, always covered – Once the threshold is crossed, the requirement does not end. Even if the business later drops below ₹5 crore, it must continue e-invoicing.
• Next-FY trigger – If the turnover crosses the limit in the current FY, e-invoicing starts from the first day of the next financial year.

Worked example

ABC Traders operates in three states: Maharashtra, Karnataka and Gujarat. All three locations use different GSTINs but the same PAN (AAAPL1234C).

FY	Maharashtra turnover	Karnataka turnover	Gujarat turnover	Aggregate (PAN)
2023-24	₹1.80 cr	₹1.20 cr	₹1.10 cr	₹4.10 cr
2024-25	₹2.00 cr	₹1.30 cr	₹1.30 cr	₹4.60 cr
2025-26	₹2.50 cr	₹1.50 cr	₹1.30 cr	₹5.30 cr

In FY 2025-26 the aggregate turnover under the PAN exceeds ₹5 crore. Therefore, from 1 April 2026 (the start of the next FY) ABC Traders must generate every B2B invoice through an IRP and obtain an IRN. The rule stays even if the next year the aggregate falls back to ₹4 crore.

The threshold timeline

Date of change	Turnover threshold
1 Oct 2020	above ₹500 cr
1 Jan 2021	above ₹100 cr
1 Apr 2021	above ₹50 cr
1 Apr 2022	above ₹20 cr
1 Oct 2022	above ₹10 cr
1 Aug 2023	above ₹5 cr (current)

The threshold has been falling steadily. The present level of ₹5 crore applies to all businesses that meet the turnover test.

Which invoices are covered

Covered invoices (must have IRN)	Not covered (no IRN needed)
B2B supplies	B2C supplies
Export of goods/services	Nil-rated or exempt supplies
Deemed export	Imports
B2G supplies (government)	High-sea sales
Debit notes	Delivery challans
Credit notes	Bills of supply
	ISD invoices

Only the listed types need an IRN. All other documents can be issued in the usual way.

Who is exempt

Even if turnover is above ₹5 crore, the following entities do not have to adopt e-invoicing:

1. SEZ units – the developer of the SEZ is still required, but the units themselves are exempt.
2. Banks, NBFCs, and financial institutions – they remain outside the mandate.
3. Insurance companies – they are not required to use e-invoices.
4. Goods transport agencies (GTAs) – their transport services are exempt.
5. Passenger transport providers – buses, trains, airlines etc. are excluded.
6. Multiplex cinema admission services – ticket sales are not covered.
7. Government departments and local authorities – they are exempt from the requirement.
8. OIDAR service providers – online information and database access or retrieval services are exempt under Rule 14.

How to generate an e-invoice

1. Create the invoice in your ERP or accounting software. The software must be able to export the invoice in the prescribed JSON schema.
2. Validate the JSON locally (most modern ERP tools do this automatically).
3. Log in to the IRP (einvoice1.gst.gov.in) using your authorized user ID and password.
4. Upload the JSON file to the IRP.
5. IRP validation – the portal checks the data for GST compliance, GSTIN format, tax rates, etc.
6. Receive the IRN and QR code – if the data passes, the IRP returns an IRN (a 64-character alphanumeric code) and a signed QR code image.
7. Attach IRN & QR to the invoice – print the QR code on the physical invoice or embed it in the PDF.
8. Save the response – keep the IRN, QR code, and the JSON copy for your records and for GSTR-1 filing.

The whole process takes a few seconds if the ERP is integrated with the IRP API. Manual upload works as well but may add a few minutes.

Cancellation and the 24-hour rule + 30-day reporting rule for Rs 10 cr+

• An e-invoice can be cancelled within 24 hours of its issue date through the IRP. After 24 hours, cancellation through the portal is not possible – corrections must be made by issuing a credit note (which is itself reported to the IRP).
• From 1 April 2025, any taxpayer whose AATO is ₹10 crore or more must report every invoice, debit note and credit note to the IRP within 30 days of the document date. This is an additional reporting window on top of the real-time IRN generation.

What changed vs what stayed the same

What changed
– The turnover threshold fell to ₹5 crore (effective 1 Aug 2023).
– For big taxpayers (AATO >= ₹10 crore) a 30-day reporting window was added from 1 Apr 2025.

What stayed the same
– The requirement to obtain an IRN and a QR code before issuing a B2B invoice.
– The scope remains limited to B2B, export, deemed export, B2G and debit/credit notes.
– The IRP/IRN/QR flow is unchanged.

Penalties and real impact

If you issue a B2B invoice without a valid IRN, the invoice is considered invalid under Rule 48(4) of the CGST Rules, 2017. The buyer cannot claim Input Tax Credit (ITC) on that purchase. The supplier may face penalties for non-compliance. It is therefore essential to have the IRN ready before the invoice leaves your system.

The impact is real: without a valid IRN the buyer cannot claim Input Tax Credit (ITC) on that purchase, which often triggers disputes between the two parties. Preparing early, testing the ERP-IRP integration, and training staff reduces the risk.

FAQ

1. Is e-invoice mandatory for all businesses in India?
   No. Only businesses whose PAN-level aggregate turnover has ever crossed ₹5 crore since FY 2017-18 must use e-invoicing. Certain categories such as banks, SEZ units and government bodies are also exempt.

2. What is the e-invoice turnover limit in 2026?
   The limit is ₹5 crore. Any business that has exceeded that amount in any FY since 2017-18 must generate e-invoices.

3. What happens if I issue a B2B invoice without an IRN?
   The invoice is treated as invalid under Rule 48(4). The buyer’s ITC is blocked and the supplier may attract penalties.

4. Can I cancel or edit an e-invoice?
   You can cancel an e-invoice within 24 hours of issue through the IRP. After that you cannot edit or cancel it; issue a credit note for corrections.

5. Does e-invoicing apply to B2C sales?
   No. B2C supplies, nil-rated or exempt supplies, and many other categories are excluded from the e-invoice requirement.

6. What is the 30-day e-invoice rule?
   From 1 April 2025, taxpayers with AATO ₹10 crore or more must report all invoices, debit notes and credit notes to the IRP within 30 days of the document date, – the IRP rejects documents reported after the 30-day window.

E-invoice vs a normal GST invoice

Point	Normal GST invoice	E-invoice
IRN/QR	Not required	Must be generated from the IRP before issue
GSTR-1	Entered manually	Auto-populated from IRP data
E-way bill	Part A filled by you	Part A auto-filled from the e-invoice
Validity	Valid once issued	Invalid without a valid IRN (Rule 48(4))

The e-invoice does not change what you charge – tax rate, HSN and GSTIN rules stay the same. It only changes how the invoice is validated and reported.

Common mistakes to avoid

• Checking only the current year’s turnover. The test looks at every FY since 2017-18. A single Rs. 5 crore year in the past is enough.
• Forgetting PAN-level aggregation. Three GSTINs under one PAN must be added together; per-state checks miss this.
• Issuing the invoice first and generating the IRN later. The IRN must come before the invoice is shared with the buyer.
• Missing the 30-day window. With AATO of Rs. 10 crore or more, documents reported after 30 days are rejected.
• Treating all B2G sales as exempt. B2G supplies are covered; it is government departments themselves that are exempt as sellers.

Official sources

• CBIC Notification No. 10/2023-Central Tax (dated 10 May 2023) – www.cbic.gov.in
• Rule 48(4), CGST Rules, 2017
• IRP portal: einvoice1.gst.gov.in
• GST portal: www.gst.gov.in

This article provides general information only. It is not tax advice. Always check the latest CBIC notifications before taking action.