E-Invoice Now Mandatory for Rs 5 Crore+ Businesses: What You Need to Do

The e-invoicing threshold has dropped from Rs 10 crore to Rs 5 crore. If your business crossed the Rs 5 crore turnover mark in FY 2025-26, you are now required to generate e-invoices for all B2B supplies through the Invoice Registration Portal (IRP).

This is not a future compliance requirement. It is effective now. Here is what you need to do.

What Changed

Threshold Reduction

Previously, e-invoicing was mandatory for businesses with AATO exceeding Rs 10 crore. From April 1, 2026, the threshold dropped to Rs 5 crore. This brings a large new segment of mid-sized businesses into the e-invoicing framework for the first time.

30-Day Invoice Validity Rule

Invoices submitted to the Invoice Registration Portal (IRP) after 30 days from the invoice date are now considered invalid for ITC purposes. Your buyer cannot claim input tax credit on invoices that were not uploaded to IRP within 30 days.

7-Day Upload Enforcement

The GST portal now enforces a 7-day invoice upload deadline. While the 30-day rule determines ITC validity, the 7-day window is the recommended upload timeline. Invoices uploaded between 7 and 30 days may face system warnings.

Who Is Affected

You must comply with e-invoicing if:

• Your AATO exceeded Rs 5 crore in any financial year from FY 2017-18 onwards (the threshold is based on the highest turnover achieved, not just the most recent year)
• You are a registered taxpayer under GST (not under composition scheme)
• You issue B2B invoices, B2B credit notes, or B2B debit notes

You are exempt from e-invoicing if:

• You are under the composition scheme
• You are a banking company or financial institution
• You are an insurance company or NBFC
• You are a Special Economic Zone (SEZ) unit
• You are a government department with TDS registration only

Step-by-Step Setup for Newly Eligible Businesses

Step 1: Verify Your AATO

Log in to the GST portal and check your aggregate turnover for FY 2025-26 and prior years. AATO includes turnover across all GSTINs under the same PAN. If any single year exceeds Rs 5 crore, e-invoicing applies.

Step 2: Register on the Invoice Registration Portal

Visit the IRP portal (einvoice1.gst.gov.in). Registration is automatic for GSTINs that meet the threshold. Log in with your GST credentials to verify your registration status.

If registration is not active, submit a registration request through the portal. Approval is typically within 24 to 48 hours.

Step 3: Generate API Credentials

For automated e-invoice generation, you need API credentials from IRP:

1. Log in to the IRP portal
2. Navigate to API Registration
3. Generate your Client ID and Client Secret
4. Note your authentication endpoint URL

These credentials are used by your billing software to communicate with IRP.

Step 4: Integrate with Your Billing Software

Most popular accounting and ERP software packages support e-invoicing integration. Contact your software provider to:

• Enable the e-invoicing module
• Enter your IRP API credentials
• Configure automatic IRN (Invoice Reference Number) generation
• Set up QR code printing on invoices

If your software does not support e-invoicing, you can use the IRP portal's bulk upload feature or the NIC e-invoice tool as an interim solution.

Step 5: Test with Sandbox Environment

Before going live, test your integration using the IRP sandbox (einvoice1.gst.gov.in sandbox mode):

• Generate test invoices
• Verify IRN generation
• Check QR code accuracy
• Confirm cancel and amend workflows

Step 6: Go Live

Once testing is complete:

• Switch from sandbox to production mode
• Generate e-invoices for all B2B supplies from your go-live date
• Ensure every invoice is uploaded within the 7-day recommended window

The 30-Day ITC Validity Rule

This is the compliance trap that will catch many businesses. Under the new enforcement:

• An invoice must be uploaded to IRP within 30 days of the invoice date
• If uploaded after 30 days, the invoice is technically valid as a tax document but your buyer cannot claim ITC on it
• This means your buyer will demand that you upload invoices promptly, or they may refuse to accept delayed invoices

Example

You issue an invoice dated April 5, 2026. If you upload it to IRP on May 10, 2026 (35 days later), your buyer loses the ability to claim ITC on that invoice. They will likely ask you to cancel and reissue the invoice with a current date, which creates its own complications.

How to Avoid This

• Upload invoices to IRP on the same day they are issued
• Set up automated e-invoice generation so invoices are uploaded in real time
• Monitor your IRP dashboard weekly for any pending or failed uploads
• Train your billing team on the 30-day rule

Common Compliance Traps

1. Forgetting Credit Notes

E-invoicing applies to credit notes and debit notes too, not just invoices. Every B2B credit note must be uploaded to IRP with its own IRN.

2. Branch-Level Compliance

The Rs 5 crore threshold applies at the PAN level (aggregate across all GSTINs). But e-invoicing compliance is required at each GSTIN/branch level. If your business has multiple branches, each branch must generate e-invoices.

3. Incorrect HSN Codes

IRP validates HSN codes on invoices. If you use an incorrect or incomplete HSN code, the invoice will be rejected by IRP.

4. Not Cancelling Within 24 Hours

If you need to cancel an e-invoice, it must be done within 24 hours on the IRP portal. After 24 hours, you cannot cancel on IRP. You must issue a credit note instead.

5. Missing Mandatory Fields

IRP requires specific fields: supplier GSTIN, buyer GSTIN, invoice number, date, HSN code, taxable value, tax amounts, and place of supply. Missing any field causes rejection.

Impact on Your Buyers

Your buyers are directly affected by your e-invoicing compliance:

Non-compliance does not just affect you. It affects your entire supply chain.

Penalties for Non-Compliance

• Issuing a regular invoice instead of an e-invoice: Penalty of Rs 25,000 per invoice under Section 122 of the CGST Act
• Incorrect e-invoice: Penalty equivalent to the tax amount on the invoice or Rs 25,000, whichever is higher
• Repeated non-compliance may trigger GST audit or investigation

Let Tax Garden Handle Your E-Invoicing

Setting up e-invoicing for the first time involves IRP registration, software integration, team training, and ongoing monitoring. Tax Garden's Compliance Standard plan covers end-to-end e-invoicing setup and monthly compliance management.

Frequently Asked Questions

How do I check if my business needs to generate e-invoices?

Check your aggregate annual turnover across all GSTINs under the same PAN. If AATO exceeded Rs 5 crore in any financial year from FY 2017-18 onwards, e-invoicing is mandatory from April 1, 2026.

What is the difference between the 7-day and 30-day rule?

The 7-day rule is the recommended upload window with system warnings for delays. The 30-day rule is the hard deadline: invoices uploaded after 30 days are invalid for ITC claims by your buyer.

Does e-invoicing apply to B2C transactions?

No. E-invoicing is mandatory only for B2B supplies, B2B credit notes, and B2B debit notes. B2C invoices, exports, and SEZ supplies follow separate rules.

Can I generate e-invoices manually without software?

Yes. You can use the IRP portal's web interface or the NIC offline tool to generate e-invoices one at a time. However, this is practical only for businesses with low invoice volumes.

What happens if IRP is down when I try to upload?

IRP has multiple redundant portals (einvoice1.gst.gov.in through einvoice10.gst.gov.in). If one portal is down, try another. If all portals are unavailable, document the downtime and upload as soon as service resumes.