GST E-Invoicing: Who Needs It and What Happens If You Skip It

If your business turnover exceeds Rs 5 crore in any financial year from 2017-18 onwards, you are required to generate e-invoices for all B2B supplies and exports. This requirement has been in effect since 1 August 2023, when the threshold was lowered from Rs 10 crore to Rs 5 crore under GST Notification No. 10/2023-Central Tax.

WHAT IS AN E-INVOICE
An e-invoice is not a new type of invoice. It is your regular GST invoice reported electronically to the Invoice Registration Portal (IRP). When you upload invoice details to the IRP, it validates the data and generates a unique Invoice Reference Number (IRN) along with a QR code. The IRN is what makes your invoice a valid e-invoice under GST law.

The IRP also auto-populates your GSTR-1 return with the reported invoice data, reducing manual filing effort.

WHO IS EXEMPT
Even if your turnover crosses Rs 5 crore, certain categories of taxpayers are exempt from e-invoicing:
- Special Economic Zone (SEZ) units
- Insurance companies
- Banking companies and financial institutions (including NBFCs)
- Goods Transport Agencies (GTAs)
- Passenger transport service providers
- Government departments and local authorities
- Multiplex cinema admission suppliers
- Input Service Distributors (ISDs)
- OIDAR service providers registered under Rule 14

These exemptions are specified through various CBIC notifications issued under the CGST Act.

CONSEQUENCES OF NON-COMPLIANCE
1. Invoice treated as invalid under Rule 48(5) of the CGST Rules. An invoice issued without a valid IRN shall not be treated as a valid invoice.
2. Your buyer s Input Tax Credit claim may be jeopardised if the invoice lacks a valid IRN, as tax authorities can deny the credit during assessment.
3. Penalty under Section 122 of the CGST Act for issuing incorrect invoices, along with potential liability for the tax amount involved.

TIME LIMIT FOR GENERATION
From 1 April 2025, businesses with aggregate annual turnover of Rs 10 crore and above must generate e-invoices within 30 days from the date of the invoice. After this window, the IRP will reject the upload. For businesses between Rs 5 crore and Rs 10 crore, there is currently no strict time limit, but generating invoices promptly is advisable.

PRACTICAL TIP
Integrate your billing software directly with the IRP through API connectivity. This ensures every B2B invoice automatically gets an IRN at the time of creation, eliminating the risk of missed compliance.