Who needs to generate GST e-invoice in FY 2025-26?

Businesses with aggregate turnover exceeding ₹5 Crore in any financial year from FY 2017-18 onwards must generate e-invoices for all B2B supplies, exports, and SEZ supplies (with IGST payment). The ₹5 Crore threshold has been in effect since 1 August 2023 (Notification 10/2023-CT). The threshold is PAN-level across all GSTINs. Once triggered in any past FY, the obligation applies permanently unless the threshold is revised. E-invoicing is NOT required for B2C supplies, banking, insurance, GTA, passenger transport, and SEZ supplies under LUT/bond (without IGST).

What is the e-invoice process and what is an IRN?

E-invoice is a JSON of invoice data uploaded to the Invoice Registration Portal (IRP). The IRP validates the data, assigns a unique 64-character Invoice Reference Number (IRN), and returns a digitally signed QR code. This IRN + QR code must be printed on the invoice before it is sent to the buyer. The IRP auto-populates GSTR-1 Table 4A from the e-invoice data and also auto-generates Part A of the e-way bill. You can generate e-invoices directly on the IRP portal (einvoice1.gst.gov.in) or via accounting software integration (Tally, Zoho, Busy, etc.) or through GST Suvidha Providers (GSPs).

What is the penalty for not generating GST e-invoice?

Issuing a B2B invoice without a valid IRN (when e-invoicing is mandatory) attracts a penalty under Section 122(1)(ii) of the CGST Act. The penalty is the higher of: (a) ₹10,000 per invoice, or (b) 100% of the GST amount on that invoice, whichever is higher. Additionally, the recipient of a non-e-invoiced invoice cannot claim Input Tax Credit (ITC) on it, as the invoice will not auto-populate in their GSTR-2B. This creates commercial pressure on suppliers — buyers may refuse payments or future orders until valid e-invoices are issued.

What are the benefits of GST e-invoicing?

GST e-invoicing provides three major benefits: (1) GSTR-1 auto-population — e-invoice data auto-fills Table 4A of GSTR-1, eliminating manual data entry and reducing errors; (2) E-way bill Part A auto-generation — for goods consignments exceeding ₹50,000, Part A of the e-way bill is automatically generated from e-invoice data; and (3) ITC reconciliation — buyer's GSTR-2B is auto-updated, reducing ITC mismatches and disputes. Additionally, the digitally signed IRN provides a tamper-proof audit trail, and the IRP validates GSTIN, invoice format, and duplicate detection at upload time.

Can I cancel a GST e-invoice? What is the time limit?

Yes, e-invoices can be cancelled but with strict time limits. Within 24 hours of IRN generation: You can cancel the e-invoice directly on the IRP portal. The cancellation is real-time and the IRN is immediately invalidated. Beyond 24 hours: Cancellation must be done on the GST portal (not the IRP). However, this is only possible before: (a) the e-way bill has been generated based on the IRN, or (b) the IRN has been reported in GSTR-1. Once an e-way bill is generated or the invoice is reported in GSTR-1, the e-invoice cannot be cancelled. In practice, you would issue a credit note under Section 34 of the CGST Act to reverse the supply.

GST E-Invoice Calculator India — FY 2025-26

Check if GST e-invoicing is mandatory for your business. Enter your annual turnover and transaction type to get a clear YES/NO verdict with threshold analysis, penalty exposure (Section 122), and estimated time & cost savings from e-invoice adoption. Current threshold: ₹5 Crore (effective 1 Aug 2023). Updated for FY 2025-26.

Check whether e-invoicing is mandatory for your business and transaction type

Annual aggregate turnover (highest FY from 2017-18)

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Enter your highest annual turnover in any FY from FY 2017-18 onwards. Threshold is ₹5 Crore.

Transaction type

Type of supply determines e-invoice applicability regardless of turnover

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How to Use This Calculator

Do I Need E-Invoice? tab

Enter your annual aggregate turnover (highest figure in any financial year from FY 2017-18 onwards, across all GSTINs). Select your transaction type — B2B, export, SEZ, B2C, or exempt. The calculator gives a clear mandatory YES/NO verdict with the legal basis, threshold analysis, phase-in history, and penalty risk.

E-Invoice Savings tab

Enter your monthly invoice volume, current manual processing time, expected e-invoice processing time, and accountant hourly cost. See monthly and annual time savings (in hours), cost savings in rupees, and a summary of zero-cost compliance benefits: GSTR-1 auto-population, e-way bill Part A auto-generation, and ITC reconciliation improvements.

Penalty Risk tab

Enter the number of non-compliant invoices (B2B invoices issued without IRN when mandatory) and average GST per invoice. The calculator applies Section 122(1)(ii) — penalty is the higher of ₹10,000 per invoice OR 100% of GST — and shows your total penalty exposure plus ITC denied to your buyers.

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The Formula

E-invoice compliance involves three key calculations: eligibility (turnover threshold), time & cost savings, and penalty risk.

E-Invoice Eligibility:
Mandatory if: Aggregate Turnover (any FY from 2017-18) > ₹5 Crore
AND Transaction Type = B2B or Export or SEZ (with IGST)
NOT required for: B2C, exempt/nil-rated, SEZ under LUT/bond, banking/insurance/GTA

Time & Cost Savings:
Time saved per invoice = Manual time (min) − E-invoice time (min)
Monthly time saved = Time saved per invoice × Monthly invoices
Monthly cost saved = (Monthly time saved ÷ 60) × Accountant hourly rate
Annual cost saved = Monthly cost saved × 12

Penalty (Section 122(1)(ii) CGST Act):
Fixed penalty = ₹10,000 × Non-compliant invoices
Tax-based penalty = 100% of GST × Non-compliant invoices
Actual penalty = max(Fixed penalty, Tax-based penalty)
ITC denied to buyers = Total GST on non-compliant invoices

The ₹5 Crore threshold uses aggregate turnover — the combined turnover across all business verticals and GSTINs under the same PAN, including taxable, exempt, and export supplies, but excluding inward supplies on which tax is payable under reverse charge.

Example

Priya — Manufacturing business with ₹8 Crore turnover, 200 B2B invoices/month

Priya runs a manufacturing unit (Pvt Ltd). Her FY 2024-25 turnover was ₹8 Crore. She generates 200 B2B invoices per month. Her accountant currently spends 30 minutes per invoice manually; e-invoicing would reduce this to 5 minutes.

Step 1: E-Invoice Eligibility Check

Annual turnover₹8 Crore (above ₹5 Cr threshold)

Transaction typeB2B (supply to registered businesses)

E-invoice mandatory?YES — MANDATORY

IRN requiredYes — before issuing invoice

Same business, B2C salesNO — B2C is exempt from e-invoicing

Step 2: Monthly Savings Calculation

Monthly B2B invoices200

Time saved per invoice30 min − 5 min = 25 min

Total time saved/month200 × 25 min = 5,000 min = 83.3 hrs

Accountant cost (₹300/hr)83.3 × ₹300 = ₹25,000/mo

Annual cost saved₹3,00,000/yr

GSTR-1 auto-population200 invoices auto-filled — zero data entry

Step 3: Penalty if Non-Compliant (50 invoices)

Non-compliant invoices50 (issued without IRN)

Average GST per invoice₹18,000

Fixed penalty (₹10K each)50 × ₹10,000 = ₹5,00,000

Tax penalty (100% of GST)50 × ₹18,000 = ₹9,00,000

Applicable penalty (higher)₹9,00,000

ITC denied to buyers₹9,00,000 (buyers cannot claim ITC)

Priya's e-invoicing saves ₹25,000/month and eliminates manual GSTR-1 filing for 200 invoices. Non-compliance on just 50 invoices exposes her to ₹9 Lakh in penalties plus her buyers lose ₹9 Lakh in ITC.

E-Invoice Threshold History & Applicability

▶ Threshold Phase-in Timeline (Oct 2020 → Aug 2023)

Phase	Effective Date	Threshold	Notification
Phase 1	1 Oct 2020	₹500 Crore	Notification 13/2020-CT
Phase 2	1 Jan 2021	₹100 Crore	Notification 88/2020-CT
Phase 3	1 Apr 2021	₹50 Crore	Notification 05/2021-CT
Phase 4	1 Apr 2021	₹20 Crore	Notification 01/2022-CT
Phase 5	1 Oct 2022	₹10 Crore	Notification 17/2022-CT
Phase 6 (Current)	1 Aug 2023	₹5 Crore	Notification 10/2023-CT
Phase 7 (Expected)	Not yet notified	₹1 Crore (proposed)	Pending notification

Note: The ₹1 Crore threshold has been discussed in GST Council meetings but has NOT been officially notified as of FY 2025-26 (March 2026). Do not act on rumours; check cbic.gov.in for official notifications.

▶ Exempt Categories — Who Does NOT Need E-Invoice

Category	Reason for Exemption
B2C supplies	Supplies to unregistered consumers are outside e-invoice scope. IRP rejects B2C e-invoices.
Exempt / Nil-rated	No GST implications; e-invoice not required for non-taxable supplies.
SEZ (without IGST / under LUT)	Zero-rated under LUT/bond; specifically exempted via Notification 61/2020-CT.
Banking companies, NBFCs	Excluded per CBIC notification; their volume and type of transactions are handled separately.
Insurance companies	Specifically excluded; policy documents serve as invoice equivalents.
Goods Transport Agency (GTA)	GTA services use consignment notes; excluded from e-invoicing mandate.
Passenger transport	Bus/rail/air tickets serve as invoice-equivalent documents.
Multiplex cinema services	Excluded per CBIC notification; tickets serve as invoice-equivalent.

▶ E-Invoice Process Flow — IRN Generation Steps

Prepare invoice JSON: Create invoice in your accounting system (or use the IRP bulk upload tool) in the prescribed JSON schema (schema version 1.1).
Upload to IRP: Submit JSON to the Invoice Registration Portal (einvoice1.gst.gov.in) directly, via API, or through your accounting software / GSP integration.
IRP validation: IRP validates GSTIN, PAN match, invoice date, duplicate check, and JSON schema compliance.
IRN generation: On successful validation, IRP generates a unique 64-character IRN (hash of GSTIN + invoice number + FY + document type).
Signed QR code: IRP returns a digitally signed QR code containing key invoice parameters and the IRN.
Print on invoice: The IRN and QR code must be printed or affixed on the invoice. The QR code can be scanned by GST officers to verify authenticity.
Auto-population: IRP simultaneously pushes e-invoice data to GSTR-1 (Table 4A) and generates Part A of e-way bill (if applicable).

▶ E-Invoice Cancellation Rules

Within 24 hours of IRN generation: Cancel directly on the IRP portal. IRN is immediately invalidated. You can generate a new e-invoice with a new invoice number.

Beyond 24 hours: Cancellation must be done on the GST portal (not IRP). This is only possible if:

The e-way bill has NOT yet been generated based on this IRN
The IRN has NOT been reported in GSTR-1

If neither condition is met: You cannot cancel the e-invoice. Issue a credit note under Section 34 of the CGST Act to reverse the supply. The credit note must reference the original invoice number.

Amendment: E-invoices cannot be amended. If any field needs correction, cancel and re-issue with a new invoice number, or issue a credit/debit note for the difference.

FAQ

My turnover is ₹6 Crore this year but was ₹3 Crore last year. Do I need e-invoice? ▼

Yes, from FY 2025-26 onwards. The e-invoice threshold is checked against the highest aggregate turnover in any financial year from FY 2017-18 onwards. If your FY 2025-26 turnover crosses ₹5 Crore, you must generate e-invoices for all B2B supplies from 1 April 2025 (start of that FY) if your previous year turnover also exceeded ₹5 Cr. More precisely: if your aggregate turnover in any preceding FY from FY 2017-18 exceeded ₹5 Crore, the obligation applies. Since you crossed ₹5 Cr in FY 2025-26, e-invoice will be mandatory from FY 2026-27 and onwards. Check with your CA for the exact applicability date if you crossed the threshold mid-year.

Does e-invoice apply to all invoices or only above a certain value? ▼

If your aggregate turnover exceeds ₹5 Crore, e-invoice is mandatory for ALL B2B invoices regardless of the individual invoice value. There is no minimum invoice value threshold for e-invoicing. Even a ₹100 B2B invoice (for a registered buyer) requires an IRN. The only transaction-type exemptions are B2C, exempt/nil-rated supplies, SEZ under LUT/bond, and the notified excluded sectors (banking, insurance, GTA, passenger transport). Note: E-way bill, by contrast, has a separate threshold of ₹50,000 per consignment.

My buyer is complaining that ITC is not showing in GSTR-2B. What happened? ▼

If you are an e-invoice mandatory business and issued an invoice without an IRN, that invoice will not auto-populate in GSTR-1 and consequently will not appear in your buyer's GSTR-2B. The buyer cannot claim ITC on invoices not appearing in GSTR-2B (per GST Rule 86B and CBIC circulars). To resolve: (1) Cancel the non-IRN invoice if within 24 hours, (2) Issue a new invoice with IRN, (3) If beyond 24 hours and reported in returns, issue a credit note for the original and a fresh invoice with IRN. In the meantime, the buyer may claim ITC provisionally in their GSTR-3B, but this is subject to scrutiny and potential reversal.

Does e-invoice replace the e-way bill? ▼

No, but it simplifies e-way bill generation. E-invoice and e-way bill are separate documents serving different purposes. E-invoice is mandatory for B2B transaction recording; e-way bill is required for movement of goods above ₹50,000. However, when you generate an e-invoice, the IRP automatically creates Part A of the e-way bill using the e-invoice data (supplier, recipient, goods details, HSN, values). The transporter only needs to fill Part B (vehicle number, transport document) once the goods are loaded. This eliminates duplicate data entry. If the consignment is below ₹50,000 or the goods are exempt from e-way bill, no further action is needed after the e-invoice is generated.

What software can I use to generate e-invoices? ▼

You have multiple options: (1) Direct IRP portal (einvoice1.gst.gov.in) — suitable for low-volume businesses; manual JSON upload or web form available. (2) Accounting software with built-in e-invoice integration: Tally Prime, Zoho Books, Busy Accounting, Marg ERP, Profit Books, QuickBooks India — all generate IRN automatically when you save a B2B invoice. (3) GST Suvidha Providers (GSPs): Cleartax, GSTN-authorised GSPs offer API-based e-invoice integration for businesses with high volumes or custom ERP systems. (4) Bulk upload: For mid-volume businesses, the IRP supports Excel/JSON bulk upload for up to 1,000 invoices per request. CBIC has designated multiple accredited IRPs (NIC, Cleartax, Cygnet, IRIS, Masters India) to handle the load.

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