Introduction
E-invoicing under the Goods and Services Tax (GST) regime is a transformative step toward digitization, transparency, and real-time compliance. It mandates specified taxpayers to report their B2B invoices to the Invoice Registration Portal (IRP) and obtain a unique Invoice Reference Number (IRN).
This article explains who is required to generate e-invoices, the applicable turnover thresholds, exemptions, and the consequences of non-compliance as per the latest GST rules and notifications.
Statutory Provision
The legal basis for e-invoicing lies in Rule 48(4) of the CGST Rules, 2017. As per this rule, the Government has notified specific classes of registered persons who are mandatorily required to generate e-invoices for:
- Business-to-Business (B2B) supplies
- Exports
- Supplies to SEZs (where applicable)
- Credit and debit notes linked to the above
E-invoicing has been implemented in phases based on aggregate turnover.
Current Threshold for Mandatory E-Invoicing (As of 2025)
As per the latest update effective 1st August 2023, e-invoicing is mandatory for all registered persons having aggregate turnover exceeding ₹5 crores in any financial year from 2017-18 onwards.
- Turnover is PAN-based, not GSTIN-specific.
- All GSTINs under the same PAN must comply if the total turnover exceeds ₹5 crores.
Transactions Where E-Invoicing is Applicable
E-invoicing applies to the following documents issued by registered persons above the threshold:
- Tax invoices for B2B transactions
- Export invoices
- Credit notes and debit notes related to B2B or export invoices
- Supply to SEZ units or developers (with some exclusions)
Note: B2C invoices (issued to unregistered persons) are not covered under e-invoicing as of now.
Categories Exempt from E-Invoicing
Even if the turnover threshold is breached, the following registered persons are exempted from e-invoicing:
- Banks, financial institutions, and NBFCs
- Goods Transport Agencies (GTAs)
- Passenger transport service providers
- Cinema halls issuing tickets via multiplex screens
- SEZ Units (However, SEZ Developers may be covered)
- Government departments and local authorities
- Persons registered only for TDS under Section 51
- OIDAR service providers (located outside India supplying to unregistered persons in India)
These exemptions are notified under various CBIC Notifications and are updated from time to time.
Consequences of Not Generating E-Invoice (When Required)
Failure to generate a valid e-invoice where mandated can result in:
- The invoice being treated as invalid under Section 31 of the CGST Act
- Denial of Input Tax Credit (ITC) to the recipient
- Penalties under Section 122 for not issuing a proper tax invoice
- Possible audit, scrutiny, or assessments by GST authorities
Hence, non-compliance has both financial and legal implications for both the supplier and the recipient.
Summary Table – Applicability of E-Invoicing
| Particulars | Applicability |
|---|---|
| Aggregate Turnover > ₹5 Cr (any FY from 2017-18 onwards) | E-Invoicing Mandatory |
| B2B Supplies | Covered |
| Exports | Covered |
| B2C Supplies | Not Covered |
| Credit/Debit Notes (B2B/Export) | Covered |
| SEZ Units | Exempt |
| Banks, NBFCs, GTAs, Government Entities | Exempt |
Final Thoughts
E-invoicing is now a core compliance requirement under GST for mid-to-large businesses. With real-time reporting to the GST portal, it promotes accuracy, curbs tax evasion, and ensures seamless flow of Input Tax Credit.
What Should Businesses Do?
- Evaluate turnover PAN-wise annually (including FY 2017–18 onwards)
- Integrate accounting systems with the IRP (either directly or through GSP/API tools)
- Train accounting staff for accurate and timely e-invoice generation
- Maintain real-time compliance to avoid disputes, audits, or penalties
For continued GST insights, compliance alerts, and expert guidance, stay connected with Stox N Tax.
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