E-invoicing
What E-invoicing means, how it works, a worked example, the mistakes we see and the questions founders ask.
DefinitionE-invoicing is the GST rule requiring businesses with turnover above ₹5 crore to register every B2B invoice on the Invoice Registration Portal, which returns a unique IRN and QR code.
Once your aggregate turnover in any year since 2017-18 crosses ₹5 crore, every B2B invoice, credit note and debit note must be reported to an Invoice Registration Portal before or at issue. The portal validates the data, assigns an Invoice Reference Number and a QR code, and pushes the details into your GSTR-1 and the buyer's GSTR-2B automatically. Invoices to consumers are exempt, but must carry a QR code above ₹500 crore turnover. You meet e-invoicing through your billing software, which connects to the portal through an API. What it means for you: an invoice without an IRN is not a valid tax invoice and your customer cannot claim credit on it, so the switch has to happen on the first day of the new threshold, with software tested in advance.
How E-invoicing works
E-invoicing does not mean invoicing by email. It means that before a B2B invoice, export invoice, credit note or debit note is issued, its details are uploaded to an Invoice Registration Portal, which validates them, assigns a unique Invoice Reference Number and a signed QR code, and passes the data to the GST system and the e-way bill system. The invoice is valid only with the IRN and QR code printed on it.
The threshold has stepped down from ₹500 crore in 2020 to ₹5 crore of aggregate turnover in any financial year since 2017-18, from 1 August 2023. A business that ever crossed ₹5 crore stays in the net. Businesses with turnover of ₹10 crore or more must report invoices to the IRP within 30 days of the invoice date, a rule extended from April 2025; a late report is rejected and the invoice cannot be made valid.
The upside is that reported invoices flow straight into GSTR-1 and the customer's GSTR-2B, so the matching problems of manual reporting fall away. Cancellation is possible on the IRP within 24 hours; after that the invoice is cancelled only through a credit note.
A Surat textile trader crosses ₹5 crore of turnover in March. From the next 1 April it must e-invoice every B2B sale. Its billing software connects to an IRP; each invoice is registered at the moment of issue, the IRN and QR code print on the PDF, and the data appears in its GSTR-1 draft without re-keying. A B2C sale to a walk-in customer needs no IRN but, once turnover crosses ₹500 crore, would need a dynamic QR code.
Mistakes we see with E-invoicing
- Issuing invoices without an IRN after crossing the threshold, so customers cannot claim the credit and the invoices are invalid under the rules.
- Reporting an invoice to the IRP weeks after the date, which fails the 30-day limit for businesses above ₹10 crore.
- Cancelling an IRN after 24 hours by deleting the invoice in the software, instead of issuing a credit note.
Last updated 19 October 2026. Checked against the MCA, GST, Income-tax and Trade Marks rules in force for October 2026.
Where you will meet this term
Questions founders ask about E-invoicing
Who must issue e-invoices?
Every registered business with aggregate turnover above ₹5 crore in any financial year since 2017-18, for B2B supplies, exports, credit notes and debit notes. SEZ units, banks, insurers, transport agencies and a few others are exempt.
Does e-invoicing apply to B2C sales?
No IRN is needed for supplies to unregistered customers. A dynamic QR code on B2C invoices is required only above ₹500 crore turnover.
Can an e-invoice be cancelled?
On the IRP within 24 hours of generation, as a whole (no partial cancellation). After that, the invoice stands and is adjusted through a credit note, which is itself reported to the IRP.