E-invoicing in 2026: turnover triggers and practical issues.
Our GST diagnostic.
1. The framework, in one paragraph.
E-invoicing under GST requires specified categories of taxpayers to generate invoices through the Invoice Registration Portal (IRP), which validates the invoice and returns an Invoice Reference Number (IRN) and a signed QR code. The validated invoice is then issued to the recipient with the IRN and QR embedded. The IRN flows automatically into the supplier's GSTR-1 and into the recipient's GSTR-2B, reducing reconciliation effort and standardising data.
2. Current turnover thresholds.
The e-invoicing turnover threshold has been progressively lowered since the regime started:
- Initially applied to taxpayers with aggregate turnover above ₹500 Cr.
- Lowered to ₹100 Cr, then ₹50 Cr, ₹20 Cr, ₹10 Cr, and most recently to ₹5 Cr (effective 1 August 2023).
The aggregate turnover is computed at the PAN level (across all GSTINs of the same legal entity) for any preceding financial year from 2017-18 onwards. Once a taxpayer crosses the threshold in any year, the e-invoicing obligation applies from the following financial year and continues thereafter.
Further reductions to the threshold are periodically discussed and clarifications are issued by CBIC. The current applicable threshold should be confirmed at the time of compliance.
3. Which invoices are covered.
E-invoicing applies to:
- B2B tax invoices issued by registered persons covered under the e-invoicing threshold.
- Credit and debit notes issued by such registered persons.
- Export invoices issued by such registered persons.
- SEZ supplies by such registered persons.
Excluded:
- B2C invoices (subject to QR code requirement separately - see below).
- Insurance companies, banks, financial institutions, non-banking financial companies, GTAs (goods transport agencies), passenger transportation services, and admission to multiplexes - these categories are exempt from e-invoicing even if above the threshold.
- Bill of supply (issued for exempt supplies or by composition dealers).
4. The IRN generation flow.
The technical flow:
- The supplier's ERP / invoicing system generates the invoice in the prescribed JSON format (Schema, currently INV-1 / e-Invoice Schema).
- The JSON is sent to the IRP (Invoice Registration Portal) via API or through any of the multiple IRPs notified by GSTN.
- The IRP validates the data, generates the IRN (a 64-character hash), signs the invoice, and returns the signed invoice with the IRN and the QR code.
- The supplier embeds the IRN and the QR code on the invoice issued to the recipient.
- The IRP simultaneously transmits the invoice data to the GST system and to the e-way bill system (where applicable).
The whole flow happens in seconds; the only delay is system uptime. Once IRN is generated, the invoice is considered as the "valid invoice" under GST; an invoice without IRN that should have had one is treated as not issued.
5. The B2C QR code.
Separately from e-invoicing, registered persons with aggregate turnover above ₹500 Cr are required to include a dynamic QR code on every B2C invoice (sec 31(1) and rule 46). The QR code encodes payment details (UPI ID, payment URL, beneficiary details) so the buyer can pay digitally.
The B2C QR code requirement is independent of the e-invoicing IRN framework; they apply to different invoice types and have different mechanics.
6. Common errors and fixes.
Five recurring issues that the IRP throws back:
- Duplicate IRN attempt. An IRN already exists for the same invoice number / financial year / supplier GSTIN. Either the invoice was generated earlier and is being re-pushed in error, or the invoice number is duplicated. Cancel the original (within 24 hours) or use a fresh invoice number.
- Invalid GSTIN of recipient. The recipient's GSTIN is incorrect, inactive, or has not been issued. Verify the GSTIN through the GST portal before generating.
- HSN / SAC code mismatch. The HSN code does not match the tax rate applied or is not at the required level of detail. Update the HSN master.
- Reverse charge inconsistency. The reverse-charge flag is set incorrectly relative to the recipient's status or the supply category. Verify the RCM matrix.
- Place of supply error. The place of supply, recipient state, supplier state and tax-type (IGST vs CGST+SGST) do not align. Fix the place-of-supply determination in the system.
The IRP rejects the invoice on error; no IRN is generated until the error is fixed and the JSON is re-pushed.
7. Practical issues to monitor.
- Edit / cancellation window. An e-invoice can be cancelled within 24 hours of generation. After 24 hours, only credit notes can address corrections. Build the QC / approval into the pre-IRN stage to avoid post-IRN corrections.
- Backup IRP availability. Multiple IRPs are notified; if one is down, the system should fall over to another. Most ERP integrations now handle this automatically; verify your integration does.
- System downtime escalation. If all IRPs are unavailable for an extended period, the supplier may issue invoices without IRN and generate them later, subject to the conditions notified by CBIC. Watch the CBIC notifications for such windows.
- Document the configuration. The IRP integration is configuration-heavy. Maintain a configuration document (vendor used, fallback, API credentials handling, audit trail). This becomes important during ERP changes or e-invoicing audits.
Frequently asked
Does e-invoicing apply to exports?
Yes. Export invoices issued by taxpayers above the e-invoicing threshold are covered. The IRP generates the IRN and signed invoice; the format includes the export-specific fields (currency, port code, shipping bill etc.).
What if my turnover crosses the threshold mid-year?
The e-invoicing obligation applies from the start of the next financial year, not mid-year. So a taxpayer who crosses the threshold during FY 2026-27 starts e-invoicing from 1 April 2027.
Can I generate IRN through any IRP?
Yes. Multiple IRPs are notified by GSTN; you can use any one (or use multiple as backup). Your ERP integration should be configured to handle one or more IRPs; choice depends on integration support and pricing.
Is the IRN required on the printed invoice given to the customer?
Yes. The signed invoice returned by the IRP, including the IRN and the QR code, is the valid invoice. The QR code should be printed on the physical invoice; the customer can scan it to validate the invoice.
What if the recipient is exempt from e-invoicing?
The recipient's e-invoicing status does not affect the supplier's obligation. If the supplier is above the threshold, e-invoicing applies for that supplier's outward B2B invoices regardless of the recipient's status.
