GST E-invoicing 2026: Threshold, Mandate, Generation Process

What is GST e-invoicing?

E-invoicing is a system where B2B invoices are electronically authenticated by the GSTN before being issued to the buyer. The process generates:

• Invoice Reference Number (IRN) — unique 64-character hash
• QR code containing key invoice details
• Digital signature by GSTN

The invoice is reported to the Invoice Registration Portal (IRP) and after validation, the IRN is appended to the invoice before sharing with the buyer. Without IRN, an invoice is treated as invalid for ITC purposes.

Applicability threshold (2026)

Threshold has been progressively reduced:

• October 2020: > ₹500 crore
• January 2021: > ₹100 crore
• April 2021: > ₹50 crore
• April 2022: > ₹20 crore
• October 2022: > ₹10 crore
• August 2023: > ₹5 crore
• Current (2026): > ₹5 crore

The threshold is aggregate annual turnover at PAN level in any preceding FY since 2017-18. Once you cross, e-invoicing applies from next FY.

Exempted documents and entities

E-invoicing is NOT required for:

• B2C invoices (customer is unregistered)
• Tax invoices below ₹250 (specific small B2B)
• Bill of supply (composition dealers)
• Self-invoices for RCM
• SEZ units (e-invoicing is voluntary)
• Specific categories: insurance, banking, financial institutions, passenger transport, multiplex cinemas

IRN generation process

1. Prepare invoice in your accounting software / ERP
2. Upload invoice JSON to Invoice Registration Portal (IRP) via API or directly
3. IRP validates the data (GSTIN, HSN codes, amounts)
4. IRP generates 64-character IRN hash
5. IRP also generates QR code with key fields
6. IRP returns the signed invoice with IRN and QR code
7. Issue this enriched invoice to the buyer (PDF/printed)
8. Reported data flows automatically to GSTR-1 (no separate filing for those line items)
9. And to e-way bill (Part A) if applicable

Penalties for non-compliance

• Invoice without IRN is INVALID — buyer cannot claim ITC
• Penalty for incorrect/late e-invoice: ₹10,000 OR 100% tax (whichever is higher) per invoice
• Penalty for non-generation: ₹25,000 per invoice + interest
• Repeated default: GST registration suspension/cancellation
• Indirect cost: Customer disputes (they want valid invoice for ITC)

Implementation tips

1. Update ERP/software — Most software (Tally, Zoho, Vyapar, custom) have e-invoicing modules. Activate them.
2. API integration — High-volume businesses should integrate directly via API for real-time IRN generation.
3. Bulk upload — For mid-size, use IRP web portal's bulk upload (Excel template).
4. Sequential numbering — Invoice numbering must be sequential per series. Cannot skip or repeat.
5. Backup process — IRP may be down occasionally. Have a queue mechanism to generate IRN when IRP recovers (allowed up to 7 days).