Detailed Explanation
How it works
E-invoicing applies to taxpayers with turnover above Rs.5 crore. An invoice without a valid IRN, where e-invoicing applies, is not a valid tax invoice and can deny the recipient's ITC.
Who must e-invoice, and for what
Mandatory for taxpayers whose aggregate turnover exceeded Rs.5 crore in any financial year from 2017-18 onwards, for B2B invoices, exports, credit/debit notes — not B2C supplies (which have their own dynamic-QR requirement above Rs.500 crore). Excluded sectors: banks/NBFCs, insurers, GTA, passenger transport, cinema, and SEZ units (SEZ developers are covered).
The mechanics
The supplier pushes the invoice JSON to the Invoice Registration Portal (IRP), which validates, assigns a unique IRN (hash), digitally signs, and returns a QR code that must appear on the printed invoice. The data auto-flows to GSTR-1 and, where applicable, generates the e-way bill Part-A. From the recipient's side, e-invoiced supplies populate 2B with higher fidelity — one reason large buyers now contractually require e-invoicing regardless of the vendor's legal threshold. Taxpayers above Rs.10 crore must report invoices to the IRP within 30 days of the invoice date (window periodically tightened) — miss it and the document cannot be registered at all.
Failure consequences
An invoice that legally required an IRN but lacks one is not a valid tax invoice: penalty exposure under Section 122 (Rs.10,000 or the tax, whichever is higher, per document), and — the commercially painful part — the buyer's ITC sits on a defective document. Build the turnover check into every new financial year's opening: crossing Rs.5 crore in FY 2026-27 pulls you into e-invoicing from the start of FY 2027-28.
Frequently asked questions
Who must generate e-invoices?
Taxpayers with aggregate turnover above Rs.5 crore in any year from 2017-18, for B2B, SEZ and export invoices.
Is an invoice valid without an IRN?
No, where e-invoicing applies; the recipient's ITC can be denied.
This content is for general guidance only and does not constitute professional advice. Tax law changes frequently — verify the current position and consult a qualified Chartered Accountant before acting. Last reviewed: June 2026.