E-invoicing does not mean emailing a PDF. It means reporting the invoice to the Invoice Registration Portal and obtaining an Invoice Reference Number before the invoice is valid. An invoice that should have been reported and was not is, for GST purposes, not a valid invoice — which puts your customer’s input credit at risk as well as your own position.
Who it applies to
E-invoicing is mandatory for businesses whose aggregate annual turnover has exceeded Rs 5 crore in any financial year from 2017-18 onwards. The test looks backwards across years, so crossing the threshold once brings you in — you do not fall back out by having a quieter year.
The threshold has been reduced in stages since e-invoicing was introduced, and there has been discussion of lowering it further to Rs 3 crore or Rs 2 crore. As at the date of this article, it remains Rs 5 crore.
What is outside it
E-invoicing applies to B2B supplies. It does not apply to:
- B2C sales to consumers
- Banks, insurers and non-banking financial companies
- Goods transport agencies
- Passenger transport services
- Multiplexes
The 30-day reporting limit
Businesses with aggregate turnover of Rs 10 crore and above must report an invoice to the IRP within 30 days of its date. Miss the window and the portal will not accept it.
Below Rs 10 crore the 30-day restriction does not currently apply, but leaving reporting until later is a poor habit in any case — it tends to end with a month’s invoices being reported in one sitting, and any that fail validation being discovered far too late.
What to get right at setup
Most e-invoicing problems are setup problems rather than ongoing ones. The common ones are a mismatch between your invoice numbering and what is reported, HSN codes that fail validation, and customer GSTINs that are wrong or inactive. All three are cheap to fix at the outset and awkward to unpick after six months of invoices.
If your turnover is approaching Rs 5 crore, set e-invoicing up before you cross rather than after. The transition is straightforward with notice and unpleasant without it.