E-invoicing threshold drops again: who gets pulled in from August 1

E-invoicing began life in 2020 as a big-company obligation — ₹500 crore and above. Since then the threshold has stepped down relentlessly, pulling mid-size and now genuinely small businesses into the IRP fold. With the latest revision effective August 1, a fresh cohort of businesses must generate IRNs on every B2B document. If your finance team has been treating e-invoicing as someone else's problem, this is the month that assumption gets tested.

How to know if you are covered

The test is aggregate turnover in any financial year from 2017-18 onwards — not last year's turnover, and not this year's projection. Aggregate turnover is PAN-wide: all GSTINs, all branches, taxable plus exempt supplies, exports included. Crossing the notified limit even once in any of those years brings you in, permanently. A business that had one exceptional year in 2018-19 and has been smaller ever since is still covered — this catches more people than any other detail of the scheme.

What changes on day one

• Every B2B tax invoice, credit note and debit note must be registered on an Invoice Registration Portal, which returns an IRN and a signed QR code. An invoice without an IRN, where one is required, is not a valid invoice in law.
• Your buyer's ITC depends on it — unregistered invoices will not flow to their GSTR-2B correctly, and well-run customers will simply stop paying against non-compliant paper.
• Exports and supplies to SEZ units need IRNs too. B2C invoices do not — though dynamic QR obligations may apply separately at higher turnovers.
• GSTR-1 largely auto-populates from IRP data, which is a genuine time-saver once the pipes are connected.

A three-week implementation plan

• Week 1: Confirm applicability year-by-year from 2017-18; register on the IRP sandbox; inventory every system that raises an invoice — including the branch that still uses Excel.
• Week 2: Connect your ERP or billing tool to the IRP (native integrations exist for the mainstream packages; GSPs cover the rest); map mandatory fields — six-digit HSN, buyer GSTIN validation, place of supply.
• Week 3: Parallel-run on real invoices in the sandbox; train billing staff on cancellation rules — an IRN can be cancelled within 24 hours, after which the fix is a credit note; go live before the deadline, not on it.

The penalty math, briefly

Issuing an invoice without a required IRN invites a penalty of ₹10,000 per invoice or the tax involved, whichever is higher, plus ₹25,000 for incorrect invoicing — per document. But the practical penalty arrives faster: blocked customer credits, payment holds, and e-way bills that will not generate. Compliance here is not a filing obligation so much as a condition of staying easy to do business with.

If you are newly covered and your systems are not ready, speak to our GST desk this week — the sandbox-to-live path is well worn, but it is not an overnight one.