E-Invoicing Turnover Limit: Why Last Year’s Turnover Is the Wrong Number

The wrong number, checked confidently

Here is how the mistake usually happens. Somebody in accounts pulls last year’s turnover, sees ₹4.1 crore, concludes the business is below the ₹5 crore line, and files that thought away. Everyone gets on with their year.

The number was right. The question was wrong.

The e-invoicing test does not ask what you turned over last year. It asks whether your aggregate annual turnover has crossed ₹5 crore in any financial year since 2017-18. A business that peaked at ₹6 crore in FY 2022-23 and has traded at ₹4 crore ever since is covered, permanently, and has been since the day it crossed.

This article is about getting the self-assessment right. If you already know you are covered and want the mechanics — the IRP, the schema, the common rejections — that is in our GST e-invoicing guide.

Three things about the threshold that are routinely got wrong

1. It is not a 2026 change

A surprising amount of recent commentary presents the ₹5 crore threshold as a new wave of coverage starting in FY 2026-27. It is not. Notification 10/2023-Central Tax brought the threshold down to ₹5 crore with effect from 1 August 2023, and as at the date of this article no notification has reduced it further.

The rollout ran in steps, and knowing where you entered matters for working out how long you have been non-compliant if you missed it. The dates that apply to your own filings are on our compliance calendar.

2. It is measured across your PAN, not your GSTIN

Aggregate annual turnover under the CGST Act is computed on an all-India basis for all persons having the same PAN. It includes taxable supplies, exempt supplies, exports and inter-state supplies, and it excludes GST itself.

So a business with three state registrations turning over ₹2 crore each is at ₹6 crore, not ₹2 crore, and every one of those GSTINs is covered — including a registration you took for a state you barely trade in. Exempt supplies count. Exports count. A branch you think of as a separate business but which sits on the same PAN counts.

The two things that most often get wrongly excluded are exempt supplies and stock transfers between your own GSTINs in different states, both of which belong in the figure.

3. The trigger is permanent

There is no exit. The obligation attaches on crossing and stays attached. A business whose turnover has halved since 2022 is still an e-invoicing taxpayer.

This is the single most consequential feature of the rule and the one least well covered, because it is the opposite of how most GST thresholds behave. Registration thresholds, composition limits and audit limits are all tested year by year. This one is not.

Am I covered? A self-assessment you can run in twenty minutes

• Step 1 — list every GSTIN registered against your PAN, including states you barely trade in and registrations you think are dormant. Turnover reported in your GST returns is the source, not your management accounts.
• Step 2 — for each financial year from 2017-18 to the last completed year, add up turnover across all of those GSTINs. Include taxable supplies, exempt supplies, exports and inter-state supplies. Exclude GST.
• Step 3 — take the highest of those annual figures. Not the latest, the highest.
• Step 4 — if that highest figure exceeds ₹5 crore, you are covered, from the date of the notification applicable when you crossed.
• Step 5 — separately, check whether that highest figure exceeds ₹10 crore. If it does, the 30-day reporting window also applies to you.
• Step 6 — check whether your entity type is exempt. The exemptions are entity-based, not transaction-based, and are set out below.

Who is exempt

Notification 13/2020-Central Tax, as amended, exempts certain classes of registered person from e-invoicing regardless of turnover:

• Insurers, and banking companies and financial institutions including non-banking financial companies
• Goods transport agencies supplying services in relation to transportation of goods by road
• Suppliers of passenger transportation services
• Suppliers of services by way of admission to the exhibition of cinematograph films in multiplex screens
• Special Economic Zone units — note that this covers SEZ units, not SEZ developers, who are not exempt
• Government departments and local authorities

The exemption attaches to the person, not to the invoice. An exempt entity does not e-invoice at all. A covered entity e-invoices all of its covered supplies, and cannot pick and choose.

What has to be e-invoiced, and what does not

The B2C exclusion is the one people over-read. It means you do not generate an IRN for a retail sale. It does not mean a business selling mostly to consumers is outside e-invoicing — every B2B invoice it does raise is still covered.

The 30-day rule, which is a different rule at a different threshold

From 1 April 2025, a taxpayer with aggregate annual turnover of ₹10 crore or more cannot report an invoice to the Invoice Registration Portal more than 30 days after the document date. The portal rejects it.

Two things follow. The invoice cannot be regularised late, because the IRN cannot be generated at all after the window closes. And because e-invoicing is not optional for a covered supply, the position of a document that missed the window is unpleasant and needs professional handling rather than a workaround.

This threshold is ₹10 crore and the e-invoicing mandate is ₹5 crore. Conflating them is the most common error in published guidance on this subject. A business at ₹7 crore must e-invoice and is not subject to the 30-day window. A business at ₹12 crore is subject to both.

What happens if you should have been e-invoicing and were not

This is the part the software vendors’ pages tend to skate over, and it is the part that costs money.

Where an invoice is required to be issued through the IRP and is not, it is not treated as a valid tax invoice. Not "a late invoice", not "an invoice with a compliance issue" — not an invoice.

The consequences run in both directions:

• For you as supplier — the document is not a tax invoice, the supply is effectively undocumented, and general penalty provisions apply to the failure to issue an invoice.
• For your customer — input tax credit requires a tax invoice. No IRN, no valid invoice, no credit. Your customer pays your GST twice: once to you and once to the Government.
• For the relationship — this is the part that actually bites. The buyer’s system usually catches the missing IRN before your system does, because large buyers validate IRNs on receipt. You find out through a debit note or a payment hold.
• For the e-way bill — where e-invoicing applies, the two systems are linked, and a broken IRN position tends to surface as a transport problem on a day when a truck is waiting.

If you have discovered a historical gap, do not simply start e-invoicing from tomorrow and hope. The exposure needs to be quantified for the period involved and the customer positions dealt with. Our GST e-invoicing service covers both the setup and the clean-up.

A note on the neutral answer

Almost every page ranking for this question is published by a company that sells e-invoicing software, which makes it structurally difficult for those pages to tell you that you need do nothing.

So, plainly: if your highest aggregate annual turnover across all GSTINs on your PAN since 2017-18 has never crossed ₹5 crore, e-invoicing does not apply to you, you do not need to buy anything, and the correct action is to note the figure that would trigger it and check again at each year end. Voluntary e-invoicing is not available for a taxpayer below the threshold — the portal will not enable it.

Key takeaways

• ₹5 crore, in force since 1 August 2023 under Notification 10/2023-Central Tax. Not a 2026 change.
• Tested on the highest aggregate annual turnover in any financial year since 2017-18, PAN-level across all GSTINs.
• Permanent once crossed. Falling below the threshold later does not remove the obligation.
• The 30-day reporting window is a separate rule at ₹10 crore, in force since 1 April 2025.
• An invoice that needed an IRN and does not have one is not a tax invoice, and your buyer loses the credit.

Frequently asked questions