In 2020, India introduced e-invoicing for businesses above ₹500 crore. Every year since, the threshold has been lowered. Today, any business with an aggregate annual turnover above ₹5 crore must generate e-invoices for all B2B supplies. That covers an enormous swath of Indian MSMEs.
If you are in this bracket and still raising invoices on paper or basic billing software, you are non-compliant with every B2B invoice you issue. The penalties are not trivial. But more practically, your B2B customers cannot claim input tax credit on your invoices — which means they'll stop buying from you.
Here is everything you need to know.
What Exactly is an E-Invoice?
An e-invoice is not an invoice that you email (that's just a digital invoice). An e-invoice is an invoice whose data has been submitted to and authenticated by India's Invoice Registration Portal (IRP). The IRP validates the data, generates a unique Invoice Reference Number (IRN) and a QR code, and returns them to you. You then print or send the invoice with this IRN and QR code.
Without the IRN, your invoice is not a valid GST invoice for B2B purposes. The buyer cannot claim ITC. You have essentially wasted both your and your customer's time.
Who Must Generate E-Invoices?
As of 2026, the e-invoicing threshold is ₹5 crore aggregate annual turnover. This means:
- If your GSTIN's combined turnover across all businesses (under the same PAN) exceeded ₹5 crore in any financial year from 2017–18 onwards, you are in scope.
- Even if your current year revenue is below ₹5 crore, you must continue if you crossed it in a previous year.
- Certain exemptions apply: banking/insurance/NBFCs, SEZ units, and government departments are currently exempt.
The E-Invoice Process: Step by Step
Step 1: Enable e-invoicing on the GST portal. Log in to the GST portal, go to Services → E-Invoice → Enable for GSTIN.
Step 2: Choose your e-invoice generation method. You can either use the IRP portal directly (manual, slow) or use e-invoice-enabled billing software (fast, integrated). The latter is strongly recommended.
Step 3: Create the invoice in your billing software. In ZeroBillBook's Bada Vyapar plan (which includes e-invoicing), you create the invoice as normal. The software validates the data before submission.
Step 4: The software pushes the invoice to IRP. Within seconds, the IRP validates the GSTIN, checks for duplicate IRN, and returns the IRN and a signed QR code.
Step 5: Print or share the invoice. The IRN (64-character hash) and QR code are now embedded in the invoice. Your B2B customer can scan the QR code to verify authenticity.
What Data is Submitted to IRP?
The IRP requires a JSON payload containing:
- Supplier and buyer GSTINs
- Document type (INV, CRN, DBN for invoice, credit note, debit note)
- Invoice number and date
- Line items with HSN, quantity, unit, rate, discount, and tax details
- Total taxable value and tax breakup
- Payment terms and bank details (optional)
Your billing software handles all of this formatting automatically. You never need to manually create a JSON file.
What Happens if You Don't E-Invoice?
The consequences cascade:
- Your invoice has no IRN — it is technically invalid for GST purposes
- Your buyer cannot claim input tax credit — they will dispute your invoice
- The GST department can raise a demand for the full GST amount you should have collected and remitted
- Penalty: 100% of the tax or ₹10,000 per invoice, whichever is higher
In practice, the first outcome — your customers not being able to claim ITC — is the one that hurts businesses most. B2B buyers are very aware of e-invoice requirements and will reject non-compliant invoices.
Getting Started Without Disruption
If you are approaching the ₹5 crore threshold, start preparing now:
- Ensure your billing software supports e-invoicing (IRP integration)
- Keep buyer GSTIN data accurate and complete — IRP will reject invoices with invalid GSTINs
- Test a few invoices with a small order before switching fully
- Brief your sales team — they need to know that for B2B orders, the printed invoice must have an IRN
E-invoicing sounds daunting, but with the right software, it adds less than 5 seconds to your invoice creation process. The IRP response is fast, the integration is seamless, and the compliance is automatic.
The ₹5 crore rule is not going away — if anything, the threshold will keep dropping. Getting compliant now is infinitely better than scrambling after a notice.