E-Invoice Turnover Limit: Who Is Covered, and the Trap in the Threshold

The phased rollout

E-invoicing arrived in stages, each lowering the bar:

• Five hundred crore rupees, from 1 October 2020.
• One hundred crore rupees, from 1 January 2021.
• Fifty crore rupees, from 1 April 2021.
• Twenty crore rupees, from 1 April 2022.
• Ten crore rupees, from 1 October 2022.
• Five crore rupees, from 1 August 2023.

The three qualifications

First, the test looks at any financial year from 2017-18 onwards. A business that touched five crore rupees in 2019-20 and has run at three crore since is still covered. Second, aggregate turnover is computed across all GSTINs under the same PAN, so a group operating in four States adds them together. Third, it includes exempt supplies, exports and inter-State supplies between distinct persons, not merely taxable sales.

Together these mean the figure in your profit and loss account is rarely the figure the test uses.

What is covered, and what is not

Covered: B2B supplies to registered persons, exports with or without payment of tax, deemed exports, supplies to SEZ units and developers, and credit and debit notes against any of these.

Not covered: B2C supplies at any turnover, bills of supply from composition dealers, delivery challans, job-work challans, imports, and high-sea sales. Nil-rated and exempt supplies are reported on a bill of supply, which carries no IRN.

Exempt suppliers

Certain categories are exempt from issuing e-invoices whatever their turnover: SEZ units as suppliers, insurers, banks and non-banking financial companies, goods transport agencies supplying road transport, passenger transport services, multiplex cinema admissions, and government departments and local authorities.

Note the asymmetry on SEZ: an SEZ unit is exempt from issuing, but a normal taxpayer supplying an SEZ is not exempt from issuing to them. SEZ developers, as distinct from units, are not exempt either.

The thirty-day reporting window

Taxpayers with aggregate turnover of ten crore rupees or more must report an invoice to the portal within thirty days of the document date. Past that, the portal rejects it outright.

There is no appeal and no late window. An invoice that cannot be registered is not a valid tax invoice, so the supply has to be re-documented with a fresh invoice number and a current date, which creates its own reconciliation problems.

Frequently asked questions

### What is the current e-invoice limit?

Five crore rupees of aggregate annual turnover, effective 1 August 2023, tested against any financial year from 2017-18 onwards. Crossing it in any single past year brings you permanently within the obligation.

### If my turnover drops below five crore, does e-invoicing stop?

No. The obligation attaches once the threshold is crossed in any financial year from 2017-18 and does not fall away in later years. This is one of the most frequently misunderstood aspects of the rule.

### Does e-invoicing apply to B2C sales?

No, regardless of turnover. A separate obligation requires taxpayers above five hundred crore rupees to display a dynamic QR code on B2C invoices, but that does not involve the Invoice Registration Portal and does not produce an IRN.

### How is aggregate turnover computed?

PAN-wide across all GSTINs, including taxable supplies, exempt supplies, exports and inter-State supplies between distinct persons. It excludes inward supplies on which tax is paid under reverse charge, and the taxes themselves.