The e-invoicing threshold has been a moving target since 2020. Every time it drops, a fresh batch of mid-sized businesses get pulled into the system, and CAs spend the next month explaining IRNs and QR codes to clients who thought their invoicing software was working fine.
Here's the current state of the world and what your client actually needs to do.
The turnover threshold, by year
- October 2020 — ₹500 crore
- January 2021 — ₹100 crore
- April 2021 — ₹50 crore
- April 2022 — ₹20 crore
- October 2022 — ₹10 crore
- August 2023 — ₹5 crore (still current)
The threshold applies to aggregate turnover in any preceding financial year from 2017-18 onward. A client that hit ₹6 crore in 2018-19 and has since dropped to ₹3 crore is still required to issue e-invoices. There's no graduation out of the system.
Who's exempt
- Special Economic Zone units (but SEZ developers are not exempt)
- Banking and insurance companies
- Goods transport agencies (GTAs)
- Passenger transport services
- Multiplex cinema operators (for the ticket sale portion)
- Government departments and local authorities
If your client falls into one of these, they don't need to issue e-invoices regardless of turnover. But if they have a mixed business — say, a hotel that also runs a travel agency — only the exempt portion is exempt.
The IRN flow, in plain English
- Client raises an invoice in their accounting system as normal
- The invoice JSON is uploaded to the IRP (Invoice Registration Portal) — there are six government-approved IRPs to choose from
- IRP validates the schema, generates a unique IRN (Invoice Reference Number) and a signed QR code, returns both
- The IRN and QR get printed on the invoice that goes to the buyer
- The invoice auto-populates into the client's GSTR-1 and the buyer's GSTR-2A
The catch: this whole flow needs to happen within 7 days of invoice generation. After that, the IRP refuses to register it and the invoice is technically invalid.
What goes wrong in practice
Three things, mostly:
Soft credit limits. Many clients hit IRP API rate limits during month-end billing rushes. The invoice gets generated locally but never IRN-registered. They only notice when the buyer asks for the QR code.
Cancelled invoices. If you cancel an e-invoice, you have 24 hours to do so via the IRP. After that, you have to issue a credit note. We've watched teams cancel locally and forget the IRP step, then file GSTR-1 with the cancelled invoice still active.
Mixed-flow billing. Clients with both B2B and B2C billing forget that only the B2B portion needs e-invoicing. They send everything to IRP, hit rate limits, and miss legitimate invoices.
What to actually do for your clients
If a client is approaching ₹5 crore turnover, start them on e-invoicing before they cross the threshold. Get the IRP integration working, train the billing team, do a few test invoices. Crossing the threshold is not the moment to learn the workflow.
If they're already on e-invoicing, audit it monthly. Pull a list of invoices from books, compare against IRN-registered invoices on the portal, surface the gaps. We've found firms where 4-5% of monthly invoices were missing IRNs and nobody noticed for a year.
