E-Invoicing Threshold Cut to ₹1 Cr: Is Your ERP Ready?

As part of India’s GST reform drive, the government has lowered the e-invoicing threshold to ₹1 crore turnover, effective April 1, 2025. Businesses crossing this limit will now be required to generate invoices through the Invoice Registration Portal (IRP) and obtain IRNs and QR codes on each B2B invoice.

This blog explains what this means for your business, why ERP readiness matters, and how to prepare before the due date to avoid penalties or GST disruptions.

Legal Reference

• Rule 48(4), CGST Rules, 2017
• CBIC Notification No. __/2024-Central Tax (expected for April 2025 rollout)
• Applies to all B2B registered businesses (excluding exempt sectors) whose annual turnover in any previous financial year from FY 2017–18 onwards exceeds ₹1 crore

What is E-Invoicing?

E-invoicing is not just a digital invoice — it’s an invoice that must be:

• Generated through your ERP/accounting software
• Uploaded in real time to the Invoice Registration Portal (IRP)
• Validated and returned with an Invoice Reference Number (IRN) and a QR Code

This applies to B2B invoices, debit/credit notes, and exports — not B2C.

Timeline of E-Invoicing Threshold Reductions

Is Your ERP/Accounting Software Ready?

You must ensure your billing system can:

• Generate e-invoice JSONs in real time
• Auto-upload to the IRP via API or Excel Utility
• Handle failover and retries if IRP is down
• Store the IRN and QR Code for every invoice
• Print or email IRN-stamped invoice to your clients
• Support auto-import into GSTR-1

Penalties for Non-Compliance

If you issue a B2B invoice without IRN and QR code:

• It is treated as invalid under GST law
• Input tax credit to the buyer can be denied
• You may face penalties under Section 122 of CGST Act:
  • ₹10,000 per invoice or 100% of tax amount, whichever is higher

Sectors Where E-Invoicing is Mandatory

• Trading and wholesale
• Service providers (e.g., SaaS, consulting)
• Manufacturers and exporters
• Logistics, warehousing, e-commerce sellers
• Digital platforms with over ₹1 crore turnover

Exempted: SEZ units, insurance, banks, NBFCs, goods transport agencies, passenger transport

How to Prepare Before April 1, 2025

1. Run a turnover check for FY 2017–18 to FY 2023–24 — even if your current year is below ₹1 crore
2. Ask your software vendor if they support IRP integration
3. Test e-invoice generation by creating JSON files and validating through NIC’s sandbox
4. Train staff to handle exceptions and IRP failures
5. Add QR code printing to your final invoice templates
6. Create a fallback Excel-based utility for emergencies

Conclusion

The move to reduce the e-invoicing threshold to ₹1 crore signals India’s push for full-scale GST automation. Startups, MSMEs, and service providers must now treat e-invoicing as a core compliance process. Waiting until the last minute will disrupt cash flows, delay ITC claims, and impact business continuity.

Call to Action and Disclaimer

Need help implementing e-invoicing or testing your ERP setup before the ₹1 crore threshold kicks in?

Schedule a meeting with our Chartered Accountant, Anshul Goyal, by visiting:

Disclaimer: I am Anshul Goyal, a Chartered Accountant licensed with ICAI, India. This article is for general awareness and does not replace legal advice tailored to your situation.

Frequently Asked Questions

1. Does the ₹1 crore limit apply to current year turnover?
No. If your turnover exceeded ₹1 crore in any financial year since FY 2017–18, e-invoicing is mandatory from April 2025.

2. Can I continue issuing normal invoices for B2C customers?
Yes. E-invoicing applies only to B2B invoices and exports.

3. Do I need e-invoicing for backdated invoices?
Only invoices dated on or after April 1, 2025 need e-invoicing if you cross the threshold.

4. What if my accounting software doesn’t support IRP integration?
You can use government tools like the offline Excel utility or switch to a GST-compliant cloud solution.

5. Is input tax credit denied if supplier fails to issue a valid e-invoice?
Yes. Your buyer may lose eligibility for ITC if the invoice is not IRP validated.