E-Invoice Limit: Current E-Invoicing, Importance, and Strategies

Discover the crucial details about e-invoice limits, their impact on businesses, and how to navigate them effectively. Stay informed with our comprehensive guide.
Apply Now
Business Loan
Apply Now
3 min
26-July-2024

E-invoicing has become a key part of GST compliance in India, standardising invoice formats and improving record-keeping. Over time, the government has gradually lowered the e-invoice turnover limit to bring more businesses under its scope, making it a routine part of tax compliance.

Initially, the e-invoice limit applied only to businesses with an annual turnover of over Rs.100 crore. However, the latest update from GSTN has significantly reduced this threshold. As of the recent advisory, the 30-day e-invoice generation time limit now applies to businesses with an Aggregate Annual Turnover (AATO) exceeding Rs.10 crore. This means eligible businesses must generate e-invoices within 30 days from the date of invoice issuance.

Failing to adhere to this timeline may result in non-compliance, affecting the validity of invoices and input tax credits. Businesses must stay updated with evolving regulations to ensure seamless operations and GST adherence. Check your business loan eligibility to ensure your operations remain financially stable during transitions in compliance requirements.

Business Loan
Business Loan

What are e-invoice limits?

e-invoice limits refer to the monetary thresholds set by the GST Act, which determines whether a business must generate electronic invoices for its transactions. As of now, businesses with an annual turnover exceeding Rs. 10 crore are mandated to generate GST e-invoices. This threshold ensures that only larger businesses, which have the necessary infrastructure and transaction volumes, are required to comply. The implementation of e-invoice limits aims to streamline tax administration, reduce fraud, and enhance transparency in financial dealings.

Current E-Invoicing Turnover Limit

E-invoicing has gradually been extended to more businesses, with the turnover threshold being reduced year after year to enhance GST compliance.

Financial Year

Turnover Threshold (₹)

E-Invoicing Mandatory From

2020-21

Rs.500 Crore

1st October 2020

2020-21

Rs.100 Crore

1st January 2021

2021-22

Rs.50 Crore

1st April 2021

2022-23

Rs.20 Crore

1st April 2022

2023-24

Rs.10 Crore

1st October 2022

2024-25

Rs.5 Crore

1st August 2023

 

E-invoicing is now mandatory for businesses with turnover above Rs. 5 crore, expanding the compliance scope to more mid-sized enterprises.

Importance of e-invoice limits

  • Compliance efficiency: E-invoice limits simplify compliance for small businesses, exempting them from complex requirements.

  • Tax administration: Helps the government effectively monitor and manage tax collections.

  • Fraud prevention: Reduces the risk of fraudulent invoices and ensures authentic transactions.

  • Digital transformation: Encourages businesses to adopt digital invoicing practices, promoting technological advancement.

What Are the Implications of Exceeding the 30-Day E-Invoicing Time Limit?

Failing to upload your e-invoice within the prescribed 30-day period can result in several operational and financial setbacks:

  • Invoice rejection: Invoices uploaded after 30 days will be automatically rejected by the Invoice Registration Portal (IRP) and deemed invalid for GST compliance

  • Disrupted ITC claims: Buyers will be unable to claim input tax credit on such rejected invoices, which may impact cash flow and strain business relationships

  • Penalties: For non-generation of a valid e-invoice, the penalty is 100 percent of the tax amount or Rs. 10,000 per invoice, whichever is higher

  • Administrative burden: Rejected invoices may need to be cancelled and reissued, adding to the workload and risk of clerical errors

  • Compliance risks: Delays or missed deadlines increase the chance of non-compliance, which may attract penalties or scrutiny during GST audits

How do e-invoice limits affect businesses?

  • Operational changes: Businesses crossing the e-invoice threshold must upgrade their invoicing systems.

  • Cost implications: Implementation of e-invoicing may involve costs for software and training.

  • Increased compliance: Larger businesses need to adhere to stringent GST e-invoice regulations.

  • Competitive edge: Compliance with e-invoice norms can enhance a business's credibility and operational efficiency, much like how understanding working capital is crucial for a business’s financial health.

Understanding compliance requirements

  • Threshold awareness: Businesses must monitor their annual turnover to ensure they meet e-invoice limits.

  • System upgrades: Necessary upgrades to invoicing systems and software to comply with GST Act requirements.

  • Staff training: Regular training for staff to understand and manage e-invoice processes efficiently.

  • Documentation: Ensuring accurate and timely documentation to avoid penalties and ensure smooth operations.

For businesses managing their assets, proper documentation and efficient processes become integral in meeting compliance. Check your pre-approved business loan offer to support the technology upgrades and system changes needed for e-invoicing compliance.

Strategies for managing e-invoice limits

  • Regular audits: Conduct periodic audits to ensure turnover is accurately tracked and e-invoice compliance is maintained.

  • Invest in technology: Implement robust invoicing software that automates the e-invoice generation process.

  • Staff training: Regularly train staff on e-invoice regulations and compliance requirements.

  • Consult experts: Seek advice from tax professionals to stay updated with the latest GST e-invoice guidelines.

For companies evaluating their operational effectiveness, a well-planned working capital cycle can be essential in managing costs and investments.

Changes in the E-Invoice Generation Time Limit Over Time

When e-invoicing was initially launched under GST, there was no set deadline for reporting invoices. To curb backdated entries and improve compliance, the government later introduced a formal time limit for e-invoice generation. Although a 7-day limit was once considered, it was never officially implemented. The first actual time-bound rule came into force in April 2023. Here’s how it evolved:

  • In April 2024, the government issued an advisory introducing a 30-day e-invoice generation time limit

  • In November 2024, a revised notification reduced the e-invoice limit to businesses with an Aggregate Annual Turnover (AATO) of over Rs. 10 crore

  • This rule will take effect from 1st April 2025, requiring affected businesses to report invoices within 30 days of issuance

  • Businesses with AATO below Rs. 10 crore are not required to follow this 30-day time limit

This phased rollout aims to ensure timely and standardised invoice reporting while easing smaller businesses into compliance.

Conclusion

Understanding and managing e-invoice limits is crucial for businesses to ensure compliance with the GST Act. It helps streamline tax administration, prevent fraud, and promote digital transformation. Businesses, particularly those availing of a business loan, must stay informed about e-invoice requirements and implement effective strategies to manage these limits. By doing so, they can enhance operational efficiency and maintain a competitive edge in the market, much like how understanding the business environment is key to adapting and thriving in any sector.

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Frequently asked questions

What is the latest e-invoice limit?
As of now, the latest e-invoice limit under the GST Act mandates that businesses with an annual turnover exceeding Rs. 10 crore must generate electronic invoices for their transactions. This threshold aims to include larger enterprises in the digital invoicing system, ensuring better compliance and transparency. The limit is periodically reviewed and may be adjusted by the authorities to encompass more businesses as part of the broader objective of streamlining tax administration and reducing fraud.

What is the 7-day limit for an e-invoice?
The 7-day limit for an e-invoice, as mandated by the GST Act, requires businesses to generate and report electronic invoices within seven days from the date of the actual transaction. This regulation ensures timely compliance and accurate reflection of business activities in the GST portal. It aims to reduce discrepancies, enhance transparency, and streamline the tax administration process. Failure to adhere to this 7-day timeframe can result in penalties and disrupt business operations.

How to check the turnover limit for e-invoicing?
To check the turnover limit for e-invoicing under the GST Act, businesses should review their annual gross turnover for the preceding financial year. This can be done by examining financial statements, GST returns, and other accounting records. If the turnover exceeds Rs. 10 crore, the business is required to generate GST e-invoices. Regular audits and consultations with tax professionals can ensure accurate monitoring and compliance with the e-invoicing threshold.

Is the Rs. 10 crore e-invoice limit applicable?
As of the latest updates, the e-invoice limit under the GST Act in India is set at Rs. 10 crore annual turnover. This means businesses with a turnover exceeding Rs. 10 crore must generate GST e-invoices for their transactions. The limit has been periodically revised to include more businesses under the e-invoice mandate, aiming to enhance tax compliance and transparency. It is essential for businesses to stay updated with official notifications to ensure compliance with the current e-invoice requirements.

When does the new 30-day time limit come into effect?

The 30-day time limit for e-invoice generation will be applicable from 1st April 2025 for eligible businesses as per the updated GST advisory.

What documents are eligible for the 30-day e-invoicing limit?

The 30-day limit applies to tax invoices and credit or debit notes issued under sections 31A and 34 of the CGST Act that require IRN generation.

Is the e-invoice time limit applicable to businesses with Rs. 5 crore turnover?

No, the 30-day e-invoice generation limit currently applies only to businesses with an annual turnover exceeding Rs. 10 crore.

Who does the 30-day e-invoicing time limit not apply to?

This rule does not apply to businesses with turnover below Rs. 10 crore, exempt entities, and sectors not notified for mandatory e-invoicing.

Show More Show Less

Related videos