E-Invoicing Rules in India: 2026 Guidelines Explained

What is E-Invoicing?

E-invoicing means your ERP software sends invoice data to the Invoice Registration Portal (IRP), which validates it and generates a unique Invoice Reference Number (IRN) along with a QR code.

It does not mean creating invoices on the government website. The invoice is generated in your accounting software and then authenticated by IRP.

Turnover Limit – ₹5 Crore Rule

As of 2026, businesses with Aggregate Annual Turnover (AATO) exceeding ₹5 Crore in any financial year since 2017-18 must generate IRN for all B2B and export invoices.

Invoices without a valid IRN and QR code are treated as invalid under GST law.

30-Day Reporting Rule (₹10 Crore and Above)

Taxpayers with turnover of ₹10 Crore and above must report invoices within 30 days of invoice date.

• Invoice dated 1st January must be uploaded before 30th January.
• Portal will reject upload after deadline.

Mandatory Two-Factor Authentication (2FA)

All taxpayers must use OTP-based login along with username and password while accessing the e-invoice portal.

This prevents misuse of login credentials and enhances security.

Transactions Requiring E-Invoicing

• B2B Transactions
• Export Sales
• SEZ Supplies

Exempted Transactions & Sectors

• B2C Sales
• Banking & Insurance
• NBFCs
• Goods Transport Agencies
• Passenger Transport Services
• Multiplexes

How TallyPrime Simplifies E-Invoicing

TallyPrime integrates directly with IRP. When you save a sales invoice:

• IRN is generated automatically
• QR code is printed instantly
• Bulk generation supported
• Pending invoice report helps meet 30-day deadline
• 2FA session remains active for hours

Penalty for Non-Compliance

Issuing invoice without IRN can result in:

• Invoice treated as invalid
• ITC denial to buyer
• ₹10,000 penalty per invoice (or tax amount whichever higher)

Final Remarks

E-invoicing is not just a compliance requirement but a digital standardisation system. Businesses must audit turnover, upgrade ERP systems, and ensure timely reporting to avoid portal rejection.

How to Calculate Aggregate Annual Turnover (AATO)

Aggregate Annual Turnover (AATO) includes the total value of all taxable supplies, exempt supplies, exports, and inter-state supplies across India under the same PAN. It excludes inward supplies on which tax is payable under reverse charge and excludes taxes themselves.

If your turnover crossed ₹5 Crore even once in any financial year from 2017-18 onwards, you must comply with e-invoicing requirements.

Step-by-Step IRN Generation Process

Understanding the backend flow helps avoid rejection errors. Here is how the process works:

• Create sales invoice in ERP software.
• Invoice data is pushed to the IRP (Invoice Registration Portal).
• IRP validates GSTIN, invoice number, and tax values.
• System generates unique Invoice Reference Number (IRN).
• Digitally signed QR code is returned.
• Invoice becomes legally valid under GST.

Common IRN Validation Errors

• Duplicate invoice number for same financial year
• Incorrect GSTIN format
• HSN code mismatch
• Incorrect tax calculation
• Invalid document type selection

Using integrated accounting software reduces these risks by validating data before submission.

Impact on Input Tax Credit (ITC)

If a seller fails to generate a valid IRN, the buyer cannot claim Input Tax Credit. This directly affects payment cycles because buyers may delay payments until valid IRN is provided.

Therefore, e-invoicing compliance improves trust and accelerates receivables.

E-Invoicing for Export Transactions

Export invoices also require IRN generation if turnover exceeds ₹5 Crore. The invoice must include:

• Export type (with or without LUT)
• Shipping bill details
• Port code
• Country code

Failure to include export details correctly can result in IRP rejection.

E-Invoice Cancellation Process

An e-invoice can only be cancelled within 24 hours from IRN generation via IRP. After 24 hours:

• Cancellation must be done manually in GST portal.
• Credit note must be issued if required.

Amendment Rules

Once IRN is generated, invoice details cannot be modified. You must:

• Cancel within 24 hours and regenerate, OR
• Issue a debit/credit note for correction.

Bulk E-Invoice Generation

Businesses generating high volumes of invoices can use bulk upload utilities or direct ERP integration to generate multiple IRNs at once.

This prevents delay and ensures 30-day compliance.

Security & Data Protection Measures

• Mandatory Two-Factor Authentication (2FA)
• IRP digital signature verification
• Encrypted invoice data transmission
• Session-based login authentication

Future Outlook: What Businesses Should Prepare For

Industry experts anticipate:

• Possible reduction of threshold to ₹3 Crore
• Stricter validation controls
• Real-time reconciliation between IRP and GST portal
• Automated compliance audits

Upgrading accounting systems early ensures readiness for future regulatory changes.

E-Invoicing Compliance Checklist (2026)

• ✔ Verify AATO eligibility
• ✔ Enable e-invoicing in ERP
• ✔ Validate GSTIN master data
• ✔ Monitor 30-day upload deadlines
• ✔ Maintain export documentation
• ✔ Train accounting team

Business Benefits Beyond Compliance

• Improved invoice accuracy
• Faster payment cycles
• Reduced reconciliation disputes
• Standardised accounting records
• Improved buyer confidence

Expert Recommendation for MSMEs

MSMEs should not treat e-invoicing as a compliance burden. Instead, it should be integrated as part of daily billing workflow using reliable accounting systems.

Automated integration prevents last-minute upload stress, IRP rejections, and penalty exposure.

Frequently Asked Questions

Is there a proposal to reduce the limit to ₹3 Crore?

No official notification as of February 2026.

Does 30-day rule apply to ₹6 Crore turnover?

No. It currently applies only to taxpayers above ₹10 Crore.

Can I cancel an e-invoice?

Yes, within 24 hours of IRN generation via IRP.

What happens if IRN is not generated?

The invoice becomes invalid under GST law.

How does TallyPrime handle 2FA?

TallyPrime maintains session authentication, reducing repeated OTP entry.