E-Invoice Applicability: ₹5 Crore Turnover Threshold and Exempted Categories
E-invoicing is mandatory once aggregate turnover exceeds ₹5 crore in any financial year from FY 2017-18 onwards, per Notification No. 10/2023-CT (effective 1 August 2023). The ₹5 crore limit replaced ₹10 crore; earlier thresholds were ₹500, ₹100, ₹50 and ₹20 crore. The obligation is permanent once crossed.
HRA Research Desk
Chartered Accountant · Harun Raaj & Associates
E-invoicing is mandatory once aggregate turnover exceeds ₹5 crore in any financial year from FY 2017-18 onwards, under Rule 48(4) CGST Rules 2017 read with Notification No. 10/2023-CT (effective 1 August 2023) — and the obligation never lapses even if turnover later falls below ₹5 crore. Banking companies, NBFCs, insurers, goods transport agencies, passenger transport, cinema-multiplex admission and SEZ units are excluded. Every B2B and B2G invoice, credit note and debit note is covered.
What the law actually requires
E-invoicing sits in Rule 48(4) of the CGST Rules 2017, and the turnover test that triggers it has been lowered seven times since October 2020. The current threshold — ₹5 crore — was fixed by Notification No. 10/2023-CT dated 10 May 2023, effective 1 August 2023, replacing the ₹10 crore threshold set only ten months earlier.
The phrase that decides everything: "any preceding financial year"
Notification No. 10/2023-CT does not test what you turned over last year. It requires e-invoicing for every registered person whose aggregate turnover exceeded ₹5 crore in any financial year from FY 2017-18 onwards. There is no de-registration mechanism, no fall-back if turnover shrinks, and no departmental process for exiting e-invoicing. A company that crossed ₹5 crore in FY 2020-21 and shrank to ₹2 crore by FY 2025-26 remains covered.
Aggregate turnover is defined in Section 2(6) of the CGST Act 2017, and it is wider than most founders assume. It is PAN-level, not GSTIN-level; it adds up taxable supplies, exempt supplies, exports and inter-state supplies of all persons sharing the same PAN, across India, and it excludes CGST, SGST, IGST and cess. A group with GSTINs in three states adds all three together. Exporters who assume zero-rated supplies sit outside the computation are wrong — export revenue counts in full.
Who is covered
Who is exempted regardless of turnover
The proviso to Rule 48(4) excludes certain classes of registered persons from e-invoicing no matter their turnover: insurers; banking companies and financial institutions including NBFCs; goods transport agencies supplying road transport services; passenger transport suppliers; suppliers of services by way of admission to the exhibition of cinematograph films in multiplex screens; SEZ units (SEZ developers are covered); and government departments and local authorities.
⚠️ — confirm the current list of excluded classes and any SEZ-specific notification before relying on an exemption. The exemption list has been amended over time and the notified categories should be checked against the latest position.
Worked example: Meridian Tech Pvt Ltd crossed once, stays covered
Meridian Tech Pvt Ltd is a Bangalore-based SaaS company with two GSTINs — one in Karnataka, one in Maharashtra. Its PAN-level aggregate turnover:
Because FY 2020-21 crossed ₹5 crore, Meridian became a "covered person" permanently. Every B2B invoice it raises today — even though current turnover is under ₹5 crore — must carry an IRN, or Rule 48(5) voids the document and the customer's input tax credit fails. The common error is computing this GSTIN-by-GSTIN (each GSTIN under ₹5 crore) instead of at PAN level; the correct computation adds both GSTINs together.
What a director should actually watch
- Compute PAN-level aggregate turnover for every year from FY 2017-18 to FY 2025-26, not just the last year, and not GSTIN-by-GSTIN. Include exempt supplies, exports and every GSTIN.
- Verify on the portal, not by arithmetic. Go to einvoice.gst.gov.in → "e-Invoice Status of Taxpayer" and enter your GSTIN. If the portal shows you as enabled, you are covered. If it shows not-enabled but your own computation says you crossed the threshold, self-enable — the portal flag is administrative, the obligation is statutory.
- Remember B2G is covered. A private limited company supplying to a government department or PSU must e-invoice those invoices; B2G is not the same as B2C.
- Exemption is narrow. Being a services company, being an exporter, or being small this year does not exempt you. Only the specific classes in the proviso to Rule 48(4) are excluded.
FAQ
Our turnover fell below ₹5 crore. Can we stop generating e-invoices?
No. Notification No. 10/2023-CT reads "in any financial year from 2017-18 onwards." There is no exit provision. Once covered, permanently covered.
Do exports count toward the ₹5 crore aggregate turnover?
Yes. Section 2(6) of the CGST Act includes exempt supplies and exports in aggregate turnover. Zero-rated does not mean excluded from the computation.
Is the threshold test GSTIN-wise or PAN-wise?
PAN-wise. All GSTINs under the same PAN are aggregated across India. Two GSTINs at ₹3 crore each = ₹6 crore aggregate = covered.
Is a B2C invoice covered by e-invoicing?
No. B2C consumer invoices are outside e-invoicing. But a company above ₹500 crore has a separate dynamic-QR-code obligation on B2C invoices under Notification No. 14/2020-CT.
We are a manufacturing unit in an SEZ. Are we exempt?
SEZ units are excluded; SEZ developers are not. Confirm your classification and the current notification before assuming exemption.
What happens if we should have been e-invoicing but were not?
Rule 48(5) treats a covered invoice issued without an IRN as not an invoice at all — your buyer loses input tax credit, and Section 122(1)(i) exposes you to ₹10,000 or the tax evaded per invoice, whichever is higher.
Use the e-invoice applicability checker to test whether your turnover history puts you in scope: /tools/e-invoice-applicability-checker. For a GST compliance audit of your company, visit pvtltd.co.
Sources
- Rule 48(4), Rule 48(5) and proviso to Rule 48(4), CGST Rules 2017
- Section 2(6) CGST Act 2017 (aggregate turnover)
- Notification No. 10/2023-CT dated 10 May 2023 (₹5 crore threshold, effective 1 August 2023)
- Notifications 13/2020-CT, 61/2020-CT, 05/2021-CT, 01/2022-CT, 17/2022-CT (earlier thresholds)
- Section 122(1)(i) CGST Act 2017 (penalty for non-compliant invoice)
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