GST e-invoicing in 2026: who needs it, how to generate one and common mistakes

Here's the headline: if your business turnover crosses ₹5 crore, GST e-invoicing is compulsory. It means getting each B2B invoice validated by a government portal before you send it out.

It tends to creep up on people. One day a big customer asks why your invoice isn't showing in their records; another day a marketplace rejects it. Get e-invoicing wrong and you directly hurt your buyers' tax credit — and your relationship with them.

Below: what e-invoicing actually is, who must do it, the step-by-step process, and the mistakes that cause rejections. Need it set up? Our GST team handles the whole thing.

What e-invoicing is — and what it isn't

E-invoicing is not a new invoice format. Your invoice can look exactly as it always has. What e-invoicing adds is a validation layer: before you send an invoice to a customer, you submit its data to the Invoice Registration Portal (IRP), which validates it and returns a unique Invoice Reference Number (IRN) and a digitally-signed QR code. You embed these on your invoice.

The key consequence: when you generate an IRN, the invoice data is automatically pushed to your GSTR-1 — and your buyer's GSTR-2B is auto-populated. This is why buyers insist on e-invoices. Their ITC depends on your compliance.

Who must generate e-invoices in FY 2026–27

E-invoicing is mandatory for businesses with aggregate turnover exceeding ₹5 crore in any financial year from FY 2017–18. It applies to:

• B2B supplies: invoices raised to GST-registered buyers
• B2G supplies: invoices to government departments
• Exports: goods and services exported
• Reverse charge supplies
• Linked credit and debit notes

Not covered: B2C supplies (invoices to unregistered consumers), financial institutions, insurance companies, SEZ units, and banking companies — these are exempted by specific CBIC notifications.

How to generate an IRN: step by step

Most businesses integrate their accounting software or ERP with the IRP rather than uploading invoices manually. The flow:

• Step 1: Create the invoice in your billing system with all mandatory fields — supplier and buyer GSTINs, HSN/SAC codes, invoice value, tax breakup, place of supply.
• Step 2: Your software sends the invoice data to the IRP (einvoice1.gst.gov.in or a private IRP) via API or JSON upload.
• Step 3: The IRP validates the data, generates a unique 64-character IRN, stamps a digital signature and QR code, and returns these within seconds.
• Step 4: Your invoice prints or emails with the IRN and QR code embedded. The invoice data auto-populates your GSTR-1.

If you're not integrated with accounting software, the IRP's offline tool and web interface handle manual entry, though these are impractical at any volume above a handful of invoices.

Cancellation and amendments

An IRN can be cancelled within 24 hours of generation, provided the invoice has not been linked to an e-way bill. After 24 hours, cancellation at the IRP level is not possible — if the invoice is incorrect, you must issue a credit note instead. Any amendment must be handled through GSTR-1 corrections and credit/debit notes. This is why getting the GSTIN and HSN details right before generating the IRN matters.

Common errors that cause rejections

• Incorrect or inactive GSTIN: The IRP validates GSTINs in real time. A mistyped or lapsed GSTIN causes immediate rejection.
• Missing mandatory fields: HSN code, place of supply, invoice number format issues.
• Duplicate IRN attempts: The IRP rejects an invoice that duplicates a previously generated IRN for the same supplier-invoice number combination within a financial year.
• Trying to cancel after 24 hours: The portal simply won't allow it. Plan the correction as a credit note from the outset.

Frequently asked questions

What if I raise a B2B invoice without an IRN?

The invoice won't auto-populate your buyer's GSTR-2B, putting their ITC at risk. You'll need to enter it manually in GSTR-1. There's also a penalty provision under the GST Act for non-compliance, though enforcement varies by jurisdiction.

My accounting software doesn't support e-invoicing. What now?

Switch to a GST-compliant billing tool — Tally Prime, Zoho Books, Vyapar and several others support e-invoicing natively. For low volumes, the IRP web portal works, but it's not sustainable above a dozen invoices a month.

Do exports need an IRN?

Yes, if your turnover is above ₹5 crore. Export invoices to foreign buyers require an IRN just like B2B domestic invoices.

Will the ₹5 crore threshold reduce further?

It's been cut progressively — from ₹500 crore at launch to ₹5 crore today. Many tax professionals expect it to reach ₹1 crore or lower within the next couple of years. If you're close to the threshold, it's worth setting up e-invoicing now.