E-Invoice Limit: Rules & Exemptions for 2025

Tech has been advancing at breakneck speed, and the GST Network (GSTN) will not be left behind. In 2020, the GST Council of India adopted e-invoicing for GST, a move that revolutionized the way businesses handle their tax filings and invoicing. 

In the last 5 years, there have also been countless changes made to e-invoicing, including GST e-invoice time limits, minimum aggregate turnovers, and other criteria. 

When running a business, it's crucial to know the ins and outs of invoicing, taxes, and new regulations. With new ones cropping up now and then, this can be overwhelming. 

In this article, we cover everything regarding GST e-invoice limits, the filing process, and the future of e-invoicing. Keep reading to know more!

• E-invoicing is a system where businesses are required to generate electronic invoices, and then report and upload them to the Invoice Registration Portal (IRP). It was introduced in 2020 and has since been updated several times to include more business types. 

• The e-invoicing system is mandatory for all B2B and B2G businesses with an annual aggregate turnover exceeding Rs. 5 crore. Starting 1 April 2025, businesses with an AATO of Rs. 10 crore or more must upload their invoices to the IRP within 30 days of issuance.

• Keeping up with GST e-invoicing requirements is important to maintain compliance and avoid penalties and fines. Failing to report an invoice within 30 days of generation can lead to rejection by the IRP, regulatory penalties, and fines. 

E-invoicing refers to a system where businesses must generate invoices electronically (hence the name), which are then reported digitally to the GST portal online (also known as the Invoice Registration Portal, or IRP). 

The IRP will then validate the invoice and assign it an IRN, or Invoice Reference Number. By this system, invoices have to be created in a standardized electronic format, which helps reduce errors and enhance compliance and security. The NIC (National Informatics Center) is the primary IRP. 

E-invoicing is a simple process that streamlines the GST filing process and reduces the likelihood of tax evasion. Here's a breakdown of how it’s done:

1. Generating an invoice

Businesses and taxpayers have to continue generating invoices electronically, just as they normally do, but now they have to follow a fixed e-invoice schema and meet mandatory parameters. 

2. Generating an IRN 

Next, the taxpayer has to generate what's known as a "hash," which is based on parameters such as the supplier's invoice number, financial year, and supplier's GSTIN. If the hash is validated, it becomes the Invoice Reference Number (IRN). 

3. Uploading the JSON

Once a business creates an e-invoice, all of the information and details are consolidated into a JSON file. The JSON can be uploaded directly to the IRP, through the GST Suvidha Provider (GSP), or through a third party.

4. Generating and validating the hash 

If your business uploaded an invoice without the hash, the hash generated by the IRP will become the IRN. In case you have uploaded the hash, the IRP will perform a de-duplication check and validate the IRN and hash against the GST System's Central Registry. After validation, the new IRN is stored in the Central Registry, and the IRP generates a QR code. 

E-invoicing under GST is a system where B2B invoices are digitally uploaded and authenticated by the IRP. Initially introduced in 2020, there have since been many updates to the mandated regulations, the latest one coming into effect in April 2025. As of now, the e-invoicing is mandatory for businesses with an Annual Aggregate Turnovers (or AATOs) of Rs. 5 crore or more.

According to the newest change in 2025, businesses with AATOs of more than Rs. 10 crore or above are required to report e-invoices to the Invoice Registration Portal within 30 days from the date of issue of the document. 

Earlier, this 30-day period only applied to businesses with AATOs of more than Rs. 100 crore or more. Failing to comply with this new deadline and threshold can lead to fines and penalties.  

To get an e-invoice, follow this process: 

Create an invoice 

First, create an e-invoice the way your business normally would. This can be done using any billing or accounting software, as long as it follows the required format of e-invoicing. It is important to note that it is not necessary to generate the e-invoice solely via the government portal. 

Get an IRN

Next, the e-invoice has to be reported to the Invoice Registration Portal (IRP), which will validate the data and assign a unique Invoice Reference Number (IRN). The IRN is 64 characters long and must be generated for all documents submitted. 

Upload the e-invoice to the IRP.

Once the IRN has been created, it has to be uploaded onto the IRN along with the JSON file for each invoice

Validate the information 

The IRP will validate the details in the JSON file. If the supplier has not created a hash, the IRP will make one, and that will be the IRN. If the supplier has created the hash, it will be checked for duplication and then validated against the central GST Network (GSTN) for the IRN and hash. 

Get your QR code and digital signature

Once validated, the e-invoice system creates an IRN, following which a QR code is generated, and a digital signature needs to be done. The QR code is essential- it allows you quick and easy access to invoices and includes information like:

• The supplier and recipient's GSTIN
• The invoice number 
• Date on which the invoice was generated 
• The value of the invoice 
• The unique IRN and HSN code of items 

Data is transmitted to the e-Way Bill Portal and GST System

The data uploaded onto the IRP is then transmitted to the e-Way Bill Portal and GST System. It can be used to autopopulate other fields, such as the GSTR 1. 

Obtain your e-invoice receipt 

Once all the steps have been completed, the IRP portal will return the IRN, QR code, and JSON to your email.

The time limit for generating an e-invoice is 30 days from the date of invoicing. This update applies to all businesses with an AATO of more than Rs. 10 crore, since April 1, 2025. 

A time limit for generating an e-invoice is the maximum time allowed to report the invoice (from the date of generation) to the IRP and generate an IRN. If you try uploading the invoice after this window has passed, the IRP will reject it and consider it invalid for GST compliance. It can also not be used for claiming any input tax credit. 

It is crucial to adhere to GST e-invoice time limits, or the following problems may occur:

• Compliance risks: If the 30-day window is missed, your business risks penalties, scrutiny, and problems during audits. 

• Penalties: If the e-invoice is not generated, your business may face a penalty of Rs 10,000 or 100% of the tax amount (whichever is higher) for every invoice. 

• Administrative problems: Rejected invoices will also cause additional administrative burdens, since they will need to be reissued. They also add to potential future errors and added workload. 

Currently, firms with an AATO of more than Rs. 5 crore are required to generate e-invoices. And businesses that have an AATO exceeding Rs. 10 crore should upload their e-invoice to the IRP within 30 days from the date of issuance. 

This applies to almost all organizations, including multinational corporations, LLPs, MSMEs, sole proprietors, and so on. The types of transactions that GST e-invoicing applies to include:

• B2B: Business-to-business transactions
• B2G: Business-to-government transactions 
• SEZ developers transactions
• Export transactions and deemed exports
• Deemed supplies 
• Debit and Credit Notes 

According to the CBIC (Central Board of Indirect Taxes and Customs), there are some exceptions to the applicability of GST e-invoices. These include:

• Companies in the banking and finance sector, such as insurers, banks, and non-banking financial companies. 

• Goods transport agencies that transport goods via road. 

• Passenger transport service suppliers. 

• Any registered individuals who provide services by admitting visitors to the exhibition of cinematograph films on multiplex screens. 

• SEZ units (not including SEZ developers). 

• Local authorities and government departments. 

E-invoicing also brings significant benefits for both domestic and international trade by cutting costs, ensuring compliance, and helping businesses avoid penalties and administrative delays. 

Here‘s how e-invoicing plays into international and domestic trade:

International trade

For international trade, e-invoicing is a crucial tool. It streamlines internal tax administrations, automating and improving the flow of customs and information exchange. Tax authorities can receive real-time information on when an invoice is issued and verify it directly with customs. E-invoicing also gives the taxpayer better administrative and fiscal control. 

Domestic trade 

Domestic trade also benefits from e-invoicing. The most significant benefit is tracking and control, both of which are made easier and more efficient through e-invoicing. Transaction details are saved and readily available whenever needed. 

It also reduces the time required to generate an invoice, improving productivity and reducing manual labour requirements. The reduction in human error, cost-effectiveness, streamlining of financial operations, and enhanced data security are major plus points of e-invoicing. 

E-invoices are used across industries, from retail, logistics, manufacturing, e-commerce, consulting, and other services, and even healthcare. Here's how it's used across all different types of businesses:

1. Exports

E-invoicing for exporters helps maintain cross-border trade compliance because transactions have to be validated using government systems. This makes customs clearance quicker, as well as foreign exchange reconciliation simpler. 

2. Freelancing

Freelancing also becomes more standardized, makes the tax filing process easier, and has reduced error rates when using e-invoices. 

3. Manufacturers

Manufacturers also benefit from e-invoicing, as it helps streamline transactions within the supply chain. This is especially useful for manufacturing businesses dealing with thousands of invoices daily. Paper tracking can be messy and prone to mistakes, which is solved by e-invoicing. 

4. E-commerce stores

E-commerce is a booming sector that continues to grow. As operations are mainly in the digital space and deal with several transactions between buyers, suppliers, and other logistical partners, e-invoicing helps to ensure accurate and standardized records. It also maintains a clear audit trail and ensures GST compliance for businesses. 

5. Other service providers

Standardization of invoicing is also crucial for service providers. E-invoicing helps maintain GST compliance, improve transparency, reduce errors, lessen the burden of paperwork, and improve trust with customers. 

E-invoicing and commercial invoices can often be mistaken for one another. However, they are different types of documents. Here's how they differ:

Some other documents frequently confused with e-invoices are purchase orders and quotations. Here are the differences between them:

Electronic invoices typically feature key elements, including the Invoice Reference Number (or IRN), digital signatures, and a QR code, which make them effective. They ensure authenticity, prevent tax fraud, and more streamlined data management. These include:

• The name, GSTIN, and address of the supplier
• A tax invoice number of 16 characters
• The date of issue 
• The name, address, and GSTIN of the recipient (if they are registered)

In case the buyer is not registered and the value of the purchase is more than Rs. 50,000, then the invoice must contain the following:

• The name and address of the receiver 
• Delivery address 
• Estimated delivery time
• State name and code 
• HSN code of goods
• Service accounting code for services
• Currency
• Payment terms
• Description of the good or service
• Quantity of goods and unit in UQC
• Total value of the goods or
• The taxable value of the supply 
• The applicable GST rate (for example, CGST, SGST, IGST, UTGST, Cess)
• Name of supply and destination for any interstate transactions 
• If GST is payable on a reverse charge basis 
• The signature of the supplier or their authorized representative 

E-invoicing does not come without its challenges, the most common of which include:

1. Formatting challenges 

Since different businesses use different systems and e-invoicing platforms, it could create problems in formatting. GST e-invoices require a standardized format, so it is crucial to use a platform or e-invoicing tool that can adhere to it, such as Xflow. 

2. Missing regulatory information 

This leads us into the following problem: missing information. Any errors in the data, like incorrect tax calculations, duplicate entries, missing fields, and data mismatches, can cause compliance issues. It is vital to ensure e-invoices are accurate and complete before uploading to the IRP. 

3. Fraud and security risks 

While e-invoicing is generally safer and more secure than paper invoicing, it can be prone to cyberattacks, phishing, or even invoice tampering. 

4. Implementation expenses

E-invoicing tools sometimes have high initial setup costs, subscription fees, or require costly hardware and software upgrades. This can make it an expensive endeavor for MSMEs and startups. 

5. Exchange rate risks 

Many businesses have to handle transactions in different currencies or have clientele in other countries across the world. Apart from the risks associated with profits due to currency fluctuations, it can also make it challenging to record e-invoices accurately. 

To ensure your business can have a smooth taxation and invoicing process, here are some of the best practices to follow:

• E-invoice generating software: Determine what your business requires, and use an e-invoicing platform that suits those requirements. It must also be able to create e-invoices that follow the standardized GST format. 

• Formatting and standardized templates: All e-invoices need to follow a specific format and contain certain key features. To avoid bottlenecks, compliance issues, or the rejection of an e-invoice later on, ensure that the formatting is correct from the get-go. Xflow offers standard templates for e-invoicing, making generation easier and more streamlined, reducing the need for manual re-checking. 

• Automate your workflow: Automated workflows significantly improve the efficiency of the e-invoicing process. It reduces the need for labor, reduces delays, and decreases the chance of human error. 

• Digital signatures: Digital signatures help signify the authenticity of the invoice. They are essentially like a verifiable stamp that prevents fraud and complies with legal standards. 

• Currency conversion: E-invoices enable businesses to track exchange rates and currency fluctuations, allowing them to implement strategies that mitigate future risks. 

• Stay up-to-date on regulations: Lastly, laws are constantly changing and being updated. To ensure proper compliance, remember to check for updates regularly. This prevents any compliance errors, penalties, and fines your business may incur for improper invoicing. 

• Use Xflow’s Invoice Auto-Reader: Xflow implements a document parser to extract your invoice number, amount, partner details, due date, and invoice date, along with any other required fields from your uploaded PDF invoice. It then maps these values to the invoice creation form, and you can review and confirm the invoice before it’s created. 

Xflow’s Invoice Auto-Read will do the following for you:

• Reduce repetitive work 
• Prevent typing errors and copy-paste 
• Speed up your invoice creation process
• Make your workflow more responsive, less mechanical 

E-invoicing is made more efficient when paired with different invoicing and payment platforms. These include:

1. Xflow

Xflow is a platform that specializes in receiving cross-border payments. It also offers standardized and custom e-invoicing templates, which can help reduce delays, maintain compliance, and ensure financial accuracy. It is especially effective for businesses dealing with foreign clientele. 

2. ERP systems

ERPs, or Enterprise Resource Planning, like Oracle, are widely used in the manufacturing industry and supply chain. Integrating e-invoicing with ERPs helps create an accurate audit trail throughout the supply chain. 

3. Accounting tools 

Accounting tools like Tally or Zoho Books also offer e-invoicing solutions. These can help ensure a standardized format, compliance with GST regulations, and reduced manual error.

Here are some of the legal and regulatory compliances that you should be aware of for GST e-invoicing:

GSTN 

The GST Network or GSTN is primarily responsible for governing e-invoicing. For example, the CGST Act and Rules govern the format, contents, reporting requirements, and applicability of GST e-invoicing. It also covers non-compliance penalties. For example, Rule 48(4) of the CGST Rules classifies the classes of people who are required to prepare and upload an e-invoice onto the IRP and generate an IRN. 

RBI

The RBI does not directly regulate GST e-invoicing. However, specific RBI regulations may have an impact on e-invoicing, especially about payment gateways, banking, foreign exchange regulations, and more. While RBI does not regulate GST compliance directly, its provisions apply to payment, settlement, and cross-border trade linked with e-invoices.

Export requirements 

Exporters, like any other business, are required to create GST e-invoices. This can facilitate the acceptance of foreign exchange payments, customs clearance, and more. It also ensures compliance with regulations (domestic and foreign), since invoices have to be validated by the government portal. 

E-invoicing has been bringing the country into the future, and as technology progresses, so will the e-invoicing system. Some future trends that are predicted to influence GST e-invoicing include:

Artificial Intelligence 

AI has been entering into every aspect of business, and e-invoicing is no exception. Artificial intelligence may be efficiently used to improve customer support, detect fraud and invoice duplication, and more in the future. 

Automation

Automated invoicing solutions will also likely increase in popularity. These will help streamline and speed up business operations, reduce manual errors, and allow financial departments to focus on other essential functions rather than invoice generation. 

Mobile invoicing 

Mobile invoicing is also likely to gain popularity, particularly as remote work and commerce continue to become more popular. It will allow businesses (especially MSMEs and startups) to create e-invoices from their mobile devices. 

Unlike other payment and transfer platforms, Xflow brings scalability, adaptability, and better control to your business. Our international payments API is easy to integrate, is powerful, and allows you to receive cross-border payments with ease. You no longer need to worry about foreign exchange rates and payment bottlenecks!

We offer faster, cheaper collections of payments, allowing you to receive and settle international payments within one business day. We also have no hidden fees, offer unlimited transaction sizes, and provide an all-in-one API. Our compliance is handled through our integration with RBI-authorized banks and fraud monitoring systems, ensuring you never have to worry about safety or compliance. 

Xflow also offers customizable e-invoicing templates, so you can remain compliant while honoring your brand's image and message. If your business regularly uploads invoices on Xflow to withdraw funds, receives invoices in standard formats from repeat clients, or you manage invoices for a team and want to avoid the back-and-forth related to data entry errors, then Xflow’s Invoice Auto-Reader is for you!