E-Invoice Limit in India (2026): The ₹5 Crore Rule, 30-Day Window & Who's Exempt

Half the calls we take about the e-invoice limit start with a buyer's accounts desk rejecting an invoice. I am Manoj, ERPNext and Frappe implementation lead at MithTech in Bengaluru — the liability-date conversation below is one we have with mid-market clients almost weekly.

How do you check your liability date?

Two inputs, one date. The finder walks the notification history and tells you when Rule 48(4) started applying to you — or how much runway you have left.

The mechanics behind the result: the CBIC notifies threshold tiers under Rule 48(4) CGST. Each tier covers every registered person whose AATO exceeded it in any financial year from 2017-18 onward. Liability begins at the tier's effective date — or, if you crossed later, from the start of the next financial year. That is why a business that touched ₹6 crore once in FY 2019-20 and shrank back has been liable since 1 August 2023, whether it knew or not.

The limit's fall from ₹500 crore to ₹5 crore

E-invoicing arrived in October 2020 as a big-company obligation. It stopped being one in under three years.

The same history as data, for the record:

Two things follow from that table. First, the ₹5 crore tier is not a resting point. GST Council discussions have repeatedly floated going lower, and every systems decision should assume the floor drops again. Second, the annual sweep is mechanical. Per the April 2026 GST changes, a business that crossed ₹5 crore during FY 2025-26 is covered from 1 April 2026 — alongside a fresh document-series requirement for the new financial year.

What exactly counts as aggregate annual turnover?

Most self-misdiagnoses trace to computing the wrong number. AATO under Section 2(6) of the CGST Act is:

• PAN-level — all GSTINs against the PAN, all states, aggregated. A Karnataka unit doing ₹3 crore and a Maharashtra unit doing ₹2.5 crore are one ₹5.5 crore business for this test.
• Broader than taxable sales — it includes exempt supplies, exports, and inter-state transfers between your own registrations. It excludes inward supplies under reverse charge and the taxes themselves.
• Tested against every FY from 2017-18 — the e-invoicing rules attach on a once-crossed-always-covered basis.

The GST portal publishes its own computed AATO for your PAN, with a facility to dispute it. Reconcile against that figure rather than your management accounts — the portal's number is the one the department acts on. Your CA owns the statutory computation. The threshold watcher below is a tripwire, not a substitute.

What is on the exemption list?

Exemptions are entity-category exclusions under Notification 13/2020 – Central Tax, as amended. Size does not enter into it — a ₹900 crore NBFC is out; a ₹6 crore auto-parts trader is in.

Two boundary cases generate most of the confusion. An SEZ unit is excluded as a supplier — but a mainland business invoicing to an SEZ still needs an IRN on that zero-rated B2B supply. And government departments were excluded by Notification 23/2021 — but PSUs and government companies are ordinary registered persons who follow the threshold like everyone else.

What does ignoring it cost?

An invoice that Rule 48(4) covers and Rule 48(5) invalidates is not a tax invoice at all. The consequences stack.

The statutory line is Section 122(1): an invoice issued without a valid document attracts the higher of ₹10,000 or 100% of the tax involved, per instance. Incorrect particulars add a further ₹25,000 exposure per invoice. But the number that moves boardrooms is the second card. Your customers' input tax credit sits on invoices that are legally not invoices. Procurement teams at larger buyers now run IRN verification on vendor bills — most laggards discover their liability date when a customer's accounts-payable desk rejects an invoice. Once that starts, the commercial damage outruns any penalty the department levies.

How ERPNext decides applicability

ERPNext's India localisation lives in the india_compliance app. Its applicability logic is worth reading because it encodes the law's structure directly. From india_compliance/gst_india/utils/e_invoice.py at line 529 (checked against india_compliance v16.6.0 / ERPNext v16.28.0):

def validate_e_invoice_applicability(doc, gst_settings=None, throw=True):
    ...
    if doc.company_gstin == doc.billing_address_gstin:
        return _throw(_("e-Invoice is not applicable for invoices with "
                        "same company and billing GSTIN"))            # :541

    if not (doc.place_of_supply == "96-Other Countries"
            or doc.billing_address_gstin):
        return _throw(_("e-Invoice is not applicable for B2C invoices"))  # :544
    ...
    applicability_date = get_e_invoice_applicability_date(doc.company,
                                                          gst_settings, throw)  # :563

Read bottom-up, that is the statute in code. B2C documents are refused at line 544 — unless they are exports, since 96-Other Countries supplies need IRNs despite having no buyer GSTIN. Self-billing between your own GSTINs is refused at line 541. Everything else gates on a per-company applicability date. That date comes from gst_settings.py:489 — get_e_invoice_applicability_date returns the global e_invoice_applicable_from, or a per-company override when Apply e-Invoice Only for Selected Companies is on. The 30-day reporting window is likewise a setting (e_invoice_reporting_time_limit_days), and the 24-hour IRN cancellation limit is enforced at e_invoice.py:592.

How do you switch it on in ERPNext?

Sales bills, accounts owns the mandate

The failure mode in mid-size firms is organisational, not technical. Sales raises invoices all day, and nobody in that chair reads CBIC notifications. Accounts finds out at GSTR-1 filing time that a month of invoices went out un-IRN'd. The split that works:

• Billing owns generation: IRN at submit, no exceptions, no "we'll regularise it Friday".
• Accounts owns the mandate. They hold the liability date, review the threshold watcher's monthly output, and are the only role allowed to change GST Settings. Treat e_invoice_applicable_from like a posting-period control, not a preference.
• A saved "Missing IRN" report — Sales Invoice, docstatus=1, billing_address_gstin set, irn empty, current month — is the daily reconciliation surface between the two roles. Zero rows is the only acceptable steady state.

How does the threshold watch work?

Everything above assumes you know where you stand relative to the line. Below ₹5 crore, that knowledge has a shelf life — one good quarter changes it. Four watchers, same guarantee: the mandate never arrives unannounced.

// Client Script · DocType: Sales Invoice · Apply To: Form
// Warns the biller when the company is near/over the e-invoice line but
// e-invoicing is still switched off in GST Settings. The AATO number is
// maintained by the server-side watcher (next tab) on a Company custom
// field: custom_aato_cr (Float).

frappe.ui.form.on("Sales Invoice", {
    validate(frm) {
        if (!frm.doc.billing_address_gstin) return; // B2C - out of scope

        frappe.db.get_single_value("GST Settings", "enable_e_invoice")
            .then((enabled) => {
                if (enabled) return;
                frappe.db.get_value("Company", frm.doc.company, "custom_aato_cr")
                    .then((r) => {
                        const aato = (r.message && r.message.custom_aato_cr) || 0;
                        if (aato >= 5) {
                            frappe.throw(
                                "AATO is " + aato + " cr but e-invoicing is DISABLED. " +
                                "This B2B invoice would be invalid under Rule 48(5). " +
                                "Enable e-invoicing in GST Settings before billing."
                            );
                        } else if (aato >= 4) {
                            frappe.msgprint(
                                "Heads-up: AATO is " + aato + " cr - within striking " +
                                "distance of the 5 cr e-invoice threshold. Plan the " +
                                "india_compliance sandbox test now."
                            );
                        }
                    });
            });
    },
});

Deploy the server-side watcher first — it maintains the custom_aato_cr field the client script reads. Run it as alert-only for a month. And resist the urge to hard-block invoicing below the actual threshold; the tripwire's job is lead time, not enforcement.

A watch policy you can lift into your SOP

e-Invoice Threshold Policy (draft — for CA / auditor review): Accounts recomputes FY-to-date turnover per company on the 1st of each month (scheduler job) and reconciles the PAN-level figure against the GST portal's AATO quarterly. At ₹4.0 crore FY-to-date, india_compliance sandbox testing is scheduled and IRP credentials are created. At ₹4.5 crore, e-invoicing is enabled in a UAT bench and billing staff complete a dry run. On the earlier of (a) statutory liability or (b) crossing ₹5 crore in-year, e_invoice_applicable_from is set and IRN-at-submit goes live. The applicable-from date is changed only by the finance controller, with the change logged. Ratify the trigger levels with your CA before adoption — a business with seasonal Q4 revenue should pull every trigger earlier.

Should you choose Act now or backlog it?

FAQ

What happens if we keep issuing B2B invoices without IRNs?. Each such invoice is not a valid tax invoice under Rule 48(5). Section 122 exposes you to the higher of ₹10,000 or 100% of the tax per document. Your buyers' input tax credit on those invoices becomes contestable, and buyer AP desks increasingly reject un-IRN'd bills outright. The exposure calculator above puts a number on your current run rate.

Which ERPNext and india_compliance versions does this post apply to?. Code citations are from india_compliance v16.6.0 on ERPNext v16.28.0. The applicability validator and GST Settings fields have the same structure in v15. The statutory thresholds are version-independent — they bind whatever software you run.

What related issues might you also hit?

• ERPNext GST e-invoicing: the IRP round-trip — schema, signed QR, and every failure mode between Submit and IRN.
• The 30-day and 24-hour e-invoice windows — the operational deadlines that start mattering the day this post's mandate attaches.
• GST return filing from ERPNext — where un-IRN'd invoices surface as GSTR-1 mismatches.

What is the bottom line?

The e-invoice limit stopped being a big-company concern the day it hit ₹5 crore. The once-crossed-always-covered rule means thousands of businesses are already liable without knowing their date, and the threshold has only ever moved in one direction. Find your date, set the applicable-from field to match it, and put the watcher on. The ERPNext implementation work is a fortnight — discovering the mandate through a customer's rejected invoice is a quarter of firefighting.