Bottom line: These are two separate compliances that people constantly confuse. E-invoicing is about how you create your tax invoice — if your annual turnover has ever crossed Rs. 5 crore in any year since 2017-18, every B2B invoice and export invoice must carry an IRN (Invoice Reference Number) generated from the government portal. An e-way bill is about moving goods — the moment a consignment worth more than Rs. 50,000 leaves your premises, it needs an electronic pass, regardless of your turnover. One can apply without the other, and getting either wrong exposes you to real penalties and, worse, denies your customer their input tax credit.
This guide sets out exactly who has to comply with each, who is exempt, the deadlines that trip businesses up (including the newer 30-day reporting rule and mandatory 2-Factor Authentication), and the specific penalty sections you should be aware of. If you are unsure where your business stands, you can always run the numbers past us on Ask a CA — GST.
E-invoicing: who must comply
E-invoicing does not mean generating a PDF invoice from your accounting software. It means uploading the invoice details to the Invoice Registration Portal (IRP), which validates them and returns a unique IRN plus a signed QR code. Only then is the invoice legally valid.
The applicability test is turnover-based. If your aggregate annual turnover (AATO) crossed Rs. 5 crore in any financial year from 2017-18 onwards, e-invoicing is mandatory for you. This threshold has been in force since 1 August 2023, when it was reduced from the earlier Rs. 10 crore limit. The key nuance most people miss: the test looks at any past year, not just the last one. If you touched Rs. 5.2 crore in FY 2022-23 and have since dropped to Rs. 4 crore, you are still covered and must continue e-invoicing.
E-invoicing applies to B2B supplies, supplies to SEZs, exports, and deemed exports. It does not apply to B2C invoices (sales to consumers). It also does not cover documents like delivery challans, bills of supply, or bills of entry.
Who is exempt from e-invoicing
Even above the Rs. 5 crore threshold, certain classes of registered persons are specifically excluded from e-invoicing. These are:
- Banks, insurance companies, and other financial institutions / NBFCs
- Goods Transport Agencies (GTAs) transporting goods by road
- Passenger transport service providers
- Suppliers of services by way of admission to a multiplex cinema exhibition
- Special Economic Zone (SEZ) units (note: SEZ developers are not exempt)
- Government departments and local authorities
The 30-day reporting rule you cannot ignore
From 1 April 2025, taxpayers with an AATO of Rs. 10 crore or more must report every invoice to the IRP within 30 days of the invoice date. Miss the window and the portal will simply reject the invoice — you cannot generate a valid IRN for it afterwards, which means the document is not a legal tax invoice and your buyer cannot claim ITC on it. For a business raising month-end invoices, this effectively kills the old habit of “we’ll upload it whenever”. Smaller e-invoicing taxpayers (AATO between Rs. 5 crore and Rs. 10 crore) do not yet face the 30-day cut-off, but the direction of travel is clear.
E-way bills: who must comply
An e-way bill (Form GST EWB-01) is required whenever there is movement of goods of consignment value exceeding Rs. 50,000 — whether for a sale, a stock transfer to your own branch, a sales return, or even inward supply from an unregistered person. Consignment value here means the invoice value including GST but excluding the value of exempt goods carried in the same vehicle.
The Rs. 50,000 limit is the standard for inter-state movement. For intra-state (within-state) movement, individual states set their own thresholds, and several have raised them — for example, many states allow intra-state movement up to Rs. 1 lakh, and some sector-specific limits go higher. Always check your own state’s notification before assuming Rs. 50,000 applies locally.
The form has two parts. Part A captures the consignment details — recipient GSTIN, delivery pincode, invoice number and date, value, HSN code and reason for transport. Part B captures the vehicle number or transporter document details. The bill is only complete once Part B is filled; validity is counted from that point.
Validity, 2FA and responsibility
Validity is distance-based: one day for every 200 km (or part thereof) for regular cargo, counted from the first Part B entry. So a 310 km journey gives you two days. From 1 April 2025, 2-Factor Authentication is mandatory to log in to the e-way bill portal, so make sure your registered mobile number is active before your goods are ready to move.
Responsibility to generate the bill falls first on the registered supplier. If the supplier does not, the registered recipient or the transporter must. Importantly, when an unregistered supplier sells to a registered recipient, the registered recipient must generate the e-way bill as though they were the supplier.
Worked example: a Rs. 8 crore turnover trader
Suppose Sharma Traders had turnover of Rs. 8 crore in FY 2024-25 and sells industrial spares. In July 2026 they dispatch a B2B consignment worth Rs. 2,36,000 (Rs. 2,00,000 + 18% GST) to a customer 250 km away.
| Compliance step | What Sharma Traders must do | Deadline / rule |
|---|---|---|
| E-invoice | Above Rs. 5 crore, so upload invoice to IRP and obtain IRN + QR code before/at issue | Report within 30 days (AATO > Rs. 10 cr) — here Rs. 8 cr, so 30-day rule not yet applicable, but IRN still mandatory |
| E-way bill | Consignment value Rs. 2,36,000 > Rs. 50,000, so generate EWB-01 (Part A + Part B) before movement | Valid 2 days (250 km ÷ 200 = 2) |
| Login | Complete 2FA on both portals | Mandatory from 1 April 2025 |
If Sharma Traders forgets the IRN, the invoice is not valid and its customer cannot claim the Rs. 36,000 ITC. If it forgets the e-way bill, the vehicle can be detained in transit. You can sanity-check the GST on any invoice using our GST Calculator.
Penalties: what non-compliance actually costs
For e-invoicing failures, penalties flow from Section 122 of the CGST Act. Not issuing an e-invoice where required attracts a penalty of Rs. 10,000 or 100% of the tax due, whichever is higher. An incorrect e-invoice can attract Rs. 25,000 per invoice. The bigger commercial cost is that an invoice without a valid IRN is treated as no invoice at all, so your customer loses their ITC and will not pay you happily.
For e-way bill failures, moving goods without a valid e-way bill attracts action under Section 129 (detention and seizure). Where the owner comes forward, the penalty is 200% of the tax payable on the goods (for exempt goods, 2% of value or Rs. 25,000, whichever is lower). If the owner does not come forward, the exposure is even higher — up to 50% of the value of the goods. In the worst case, Section 130 allows confiscation of the goods and the conveyance. There is also a residual minimum penalty of Rs. 10,000 or the tax sought to be evaded, whichever is higher.
Key takeaways
- E-invoicing applies if your AATO crossed Rs. 5 crore in any year since 2017-18 — it is a one-way gate; dropping below later does not exempt you.
- E-invoicing covers B2B, exports, deemed exports and SEZ supplies — not B2C.
- Banks/NBFCs, insurers, GTAs, passenger transport, multiplex cinemas, SEZ units, and government bodies are exempt from e-invoicing even above the threshold.
- From 1 April 2025, businesses with AATO of Rs. 10 crore+ must report invoices within 30 days or lose the ability to generate an IRN.
- An e-way bill is needed for goods movement above Rs. 50,000 (inter-state); intra-state limits vary by state. Validity is one day per 200 km.
- 2FA is mandatory on both portals from 1 April 2025.
- Penalties: Section 122 (Rs. 10,000 / 100% of tax) for e-invoice defaults; Section 129 (200% of tax, detention) for e-way bill defaults — plus loss of ITC for your buyer.
Frequently Asked Questions
My turnover is Rs. 6 crore but I only sell to consumers (B2C). Do I need e-invoicing?
You are above the threshold, so you are an “e-invoicing taxpayer”, but e-invoicing itself applies only to B2B, export and SEZ supplies. Pure B2C invoices do not require an IRN. However, if you make even one B2B supply, that invoice must carry an IRN. Many such businesses are also required to print a self-generated dynamic QR code on B2C invoices under a separate rule.
Do I need both an e-invoice and an e-way bill for the same sale?
Often yes. They serve different purposes. If you are above Rs. 5 crore turnover and the consignment exceeds Rs. 50,000, you need an IRN for the invoice and an e-way bill for the movement. Conveniently, once an e-invoice is generated, Part A of the e-way bill can be auto-populated from it, so you only add the vehicle details.
I crossed Rs. 5 crore this year for the first time. From when does e-invoicing apply?
E-invoicing applies from the first day of the financial year immediately following the year in which you crossed the threshold. So if you crossed Rs. 5 crore during FY 2025-26, e-invoicing becomes mandatory from 1 April 2026. Do not wait for a separate notice — the obligation is automatic.
The goods are moving less than 50 km. Do I still need an e-way bill?
For movement within the same state up to 50 km between the consignor/consignee and the transporter, Part B (vehicle details) can be left unfilled, but Part A is still generally required once the value crosses Rs. 50,000. The under-50-km relaxation reduces paperwork; it does not remove the e-way bill entirely for high-value consignments.
What happens if my e-way bill expires while goods are still in transit due to a breakdown?
You can extend the validity of an e-way bill either within eight hours before, or within eight hours after, its expiry, recording the reason (such as a vehicle breakdown or natural calamity). Do this promptly — moving goods under an expired e-way bill is treated the same as moving them with none, and the vehicle can be detained under Section 129.
Not sure if e-invoicing applies to you? Use our free e-Invoice Applicability Checker — enter your preceding-year turnover and business type to see instantly whether GST e-invoicing is compulsory, from which year, and whether the 30-day IRP reporting rule affects you.