What is GST e-invoicing?
GST e-invoicing means reporting each invoice to an Invoice Registration Portal (IRP) before it is given to the buyer. The IRP validates the invoice, gives it a unique Invoice Reference Number (IRN) and returns a digitally signed QR code. The IRN and QR code must appear on the invoice the buyer receives. The invoice data then flows from the IRP into the supplier's GSTR-1 and, for e-way bills, Part A can be generated from the IRN.
The rules are in rule 48(4) of the CGST Rules, 2017, and Notification No. 13/2020-Central Tax, as amended. An invoice that should have been reported but was not has no IRN and is not treated as a valid tax invoice (rule 48(5)), which puts the buyer's input tax credit at risk.
Who must e-invoice?
A business must e-invoice if its aggregate annual turnover (AATO) has exceeded ₹5 crore in any financial year from 2017-18 onwards, for every GSTIN under the same PAN (Notification No. 10/2023-Central Tax, from 1 August 2023). Once crossed, the obligation continues even if turnover later falls.
Some businesses are exempt whatever their turnover:
- Special Economic Zone units (not SEZ developers)
- Insurers, banking companies, financial institutions and NBFCs
- Goods transport agencies
- Suppliers of passenger transport services
- Suppliers of admission to cinema exhibitions in multiplex screens
- Government departments and local authorities
Which documents are covered?
| Covered | Not covered |
|---|---|
| B2B tax invoices | B2C invoices (large businesses print a dynamic QR code on these instead) |
| Credit notes and debit notes | Delivery challans, bills of supply |
| Exports, supplies to SEZs and deemed exports | Supplies by the exempt categories above |
| From 1 January 2027: reverse-charge self-invoices for purchases from unregistered persons and for imports of services |
The 2027 extension follows the 57th GST Council meeting on 8 October 2026 and was notified by Notification No. 04/2026-Central Tax. The e-invoice schema adds two supply types for it: RCMDOM for domestic purchases from unregistered persons and RCMIMP for imports of services. For most SAP users this is the biggest change in years, because these self-invoices are created on the purchase side, not in billing.
What are the time limits?
- 30-day limit: businesses with AATO of ₹10 crore or more cannot report an invoice to the IRP more than 30 days after its date (since 1 April 2025). The IRP rejects it, and without an IRN the invoice is not valid.
- Cancellation: an IRN can be cancelled on the IRP within 24 hours, and only in full. After that, a correction needs a credit or debit note, or an amendment in GSTR-1.
- Before issue: the invoice must be reported, and the IRN and QR code printed, before the invoice is given to the buyer.
What is IMS, and how does it change input tax credit?
The Invoice Management System (IMS) on the GST portal shows a buyer every invoice and note its suppliers have reported in GSTR-1 or the IFF. For each record, the buyer can:
- Accept it: the credit flows into GSTR-2B and then into GSTR-3B.
- Reject it: it stays out of GSTR-2B, and the supplier has to correct it.
- Keep it pending: it stays out of this month's GSTR-2B and is carried to the next month.
Records the buyer takes no action on are treated as accepted when GSTR-2B is generated on the 14th of the following month. If the buyer changes its actions after that, GSTR-2B can be recomputed before GSTR-3B is filed.
So the buyer's tax team now decides, invoice by invoice, which credits to take. That decision is only as good as the match between the supplier's records and the purchase records in SAP.
What changes in SAP?
| Area | What changes |
|---|---|
| Master data | GSTINs for every plant and business place; customers' and vendors' GSTINs; HSN codes at 6 digits for businesses above ₹5 crore; units of measure mapped to GST UQCs |
| Outgoing documents | SD billing documents and FI invoices, credit notes and debit notes converted to the IRP's JSON schema and reported before the invoice is printed or sent |
| IRN and QR code | IRN, acknowledgement number and signed QR code stored against the SAP document and printed on the invoice output |
| Controls | Checks that block printing without an IRN, flag invoices nearing the 30-day limit, and cancel within 24 hours when needed |
| RCM self-invoices (from 2027) | Self-invoices for purchases from unregistered suppliers and for imported services created from MM and FI documents and reported with the RCMDOM or RCMIMP supply type |
| IMS and GSTR-2B | Supplier records compared with SAP purchase invoices and goods receipts before accepting, rejecting or keeping them pending |
How do OptiE-Invoice, OptiGST and OptiGSTReco handle it?
- [OptiE-Invoice](/platform/taxation/optieinvoice/) extracts invoices from SAP SD and FI, converts them to the IRP schema, validates them, reports them and stores the IRN and signed QR code in the billing document, with the QR code embedded in the invoice output. It processes invoices in bulk, at any volume.
- [OptiGST](/platform/taxation/optigst/) prepares and files GSTR-1, GSTR-3B and GSTR-9 from SAP data, with cross-checks against the e-invoice data.
- [OptiGSTReco](/platform/taxation/optigst-reco/) matches SAP purchases with GSTR-2A and GSTR-2B, so the tax team knows which supplier records to accept, reject or follow up.
Frequently asked questions
Is e-invoicing mandatory for a business with ₹5 crore turnover?
It is mandatory once aggregate annual turnover has exceeded ₹5 crore in any financial year from 2017-18 onwards, unless the business falls in an exempt category such as banks, insurers, GTAs or SEZ units.
What is the 30-day limit for e-invoices?
Businesses with aggregate annual turnover of ₹10 crore or more cannot report an invoice to the IRP more than 30 days after the invoice date. The IRP rejects late invoices.
Do exports need an e-invoice?
Yes. Exports, supplies to SEZs and deemed exports are covered, along with B2B invoices, credit notes and debit notes.
Do reverse-charge purchases need an e-invoice?
From 1 January 2027, self-invoices for purchases from unregistered suppliers under reverse charge and for imports of services must be reported to the IRP, using the RCMDOM and RCMIMP supply types.
Can an e-invoice be cancelled?
Yes, on the IRP within 24 hours of generation and only in full. After that, issue a credit or debit note or amend the details in GSTR-1.
What happens if an invoice is not reported to the IRP?
It has no IRN and is not a valid tax invoice, so the buyer's input tax credit is at risk and penalties can apply to the supplier.
What happens to invoices left without action in IMS?
They are treated as accepted when GSTR-2B is generated on the 14th of the following month. Pending records stay out of that month's GSTR-2B and are carried forward.
Does e-invoicing work with SAP S/4HANA and ECC?
Yes. OptiE-Invoice reports invoices from SAP S/4HANA and SAP ECC billing and finance documents, and writes the IRN and QR code back to them.
Sources
This guide summarises the rules for general information and is not legal advice. Check the current notifications before acting on them.