If your business turnover exceeds Rs 5 crore in any financial year from 2017-18 onwards, you are required to generate e-invoices for all B2B supplies and exports. This requirement has been in effect since 1 August 2023, when the threshold was lowered from Rs 10 crore to Rs 5 crore under GST Notification No. 10/2023-Central Tax. WHAT IS AN E-INVOICE An e-invoice is not a new type of invoice. It is your regular GST invoice reported electronically to the Invoice Registration Portal (IRP). When you upload invoice details to the IRP, it validates the data and generates a unique Invoice Reference Number (IRN) along with a QR code. The IRN is what makes your invoice a valid e-invoice under GST law. The IRP also auto-populates your GSTR-1 return with the reported invoice data, reducing manual filing effort. ARE NBFCs EXEMPT FROM GST E-INVOICING?
Yes, NBFCs covered by Rule 54(2) are generally outside mandatory GST e-invoicing. Rule 48(4) is the provision under which the Government notifies which registered persons must generate e-invoices, and Notification No. 13/2020-Central Tax dated 21 March 2020, as amended, is the main notification issued under that rule. That notification excludes persons covered by Rule 54(2), and Rule 54(2) expressly includes banking companies and financial institutions, including non-banking financial companies (NBFCs).

Rule 54(2) is important not only for exemption logic, but also for invoice format. It allows an insurer, banking company or NBFC to issue a consolidated tax invoice, or another document in lieu of invoice, for services supplied during a month at the end of that month. Such document may be issued physically or electronically and need not be serially numbered or contain the recipient's address, so long as the other prescribed particulars are present.

There was practical confusion on whether this relief was limited only to certain supplies. CBIC addressed that in Circular No. 186/18/2022-GST dated 27 December 2022 and clarified that the exemption under Notification No. 13/2020 applies to the entity as a whole and is not restricted by the nature of the supply. In other words, an NBFC covered by Rule 54(2) does not become liable for mandatory e-invoicing merely because it makes B2B supplies or crosses the general turnover threshold that applies to other taxpayers.

The practical takeaway is that an NBFC should focus on issuing Rule 54-compliant documents rather than generating an IRN on the Invoice Registration Portal. At the same time, the document should carry a clear identification number and be reported correctly in GST returns, because the Rule 54 relaxation changes the document format and e-invoice requirement, not the need for proper GST documentation.

WHO IS EXEMPT Even if your turnover crosses Rs 5 crore, certain categories of taxpayers are exempt from e-invoicing: - Special Economic Zone (SEZ) units - Insurance companies - Banking companies and financial institutions (including NBFCs) - Goods Transport Agencies (GTAs) - Passenger transport service providers - Government departments and local authorities - Multiplex cinema admission suppliers - Input Service Distributors (ISDs) - OIDAR service providers registered under Rule 14 These exemptions are specified through various CBIC notifications issued under the CGST Act. CONSEQUENCES OF NON-COMPLIANCE 1. Invoice treated as invalid under Rule 48(5) of the CGST Rules. An invoice issued without a valid IRN shall not be treated as a valid invoice. 2. Your buyer s Input Tax Credit claim may be jeopardised if the invoice lacks a valid IRN, as tax authorities can deny the credit during assessment. 3. Penalty under Section 122 of the CGST Act for issuing incorrect invoices, along with potential liability for the tax amount involved. TIME LIMIT FOR GENERATION From 1 April 2025, businesses with aggregate annual turnover of Rs 10 crore and above must generate e-invoices within 30 days from the date of the invoice. After this window, the IRP will reject the upload. For businesses between Rs 5 crore and Rs 10 crore, there is currently no strict time limit, but generating invoices promptly is advisable. PRACTICAL TIP Integrate your billing software directly with the IRP through API connectivity. This ensures every B2B invoice automatically gets an IRN at the time of creation, eliminating the risk of missed compliance.