For Indian MSMEs, the digital landscape is shifting rapidly. The days of handwritten bills and delayed data entry are fading, replaced by a streamlined, transparent digital ecosystem. At the heart of this transformation is e-invoicing.
Initially rolled out for large corporations, the e-invoicing mandate has progressively widened its net. As we navigate 2026, compliance has become stricter, with new reporting windows and security protocols now fully in effect.
What is e-invoicing, and who does it apply to?
Contrary to popular belief, e-invoicing does not mean generating invoices on a government website. It simply means that your ERP software (like TallyPrime) sends your invoice data to the Invoice Registration Portal (IRP). The portal validates the data and returns it with a unique Invoice Reference Number (IRN) and a QR Code.
Current turnover limit (₹5 Crore)
As of January 2026, e-invoicing remains mandatory for all businesses with an Aggregate Annual Turnover (AATO) exceeding ₹5 Crore in any preceding financial year from 2017-18 onwards.
If your turnover crossed this threshold even once in the last few years, you must generate IRNs for all your B2B and export transactions. Ignoring this isn't an option; an invoice without a valid IRN and QR code is considered invalid under GST law, meaning your buyers cannot claim Input Tax Credit (ITC) on it.
The 30-day reporting rule (now active)
A critical rule that is now fully effective involves the time limit for reporting invoices.
For taxpayers with an AATO of ₹10 Crore and above, there is a strict 30-day reporting window.
The rule: You must report your invoice to the IRP within 30 days of the date of issuance.
The consequence: If an invoice is dated 1st January, the portal will reject any attempt to upload it after 30th January.
Mandatory two-factor authentication (2FA)
Another significant change that stabilised in 2025 is two-factor authentication. Logging into the e-invoice portal now requires a compulsory OTP (One Time Password) in addition to your username and password. This applies to all taxpayers to prevent the misuse of login credentials.
Transactions that require e-invoicing details
E-invoicing applies to specific B2B transactions. Distinguishing between what requires an upload and what does not is vital to avoid validation errors and maintain accurate Invoice templates.
Exempted transactions and sectors
You do not need to generate an e-invoice for:
B2C sales: Sales to end consumers (though a dynamic QR code may be required if turnover exceeds ₹500 Cr).
Exempted sectors: Banking, Insurance, NBFCs, Goods Transport Agencies (GTA), Passenger Transport Services, and Multiplexes are currently exempt.
Mastering compliance with TallyPrime
For an MSME owner, the fear is often that compliance will slow down billing. With TallyPrime, the reality is the opposite. We have integrated e-invoicing so deeply into the software that it feels like a natural part of your workflow.
"Connected" experience
In TallyPrime, you don't need to leave your voucher screen. When you save a sales invoice, TallyPrime instantly communicates with the IRP, generates the IRN and QR code, and prints them on your invoice, all in a matter of seconds.
Handling the 30-day rule
To help you comply with the active 30-day reporting timelines, TallyPrime provides a clear e-Invoicing Report. It specifically highlights pending invoices that are approaching the deadline, ensuring you never face rejection from the portal due to delay.
Seamless 2FA management
TallyPrime simplifies the 2FA requirement. You don't need to enter an OTP for every single invoice. Once authenticated, the session remains active for a substantial period (typically 6 hours), allowing you to generate bulk invoices without constant interruptions.
Final remarks
E-invoicing is more than a mandate; it is a mechanism to standardise your books and secure your buyer's trust. By ensuring your invoices carry a valid IRN, you protect your buyer's Input Tax Credit and speed up your own payment cycles.
Don't let the 30-day window catch you off guard. Audit your turnover, upgrade your systems, and make e-invoicing a seamless habit. It is not just about following the rules; it is about making the transition towards a future-ready business.
