Penalties and Consequences of Non-generation of e-Invoices

Amit Chauhan


Failure to generate e-invoices may result in penalties, burdening the business’s cash flow. As per the recent update, taxpayers whose turnover exceeds Rs.5 crore must generate e-invoices. The Invoice Registration Portal (IRP) will generate an Invoice Reference Number (IRN) and Quick Response (QR) code along with a digitally signed e-invoice. In case of non-generation of an e-invoice, taxpayers will be at fault, leading to penalties. This article will explore the possible consequences and penalties of non-generations of e-invoices.

What if an e-invoice is Not Issued?

Taxpayers who meet the aggregate turnover limit are subject to generating e-invoices, meaning all other taxpayers must follow standard tax invoice requirements. Invoices must be reported to the common IRP to ensure that the government is informed of all B2B, B2G, and export supply transactions. A unique invoice reference number (IRN) will then be generated for each uploaded invoice.

Failure to generate e-invoices means not reporting supply transactions to the authorities. A GST-regulated taxpayer’s invoice without the IRN is considered null and void. In other words, it is regarded as a non-issue of the invoice under Rule 48 of the CGST Rules, sub-rule (5). As stated in the following section, there is a penalty for not generating an electronic invoice.

Penalty for Non-generation of an e-Invoice

An invoice is not considered a valid tax invoice for any GST-related matters if it is not registered on the IRP. As per GST laws, an e-invoice penalty is associated with failing to issue an e-invoice incorrectly. Penalties that apply in this case are:

– For each incident of non-compliance, there will be a penalty of 100% of the tax owed or Rs.10,000, whichever is larger, for failing to issue an invoice.
– The penalty for an inaccurate e-invoice will be Rs.25,000.
– The department may hold the products and the vehicle if transported without a valid e-invoice. 

The generation of the e-way bill (EWB) requires a valid IRN. An invalid IRN could impose additional fines (about e-way bill).

What are the Consequences of Non-Compliance with e-Invoicing

Apart from the fine for a non-compliant e-invoice, the following are the consequences of failing to generate an IRN- 

– Movement of goods worth more than Rs.50,000 outside the state requires a valid e-way bill and an e-invoice. Without a valid e-invoice or an e-way bill, goods in transit may be held. Such transportation results in the products and vehicle detention drawing the standard penalty for the e-way bill since an invoice without an IRN and a signed QR code is invalid wherever applicable.
– GST-registered buyers risk having their invoice payments and Input Tax Credit (ITC) claims delayed or refused. A tax invoice is significant evidence to claim ITC under the GST rules. A registered taxpayer cannot claim an ITC if he does not have a valid tax invoice or debit note, and an ITC must appear as an eligible one in GSTR-2B, according to Section 16 of the CGST Act of 2017.
– Information from an invoice must have an IRN to be automatically entered into the supplier’s GSTR-1 and may never appear in the buyer’s GSTR-2A and GSTR-2B tax returns. Where the supplier does not submit the tax to the government, the buyer is not eligible for an ITC.
– e-Way bills and e-invoices can be generated automatically, but failure to generate e-invoices affects e-way bills, leading to delivery delays and other logistic issues. 
Any error in e-invoice and e-way bills cannot be corrected. For this, you must cancel and issue a fresh invoice against which the IRN can be generated within 24 hours. However, credit and debit notes must be issued if the error is not reported within 24 hours.

Violations of the norms and regulations of the e-invoicing system may result in hefty penalties.  Therefore, businesses must ensure that e-invoices are generated without fail, as per the regulations and within the specified time period.

About Amit Chauhan

Amit is another maestro behind the heartwarming vibes on He is a professor and loves writing in free time. He brings a dash of joy to your day with quotes, wishes, and Insta-perfect captions.

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