Five crore rupees of aggregate turnover is the line. Cross it and e invoice for contractors stops being someone else’s problem: every tax invoice you raise has to be reported to the invoice registration portal first, and the reference number it returns is what your client’s accounts team looks for before passing your bill. The threshold came down in stages between October 2020 and August 2023, each one notified separately, which is why so many firms are working from a number that expired two revisions ago.

The threshold fell five times, and nobody sent you a letter

E-invoicing did not arrive as one rule. It arrived as a series of central tax notifications, each pulling the turnover floor down, and each applying from a date that had nothing to do with your financial year. The National Informatics Centre publishes the list on the e-invoice system notifications page, and reading it in order explains a lot about why the answer you got in 2022 is wrong today.

Notification Issued What it did Applies from
No. 13/2020 – Central Tax, as amended by No. 61/2020 and No. 70/2020 21 Mar 2020 E-invoicing for aggregate turnover exceeding Rs. 500 Cr in any preceding financial year from 2017-18 1 Oct 2020
No. 88/2020 – Central Tax 10 Nov 2020 E-invoicing for aggregate turnover exceeding Rs. 100 Cr 1 Jan 2021
No. 05/2021 – Central Tax 8 Mar 2021 Aggregate turnover exceeding Rs. 50 Cr 1 Apr 2021
No. 01/2022 – Central Tax 24 Feb 2022 Aggregate turnover exceeding Rs. 20 Cr 1 Apr 2022
No. 17/2022 – Central Tax 1 Aug 2022 Aggregate turnover exceeding Rs. 10 Cr 1 Oct 2022
No. 10/2023 – Central Tax 10 May 2023 Aggregate turnover between Rs. 5 Cr and Rs. 10 Cr 1 Aug 2023

Two of those rows are hard to find on the portal. Its notification list records the 500 crore start only as amendments to Notification No. 13/2020, and it has no entry at all for Notification No. 05/2021 – Central Tax, the step that took the line from 100 crore to 50 crore. For a contractor or a machine-hire firm the only line that matters is the last one: since August 2023 the floor has been five crore.

Notice what the descriptions are written against. Every one of them says aggregate turnover. None of them says contract value, invoice value, or project size.

Aggregate turnover is not your biggest contract

This is where owners get it wrong, and the mistake runs in both directions.

One firm assumes it is outside the net because no single job it has ever billed came close to five crore. Another assumes it is inside because it once quoted on a nine-crore tender. Neither number is the test. The test is what the business turned over, and for a contractor that figure is the sum of a lot of unremarkable bills.

Run the arithmetic on a mid-size hire fleet and the point makes itself. Six machines on long-term hire at a little over seven lakh a month, billed across a full year, is already past the line. Add spares resale, a couple of small works contracts and an operator-supply arrangement, and a firm that thinks of itself as small is comfortably inside. The GST registration limit for contractors works through how these separate revenue streams stack up for registration purposes, and the stacking logic is the part worth borrowing here.

Which financial year counts is settled in the parent notification. Since Notification No. 70/2020 amended it, Notification No. 13/2020 covers a registered person whose aggregate turnover “in any preceding financial year from 2017-18 onwards” exceeds the threshold. A firm that crossed five crore in any year since 2017-18 is therefore inside from the start of the following financial year, even if its turnover has since fallen back. How your own revenue streams add up to aggregate turnover is the question to put to your accountant in writing. What is not in doubt is the shape of the test: it is a turnover test.

Who the rule leaves out

There is one exclusion on the record that contractors misread constantly.

Notification No. 23/2021 – Central Tax, dated 1 June 2021, amended Notification No. 13/2020 – Central Tax to exclude government departments and local authorities from the requirement of issuing an e-invoice. Read it carefully. It excludes them from issuing. A PWD division or a municipal corporation does not have to raise an e-invoice.

That says nothing about you. When you bill a government division for works or for machine hire, you are the supplier, and your own turnover decides whether your document has to be reported. A great many contractors have concluded that government work is somehow outside the system because the department at the other end never issues one. It is the opposite of a shelter.

The notification leaves out a few other suppliers by name: a Special Economic Zone unit, and the suppliers covered by sub-rules (2), (3), (4) and (4A) of Rule 54 of the CGST Rules, which are an insurer, a banking company or a financial institution including a non-banking financial company, a goods transport agency carrying goods by road in a goods carriage, a supplier of passenger transportation service, and a cinema selling admission to multiplex screens. Machine hire and works contracts are none of those, so the exclusions do not reach the bills a contractor raises for them.

E invoice for contractors: what changes on the bill

An e-invoice is not a new kind of document. It is your invoice, reported to the invoice registration portal, which returns a reference number and a signed QR code that then appear on the copy your client receives.

Your rate does not change. Your description of work does not change. The place of supply, the treatment of material and labour, the split you argue about on every works contract — all of it survives untouched. If you want the substance of those questions, GST on works contract and GST on labour supply deal with the rate and classification side, which is where the real money usually is.

What changes is sequencing. The document has to go through the portal before it is complete, which means your billing clerk can no longer raise a bill at eleven at night on the last day of the month and fix the details later. On a site running a monthly running-account cycle, that is a genuine operational change, and it is the one people underestimate.

The 30-day reporting window above ten crore

Sequencing now has a deadline too. Under a GSTN advisory dated 27 March 2025, from 1 April 2025 a taxpayer with an annual aggregate turnover of 10 crore rupees or more cannot report an e-invoice on the invoice registration portal once it is more than 30 days old: the advisory’s own example is an invoice dated 1 April 2025 that could not be reported after 30 April 2025. The block covers invoices, credit notes and debit notes, and the advisory says there is no such restriction below 10 crore as of now. A running-account bill held back for a month while the measurement is argued over can miss the window outright.

The portal has also stopped relying on its own record of your size. An NIC advisory of 11 August 2025 says the aggregate turnover shown on the e-invoice portals is aligned with the figure computed in the GST system from 1 September 2025, and a mismatch is raised as a ticket on the GST grievance portal.

Why your client’s accounts team will chase this before you do

Here is the practical reason to care, and it has nothing to do with penalties.

Your client claims input credit on your bill. Their accounts team is measured on whether that credit survives. When a document is expected to carry a reference number and does not, the safe thing for them to do is hold it, and holding it costs you a payment cycle. The same instinct is what makes clients fussy about the paperwork covered in GST input credit on construction equipment and about the movement documents in e-way bill for machinery, where a missing or wrong document turns into an e-way bill penalty.

A contractor’s working capital lives or dies on the running-account cycle. Anything that gives a client a defensible reason to hold a bill for thirty days is a financing cost, and it is a financing cost you pay without ever seeing an entry for it.

Are you inside the e-invoice turnover line?

If your aggregate turnover is above five crore, assume you are in and get it confirmed. If you are somewhere between four and six crore, that is the worst place to be guessing, because a year that closes above five crore brings you in from the next 1 April, and the first person to notice will be a client’s accounts clerk holding your bill.

The fix is not complicated. Ask your accountant for a written answer on whether any year since 2017-18 crossed the line, and ask before the next billing cycle rather than after one gets stuck. Working capital that is trapped in held bills is the most expensive money a contractor uses, which is exactly why it is worth comparing what equipment finance and working capital options actually cost against the cost of a payment cycle lost to paperwork.

Rates, schemes, thresholds and notification positions change — confirm current terms with your tax adviser or the official GST portal before deciding. Prices, specifications and features are indicative, vary by variant, location and date, and should always be confirmed with the official OEM or authorised dealer before any purchase decision. DesiMachines is not liable for decisions taken on the basis of information that may have changed after publication.