An e-invoicing compliance audit tests whether the company's aggregate turnover crosses the applicable threshold and, if so, whether every document required to carry an Invoice Reference Number, including invoices, credit notes and debit notes for business-to-business and export supplies, was actually reported to the Invoice Registration Portal and carries a valid IRN and QR code, by reconciling the sales register against the e-invoice reporting log rather than assuming compliance because the billing software has an e-invoicing module switched on; the exact threshold and document scope should be confirmed against the current GST notification.
Applicability threshold testing
- 01Recompute aggregate turnover across the relevant preceding financial yearsAggregate turnover for e-invoicing applicability is computed on a PAN basis across all GST registrations of the entity, not registration by registration; confirm the company's own computation covers every registration under the PAN.
- 02Confirm the threshold used reflects the current notified limitThe turnover threshold triggering mandatory e-invoicing has been progressively lowered over successive notifications; confirm applicability against the threshold in force for the period under audit, not a threshold from an earlier year.
Document scope and IRN generation testing
| Document type | In scope? | Common gap found |
|---|---|---|
| B2B tax invoice | Yes | Invoices raised from a branch billing system not integrated with the e-invoicing module |
| Export invoice | Yes | Export invoices treated as out-of-scope because no GST is charged, when IRN is still required |
| Credit note / debit note against a B2B invoice | Yes | Credit notes issued through a manual journal entry, bypassing the e-invoicing flow entirely |
| B2C invoice | Generally no, subject to the current notification | Confirm current scope rather than assuming exclusion applies |
| Delivery challan (no supply) | No | Sometimes incorrectly pushed through the e-invoicing flow, inflating the reconciliation population |
Reconciliation testing
- 01Reconcile the sales register against the e-invoice reporting logEvery in-scope invoice on the sales register should have a corresponding IRN; list every invoice without one and investigate whether it was missed entirely or reported with a delay.
- 02Check the time lag between invoice date and IRN generation dateA pattern of IRNs generated days after the invoice date suggests invoices are raised outside the integrated billing flow and reported later as a batch correction, which also risks breaching any time limit for IRN generation in force.
- 03Reconcile credit and debit notes separately from original invoicesCredit and debit notes are frequently handled through a different process than the original sale, and are the most common document type found missing an IRN in practice.
- 04Cross-check e-invoice data against GSTR-1 auto-populationConfirm that e-invoice data flowing into GSTR-1 was not manually overridden in a way that creates a mismatch between the IRN-carrying invoice and what is ultimately filed.
An e-invoice generated but subsequently cancelled on the portal must be cancelled within the permitted window; a cancellation attempted after that window leaves a live IRN against a transaction the company no longer intends to report, which complicates the sales register reconciliation if not tracked separately.
Regulatory requirement
The exact turnover threshold, the scope of documents required to carry an IRN, and the time limits for generation and cancellation are set out in the GST Act, rules and notifications as currently in force. Confirm all of these against current source material before concluding on compliance.
This is practical guidance written for audit teams, not an authoritative statement of any standard or statute. Standards, forms and timelines change. Check the current text issued by the ICAI and the relevant authority before relying on anything here in an audit file.
Related resources
- GST & GSTR-2BGSTR-3B vs GSTR-1 reconciliation for auditorsWhy GSTR-1 and GSTR-3B outward-supply figures disagree, the usual causes, and what to do with a difference still unreconciled at the year end.
- Purchase & AP auditDuplicate invoice detection during auditWhy exact matching finds almost nothing, the six match rules that do work, and how to tell a duplicate booking from a duplicate payment.
- Revenue, receivables & cut-offSales cut-off testing: dispatch, invoice and ledger datesWhy dispatch, invoice and ledger dates disagree at year end, how to sample either side of the cut-off, and the evidence that settles which date governs.
- Purchase & AP auditPurchase invoice vouching: a practical approachWhat to examine on a purchase invoice, in what order, the tickmarks worth using, and how to record the test so a reviewer can tell what was checked without asking.
Free tools, no signup
Each one reads a file entirely in your browser — or, for two of them, just answers a few questions — and nothing is ever uploaded.
- Purchase register checkDuplicate payments, round-sum amounts, weekend-dated invoices, incomplete records.
- Bank reconciliation checkerMatches your cash book against a bank statement — what's outstanding on each side.
- Fixed asset register checkDuplicate asset codes, missing location or useful life, negative net book value.
- Payroll red-flag scannerBank accounts shared across employees, and records missing an ID, PAN or salary.
- CARO applicability checkerAnswer a few questions about the company and see which CARO 2020 clauses likely apply.
- MSME payment delay checkerMSME-flagged invoices paid — or still unpaid — beyond the 45-day Section 22 limit.
- Related-party transaction screenerTransactions above a threshold you set with no approval reference, grouped by counterparty.
- Depreciation useful life checkerCompares a useful life in use against the Schedule II, Part C indicative figure.
- Materiality calculatorOverall and performance materiality against PBT, revenue, assets or equity, with reasoning shown.
- Sample size calculatorStatistical sample size for a test of controls or a substantive test of detail.