📌 Introduction
In a bid to improve tax compliance and transparency, the Indian government has been expanding the scope of e-invoicing under GST. Initially rolled out for large enterprises, e-invoicing is now becoming mandatory for more categories, including small and medium enterprises (SMEs).
Whether you’re a small manufacturer, service provider, or trader, it’s crucial to understand what e-invoicing means, how it works, and how to comply without disrupting your business.
This blog is your step-by-step SME-friendly guide to e-invoicing under GST in 2025.
✅ What is E-Invoicing Under GST?
E-Invoicing refers to the electronic authentication of B2B invoices on the Invoice Registration Portal (IRP) governed by the Goods and Services Tax Network (GSTN).
Once the invoice is uploaded, the portal generates a unique Invoice Reference Number (IRN) along with a QR code, which is mandatory to make the invoice valid under GST.
📢 Note: E-invoicing is not about creating invoices on the GST portal. You still create invoices using your software—just report them electronically to the IRP.
📊 Applicability of E-Invoicing for SMEs (As of April 2025)
E-Invoicing is mandatory for businesses with aggregate turnover exceeding ₹5 crores in any financial year from 2017-18 onwards.
| Turnover Threshold | E-Invoicing Applicable? | Effective Date |
|---|---|---|
| Above ₹500 crore | ✅ Yes | 1 Oct 2020 |
| Above ₹100 crore | ✅ Yes | 1 Jan 2021 |
| Above ₹50 crore | ✅ Yes | 1 Apr 2021 |
| Above ₹10 crore | ✅ Yes | 1 Oct 2022 |
| Above ₹5 crore | ✅ Yes | 1 Aug 2023 |
| Below ₹5 crore | ❌ Not Yet | N/A |
💡 Even if your turnover drops below ₹5 crore in FY 2024-25, if you crossed it in any past year, e-invoicing still applies.
🧾 Who Needs to Generate E-Invoices?
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B2B Suppliers (Goods or Services)
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Exporters
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SEZ Units (in some cases)
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SMEs providing services to registered clients
🚫 E-invoicing is not applicable to:
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B2C transactions
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Banks, NBFCs, Insurance Companies
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Transporters (Goods Transport Agency)
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Input Service Distributors
🛠️ How Does the E-Invoicing System Work?
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Invoice Creation: You generate the invoice from your own accounting/billing software.
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IRP Upload: The invoice is sent (via API or manually) to the Invoice Registration Portal.
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IRN Generation: IRP validates and generates a unique IRN and QR Code.
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GST Portal Sync: The data is automatically pushed to GSTR-1 and e-way bill system.
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Final Invoice: You print/send the invoice with IRN and QR code.
📋 Benefits of E-Invoicing for SMEs
| Benefit | Description |
|---|---|
| ✅ Auto-population in GSTR-1 | Saves time and reduces data entry errors |
| ✅ Faster Input Tax Credit | Buyers get timely credit, improving trust & transactions |
| ✅ Reduced Tax Evasion | Transparency in reporting invoices |
| ✅ Integration with e-Way Bill | Simplifies compliance process |
| ✅ Real-time Invoice Reporting | Enhances control over operations and reconciliations |
🖥️ Step-by-Step Guide for SMEs to Start E-Invoicing
1. Check Applicability
Confirm whether your turnover exceeded ₹5 crore in any financial year from 2017-18 onwards.
2. Get Registered on the E-Invoice Portal
Visit https://einvoice.gst.gov.in and log in using your GST credentials.
3. Select Invoice Generation Method
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API integration via ERP
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GST Suvidha Providers (GSPs)
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Free offline tools offered by GSTN
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Manual bulk upload using Excel
4. Generate & Upload Invoices
Ensure your invoice includes mandatory fields:
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Supplier GSTIN
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Buyer GSTIN
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Invoice Number & Date
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Item Details & Tax Breakup
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HSN/SAC Code
5. Download Final Invoice with IRN
After validation, download or print the invoice with QR code and IRN.
🧮 Important Fields Required in an E-Invoice
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Invoice Number
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Invoice Date
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GSTIN of Supplier & Recipient
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HSN/SAC Codes
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Taxable Value & Tax Amounts
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IRN & QR Code (after validation)
📆 E-Invoicing and GSTR-1 Filing Sync
Once an e-invoice is generated:
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It automatically reflects in GSTR-1.
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Reduces mismatch errors in monthly GST returns.
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Helps with faster reconciliation of Input Tax Credit (ITC).
❌ Common Mistakes SMEs Must Avoid
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Using duplicate invoice numbers
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Uploading incomplete invoice details
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Delayed reporting on the portal
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Not integrating with billing software
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Ignoring QR code & IRN on final invoices
🧾 Penalties for Non-Compliance
| Offence | Penalty |
|---|---|
| Not generating an e-invoice | ₹10,000 per invoice (min) |
| Incorrect invoice without IRN/QR | ₹25,000 per invoice |
🏢 How Verotus Finlegal Solutions LLP Can Help
At Verotus Finlegal Solutions LLP, we help SMEs:
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Get started with e-invoicing systems
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Automate GST compliance with accounting tools
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Reconcile ITC with GSTR-2B and 3B
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Stay updated with latest GST notifications
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Handle e-way bill + e-invoice integration seamlessly
📞 Contact us for end-to-end GST & e-invoicing support.
✍️ Conclusion
E-invoicing may seem like a technical challenge, but it's an opportunity for SMEs to modernize their operations, improve compliance, and gain business credibility. With the right setup, guidance, and integration, your business can stay ahead in the evolving GST ecosystem.
Let compliance drive your growth, not fear!
💡 Need help implementing e-invoicing for your business?
Contact Verotus Finlegal Solutions LLP today and let our experts simplify your compliance journey.
🌐 www.verotusllp.com
📧 verotusllp@gmail.com
📍 Kolhapur, Maharashtra
