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e invoicing

e-Invoicing has now been familiar to all the businesses as the majority of the businesses are now falling under the ambit of e-invoicing under GST.

w.e.f. 1st of April, 2021, all the businesses whose aggregate turnover falls above INR 50 Cr. annually, are eligible for e-Invoicing now.

The plans of the Government seem to be going in the ways to bring maximum businesses under e-Invoicing & we should not be surprised if the government announces to bring the 50 Cr. eligibility down to 5-10 Cr.

A voluminous increase in the e-Invoicing eligible taxpayers has made this a trending topic.

In this short article, we will see the direct and indirect impacts of e-Invoicing on Small & Medium enterprises.

e-Invoicing under GST & Indian Markets

e invoicing under gst
It’s been quite a while since the introduction of e-Invoicing in India & it has been very well received by the taxpayers.

e-Invoicing has paved the way for a super fast & high-level integration between the ERP software used by the taxpayers and the Invoice Registration Portal (IRP).

Integration of e-Invoicing with the IRP platform, e-Way Bill portal, and GSTN has helped to automate invoicing process thus adding up a pace to the business flow.

e-Invoicing is going to impact a large group of businesses as the businesses are still not completely familiar with the rules of e-Invoicing.

Even though e-Invoicing under GST  is seen as a step to curb ill practices like tax evasion, there are still many businesses that aren’t ready for this change.

How is e-Invoicing under GST affecting Mid-market Companies?

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GST e-Invoicing has compelled small and medium businesses to get a robust IT infrastructure in place for their invoicing needs.

There are some costs & other aspects involved which the medium & small businesses are keen about.

We have listed down some of the major impact points where e-Invoicing under GST can hit the Small & Medium Market Companies in India.

1. IT Infrastructure availability for e-Invoicing

  • e-Invoicing is the digital handshake between the taxpayer and the government portal such as IRP, e-Way Bill portal, and the GSTN.
  • Robust & up-to-date software is necessary for the successful integration of these two entities & this comes at a price.
  • Small & Medium market companies are very cautious about the spending of their funds & that too on software whose tasks could be done manually as well!
  • Error-free & timely generation of the e-Invoices requires the IT infrastructure to be kept up-to-date.
  • Many mid-market companies do not prioritize setting robust & up-to-date software for their e-Invoicing processes.
  • This approach of the Medium & Small companies should be changed towards using automated software for streamlining their e-Invoice process.

2. Relaxed Approach of the Taxpayers for e-Invoicing

  • Before e-Invoicing was introduced, the taxpayers were used to reposting the transactions to the government by the end of the month.
  • This use to allow the taxpayers a relaxed time frame between the transactions and the reporting of the same to the government.
  • With the introduction of e-Invoicing under GST ambit, the taxpayers are now compelled to do real-time reporting of all their transactions to the government.
  • Delay in this reporting of the transactions can be a challenge before the small & medium scaled businesses due to the voluminous number of invoices generated every month.
  • Many mid-market companies are reluctant about using the automated e-Invoicing facility right from their ERPs.
  • Due to the lack of appropriate automated tools in place and the time-bounded e-invoice generation, mid-market companies are facing challenges to adjust to this facility.

What Is the Way Out For Mid-market Companies  for e-Invoicing?

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e-Invoicing System is for the benefit of the taxpayer.

e-Invoicing will now be mandatory for businesses whose aggregate turnover falls above INR 50 Cr.

More & more businesses are now falling under the umbrella of e-invoicing and hence, one cannot deny the importance of e-Invoicing in the GST structure.

Mid-market companies who are eligible for e-Invoice generation, at no cost can ignore this process as it is an important step of authenticating all your invoices from the government’s end.

Following is a checklist for small & mid-market companies to accommodate themselves comfortably to the e-invoice generation under GST:

Adapt to the changing reporting requirements as per the GST compliances.

Making a robust and automated IT infrastructure available for the e-Invoice generation

Using the ERP connectors can make your e-Invoicing process faster and more accurate as compared to the manual uploading of your invoices to the Invoice Registration Portal (IRP).

Taking help of automated software to stay 100 % compliant with the ever-changing GST laws

The time and efforts these businesses need to invest in this project will significantly increase.

Businesses should be ready with the budget for the same and be compliant with all the GST laws and rules for e-Invoicing.

In a Nutshell

e-Invoicing can be a challenging task when there are loads of invoices to be uploaded to the IRP portal.

This could be a time-consuming task and there are high chances of human errors which in turn can hamper your availability of Input Tax Credit.

Generation of incorrect e-Invoices can further attract blocking of your working capital which will hurt your business.

Hence, setting up an automated IT infrastructure should be the primary priority of the businesses to be e-Invoice ready.

You can get a free demo of the GSTHero’s Tally Connector which will enable you to generate e-Invoices directly from your Tally ERP without even visiting the IRP portal once.

Salient Features of GSTHero’s e-Invoicing Solutions:

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  • 1-click e-Invoice generation right from your ERP.
  • GSTHero is a Government-appointed GST Suvidha Provider & hence it is 100% compliant with the GST laws.
  • ISO 27001:2013 protection ensures that your data is in safe hands.
  • Round-the-clock support from our experts and support team.

Integrate your ERP with GSTHero today!

Until the next time...


Gaurav Yadav

About the author

Gaurav is an Engineer by training with a deep interest in Economics & Finance. He has been associated with the Fin-Tech industry for quite some time now. He writes for GSTHero for topics including GST Compliance, GST Structure, etc & aims to break down complicated technical jargon into simple terms for the taxpayers. His expertise includes GST Laws, Corporate Finance & Macro-Economics.

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