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Benefits of e-Invoicing for MSMEs

Seep Gupta
Seep Gupta at March 26, 2023

E-Invoicing Benefits 

Benefits of e-Invoicing for MSMEs: E-Invoicing for small businesses which fall under the definition of MSME (Micro, Small and Medium Enterprises (MSMEs) in India has made it easier for small businesses to excel in the tech-based regulations and has also reduced the tedious manual work. They have made businesses easier and seamless.

In the 37th GST Council meeting which was held in October 2022, e-invoice login and e-invoice applicability have been made mandatory for all MSME businesses. As per the notification, organisations are mandatorily required to adopt this framework from the 1st of October 2020.

E-invoice for small businesses is required if the enterprises or organisations have an annual turnover of INR 20 crores to 50 crores in any previous fiscal year from 2017-2018 to 2021-22. These guidelines are as per the CGST (Central Goods and Services Tax) notification 01/2022 dated February 24, 2022. E-invoicing offers several benefits because it is super easy to generate without any complications.

Businesses which do not Require to Generate E-invoices

E-invoicing for services having an annual turnover of at least 100 crores is required to generate and authenticate e-invoices via the GSTN portal. Given below is the list of businesses and organisations that are exempted from submitting e-invoices.

  • Financial institutions such as banks and insurance companies.
  • Special Economic Zones
  • Goods Transportation Agencies
  • Free Trade and Warehousing Zones
  • Supplier of Cinematograph Films in Multiplexes

E-Invoicing for Special Economic Zones

What are Special Economic Zones?

Special Economic Zones also known as SEZs are geographical regions or areas that are present in a country and provide businesses with simple tax regulations and compliances. Special Economic Zones or SEZs are considered as part of foreign territories and hence they attract zero per cent of GST.

E-Invoicing for SEZ or Special Economic Zones Units

According to the CGST notification dated 30th of July 2020, Special Economic Zones, SEZs are exempted from submission of e-invoices for their outward supplies. However, it is important to note that e-invoice is required for special economic zone developers if they have specified turnover and they fulfil other conditions mentioned in the e-invoicing mandate.

If a person’s GSTN falls under the e-invoicing mandate, then submission of e-invoices is mandatory for him even for SEZs or Special Economic Zones.


Benefits of E-Invoicing in Reference to MSME

E-invoicing offers smart and high-tech solutions to MSMEs and they also help MSME businesses or organisations to reduce fraudulent invoicing activities and also limit tax evasion to a great extent. Given below are several benefits of e-invoicing for MSMEs (Micro, Small and Medium Enterprises).

  • E-invoicing helps in the fast and seamless smooth generation of E-way bills via e-way bill login. It is because the e-invoices which are uploaded to the GST portal, are ultimately pushed to the GSTN network which stands for Goods and Services Tax Network.
  • E-invoices which are uploaded on the GST login portal are pushed toward the GSTN network. This facilitates the smooth and convenient transfer of thousands of e-invoices among the customers in a nick of time.
  • Invoices themselves get auto-populated in the GST returns and hence this reduces the need for manual work and data entry while filing GST returns.
  • With the help of technology and e-invoicing mechanism, MSMEs now can monitor and track their e-invoices in real-time to see their tracking status.
  • E-invoices has made the availing of business loan easier for MSMEs. Based on their e-invoices now MSME can easily avail of loans and funds without getting into too many complications.


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