The rollout of GST 2.0 in 2025 is transforming compliance for small and medium enterprises (SMEs). One of the major reforms is the mandatory e-invoicing system, which simplifies invoice reporting, reduces errors, and increases transparency. Here’s a complete guide on how GST 2.0 is impacting SMEs with e-invoicing.

What is E-Invoicing?

E-invoicing is the process of generating invoices in a digital format approved by the GST system. Under GST 2.0, all invoices are reported to the Invoice Registration Portal (IRP), which validates and returns a unique Invoice Reference Number (IRN).

Why E-Invoicing is Mandatory for SMEs

• Automates invoice generation and reporting
• Reduces errors and mismatches in GST filings
• Ensures faster processing of Input Tax Credit (ITC)
• Promotes transparency and compliance across businesses

Step-by-Step E-Invoicing Process for SMEs

• Generate a GST-compliant invoice using accounting software
• Submit the invoice to the Invoice Registration Portal (IRP)
• Receive a unique Invoice Reference Number (IRN) and QR code
• Share the IRN and e-invoice with the buyer
• Use e-invoice details to file GST returns seamlessly

Threshold for Mandatory E-Invoicing

Under GST 2.0, the following turnover thresholds apply for mandatory e-invoicing for SMEs:

Benefits of E-Invoicing for SMEs

• Faster GST return filing and ITC claims
• Reduction in errors and mismatches
• Enhanced transparency and audit trail
• Integration with accounting and ERP systems

Conclusion

GST 2.0 is driving digital compliance, and mandatory e-invoicing is a key step for SMEs in 2025. By adopting e-invoicing, small businesses can save time, reduce errors, and ensure seamless GST compliance while benefiting from automation and faster ITC processing.