E-Invoice Implementation Guide for SMEs

HCS

Reviewed by HCS Expert Team

Updated on 29 December 2024

E-Invoice Implementation for SMEs

E-Invoicing is now mandatory for businesses with turnover above ₹5 Cr. This guide helps you understand and implement E-Invoice in your business smoothly.

Current E-Invoice Thresholds

Phase	Turnover Limit	Effective From
Phase 1	> ₹500 Cr	Oct 2020
Phase 2	> ₹100 Cr	Jan 2021
Phase 3	> ₹50 Cr	Apr 2021
Phase 4	> ₹20 Cr	Apr 2022
Phase 5	> ₹10 Cr	Oct 2022
Phase 6	> ₹5 Cr	Aug 2023
Expected	> ₹1 Cr	2025 (proposed)

What is E-Invoice?

E-Invoice is NOT about creating invoices online. It's about registering your invoice with the government and obtaining an IRN (Invoice Reference Number).

The Process:

1. Generate invoice in your billing software

2. Upload to Invoice Registration Portal (IRP)

3. Get IRN + Signed QR Code

4. Print invoice with QR Code

5. E-Way Bill auto-generated (optional)

When is E-Invoice Required?

Transaction Type	E-Invoice?
B2B (Registered to Registered)	Yes
B2C (Business to Consumer)	No
Export Invoices	Yes
SEZ Sales	Yes
Credit/Debit Notes	Yes
Composition Dealers	No

Implementing E-Invoice in Tally

Step 1: Enable E-Invoice in Tally

Gateway > F11 > Statutory & Taxation
Enable GST > Set E-Invoice: Yes
Enter API credentials

Step 2: Get API Credentials

Register on einvoice1.gst.gov.in
Create API user
Note Client ID and Client Secret

Step 3: Configure Tally

Enter IRP details in Tally
Map HSN codes correctly
Verify GSTIN of parties

Step 4: Generate E-Invoice

Create Sales Invoice normally
Use Export > E-Invoice > Generate
IRN appears on voucher

Common Issues & Solutions

Issue	Cause	Solution
Invalid GSTIN	Wrong party GSTIN	Verify on GST portal
HSN not found	Wrong HSN code	Use correct 4/6/8 digit HSN
Duplicate IRN	Invoice already registered	Check invoice number
Network error	IRP down	Retry after some time
Schema error	Missing mandatory fields	Fill all required fields

Time Limits

Action	Time Limit
Generate E-Invoice	Within 24 hours of invoice
Cancel E-Invoice	Within 24 hours of IRN
Amend E-Invoice	Not allowed (cancel & re-issue)

Penalties for Non-Compliance

Violation	Penalty
B2B invoice without E-Invoice	100% of tax or ₹10,000 (higher)
Wrong E-Invoice details	Rejection of ITC by buyer

E-Invoice & E-Way Bill Integration

Good news: If you generate E-Invoice, E-Way Bill Part A is auto-filled. You only need to update:

Vehicle number
Mode of transport
Transporter ID (optional)

HCS E-Invoice Services

1. Setup: Complete Tally configuration for E-Invoice

2. Training: Staff training on E-Invoice generation

3. API Integration: For high-volume businesses

4. Troubleshooting: Resolve E-Invoice errors

5. Compliance Check: Monthly audit of E-Invoice status

Get E-Invoice ready with HCS today!

Frequently Asked Questions

What happens if I don't generate E-Invoice?

Your invoice is invalid for GST purposes. Your buyer cannot claim ITC, and you may face penalties up to 100% of tax amount.

Can I cancel an E-Invoice?

Yes, within 24 hours of IRN generation. After that, you must issue a credit note (which also needs E-Invoice).

Is E-Invoice required for B2C?

No, E-Invoice is only for B2B, Export, and SEZ supplies. Retail sales to consumers don't require E-Invoice.

Does Tally generate E-Invoice automatically?

TallyPrime can generate E-Invoice directly if configured. HCS provides setup and training services.