Integration of distributed energy resources (DER) has always posed a challenge. Smart inverters have started playing a crucial role in efficient integration of DERs. With the basic functionalities of traditional inverters in place, smart inverters can provide grids with related ancillary services either from the customer side or from the utility as well. The ancillary/augmented service from smart inverters includes the concept of reactive power exchange with the grid. Such grid support functions includes the functionalities of photovoltaic/plug in electric vehicles (PV/PEV) inverters as a static synchronous compensators (STATCOMs) by performing virtual detuning, temporary over voltage (TOV) mitigation, voltage regulation, frequency support and ride through capabilities. As the penetration levels of DERs have gone up, the need for such ancillary services has grown as well. This paper is organized in such a way that it will serve as a benchmark for smart inverter technologies in the form of a review. It includes several domains involving the applications, advanced and coordinated control, topologies and many more aspects that are associated with smart inverters based on reactive power compensation schemes for ancillary services. Apart from that, the applications those are associated with smart inverters in the smart grid domain are also highlighted in this paper.