Last week, the Indian GST Council convened for its 35th session, this time chaired by the recently appointed finance minister, Nirmala Sitharaman. As expected, the topic of a nationwide mandatory B2B e-invoicing system was on the agenda, and the GST council confirmed two important principles:
Scope: The e-invoicing system will cover only B2B transactions to begin with.
Effective date: E-invoicing will become mandatory in stages; the first phase will begin on 1 January 2020 on a voluntary basis. It is yet unknown if there are any incentives tied to the first optional stage or when the subsequent stages will take effect.
Genuine political will behind e-invoicing
While both clarifications are welcome and important, there is nothing to say that they cannot be amended as the e-invoicing project and the related framework mature. If anything, the most interesting takeaway is that the GST Council is repeatedly confirming the ambition to implement a mandatory e-invoicing system in line with the directives that were provided to the exploratory committee on the matter back in April. This tells us that there is genuine political will behind this initiative and that regulation is likely to appear in the near future.
The Indian government is set to present next year’s budget in July, and if it follows the Italian example, we might be able to expect the legal framework on mandatory B2B e-invoicing to be published in conjunction with the state budget law.