This blog was last updated on February 27, 2024
The October deadline is fast approaching for the Indian CTC invoicing mandate, but it remains a moving target. In a swift move that was published just two months prior to go-live, authorities have now changed the scope of India’s e-invoicing system and who is affected by the reform, as well as updated the JSON format.
Why the change?
The framework for upcoming Indian e-invoicing reform has been ready since early 2020, however, some technical issues concerning the e-invoicing portal remain. After several changes, the latest e-invoicing technical (JSON) schema version 1.02 was published on 14 March 2020, yet it was still not operable. Indian officials have committed to this roll-out by the October deadline and are unwilling to change course. However, there have been changes in other aspects of the e-invoicing system.
What has changed in India’s e-invoicing system?
The Central Board of Indirect Taxes and Customs (CBIC) issued two new Notifications on 30 July 2020: One of the Notifications is related to the technical aspect of the reform, and the second is related to the taxpayer scope of the mandate.
Given the technical issues caused by schema problems, an update in the schema version was expected and a new version of the JSON schema has indeed now been published with the Notification No. 60/2020 – Central Tax. This is an interesting change, as previous schema versions were not officially published as part of a legal instrument, but made available on the GSTN platform. After this recent change, the new schema version is 1.1. Taxpayers will need some time to adopt this new version into their systems, however there is no deferral in the October deadline according to the Notifications.
Another change was introduced by the Notification No. 61/2020 – Central Tax in the taxpayer scope of the mandate. Previously, the mandatory scope targeted businesses with a threshold limit of 100 Crore rupees. The testing period enabled businesses with a threshold limit of 500 Crore rupees or more to start testing their systems as of January 2020. The same started from February 2020 for businesses with a threshold limit of at least 100 Crore rupees. After the recent changes, the threshold limit for October roll-out is 500 Crore rupees or more. As a result, businesses with a threshold limit of 500 Crore rupees or more (excluding insurers, banking companies and financial institutions, including a non-banking financial companies; goods transport agencies supplying services in relation to transportation of goods by road in a goods carriage, passenger transportation service suppliers, registered persons supplying services by way of admission to exhibition of cinematograph films in multiplex screens, SEZ units) are in the scope of the mandate that will be kicked-off as of October.
What should taxpayers do during this critical period?
The following two months will be critical for both the Indian government as well as Indian taxpayers. It may determine the success of the initial roll-out of the Indian e-invoicing reform. Since there is no delay in the October deadline, businesses in the scope must adopt the new schema in a timely manner. Considering that the scope will eventually cover all businesses, taxpayers must be prepared for the new deadlines that might be published in the upcoming days to cover smaller businesses. Especially, taxpayers that are removed from the scope, namely taxpayers with a threshold limit of above 100 Crore rupees but below 500 Crore rupees, should expect a new deadline for the uptake of e-invoicing very soon. However, recent communication on the API Sandbox portal (GST portal) indicates that the voluntary adoption of e-invoicing for businesses that fall outside of the mandate scope does not seem possible for the time being.
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