India: Last-Minute Changes to the Proposed E-Invoicing System

Selin Adler Ring
July 31, 2020

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 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?

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, it could be an advantage to become an early adopter, even if the threshold limit does not cover your business now. All in all, the risk of becoming liable for unexpected GST charges is particularly great, if you do not choose the path of proactive compliance.

Take Action

 

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Selin Adler Ring

Selin is Regulatory Counsel at Sovos. Based in Stockholm and originally from Turkey, Selin’s background is in corporate and commercial law, and currently specializes in global e-invoicing compliance. Selin earned a Law degree in her home country and has a master’s degree in Law and Economics.
Share This Post

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

E-Invoicing Compliance EMEA
August 12, 2020
Portugal: Details on the QR Code and UUID Expected

In February last year, the Portuguese government published the Law Decree 28/2019 rolling out changes affecting e-invoices. The goal of the Law Decree is to simplify and consolidate pieces of law that are scattered around the Portuguese legal framework. However, the effectiveness of many of those rules is still dependent on further regulation, such as […]

ShipCompliant
August 11, 2020
10 Steps to Expand Your Winery

Looking to enter a new market or bring new wines to the marketplace? Growing any business can be complicated, and the beverage alcohol industry is no exception. Not knowing how or where to begin can be the biggest hurdle. From market research and branding to strategic considerations and compliance, this 10-step guide will get you […]

ShipCompliant
August 10, 2020
Ask Alex: Your Bev Alc Compliance Questions Answered (August 2020)

Do you have questions about the rules, regulations, and compliance requirements of the beverage alcohol industry? This series, Ask Alex, is a perfect opportunity to get those pressing questions answered straight from one of the industry’s regulation and market experts, Alex Koral, Senior Regulation Counsel, Sovos ShipCompliant.  To take advantage of this opportunity and get […]

Tax Compliance
August 7, 2020
GAO Urges IRS to Overhaul 1099 Reporting for the Gig

A couple of weeks ago, the Government Accountability Office (GAO) released a report to the Senate Finance Committee describing the issues the IRS faces in enforcing income tax compliance for gig economy workers. The report highlighted long-standing issues the government has been grappling with in receiving tax information necessary to enforce compliance along with specific […]

EMEA VAT & Fiscal Reporting
August 4, 2020
New VAT Rules for Online Marketplaces and Imports of Goods into the UK

The United Kingdom’s HMRC has issued new guidance on the VAT treatment of cross-border sales of goods and online marketplaces beginning 1 January 2021, following the end of the transition period. Cross-Border Sales under £135 New rules will apply when a business sells goods for £135 or less to a UK customer and the goods […]