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, 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.

Take Action

To keep up to date with the changing VAT compliance landscape, download Trends: Continuous Global VAT Compliance and follow us on LinkedIn and Twitter to stay ahead of regulatory news and other updates.

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. She speaks Russian, Arabic, English and Turkish.
Share This Post
Share on facebook
Share on twitter
Share on linkedin
Share on email

North America ShipCompliant
June 18, 2021
How to Streamline Your Wine Shipping With UPS and FedEx

Wineries that use FedEx or UPS to print shipping labels for beverage alcohol packages can integrate with ShipCompliant to streamline the fulfillment process. This means: No more typing addresses to print labels One click can pull all shipment information from ShipCompliant into FedEx or UPS –  your labels are ready to print Tracking numbers sync […]

EMEA Tax Compliance VAT & Fiscal Reporting
June 17, 2021
Poland VAT Reporting: Draft Amendments to JPK_V7M/V7K Published

In Poland, the Ministry of Finance proposed several changes to the country’s mandatory JPK_V7M/V7K reports. These will take effect on 1 July 2021. The amendments offer administrative relief to taxpayers in some areas but create potential new hurdles elsewhere. Poland JPK_V7M and V7K Reports The JPK_V7M/V7K reports – Poland’s attempt to merge the summary reporting […]

North America ShipCompliant
June 17, 2021
Can Retailers Do Direct-to-Consumer (DtC) Wine Shipping?

The demand among retailers and consumers for interstate direct-to-consumer (DtC) wine shipping is growing, further bolstered in the wake of the COVID-19 pandemic. Retailer DtC shipping is allowed in just 15 states and the District of Columbia, but retailers still saw significant increases in online orders and DtC shipping in the past year. But what […]

EMEA VAT & Fiscal Reporting
June 16, 2021
VAT Trends: A Shift Toward Destination Taxability for Certain Cross-Border Transactions

As detailed within our annual report VAT Trends: Toward Continuous Transaction Controls, there’s an increasing shift toward destination taxability which applies to certain cross-border trades. In the old world of paper-based trade and commerce, the enforcement of tax borders, between or within countries, was mostly a matter of physical customs controls. To ease trade and […]

EMEA Latin America Mexico VAT & Fiscal Reporting
June 15, 2021
Understanding Mexico’s Carta Porte Supplement

On 1 May 2021, the Mexican tax administration (SAT) released one of the most important updates to the electronic invoicing system of the country since 2017. The update was about the new Bill of Lading Supplement (locally known as Suplemento de Carta Porte) that should be added as an annex to the electronic invoice (CFDI) […]