India’s E-Invoicing Reform: The Clock is Ticking

Selin Adler Ring
September 15, 2020

Taxpayers are only two weeks away from the initial start of India’s e-invoicing reform. Even though the continuous transaction controls (CTC) invoicing system was officially first introduced in December 2019, there have been many changes and updates from the GSTN. In addition to changes announced in July which affected the schema and scope for India’s planned e-invoicing reform, August and September saw further updates and clarifications to the tax authority’s e-invoicing platform. Despite these various changes, the official enforcement date remains 1 October 2020.

What are the latest updates?

The GSTN Council held a webinar on the e-invoicing system on 14 August 2020.  In it they gave detailed information on how the proposed system would work and also responded to questions raised by taxpayers. The following clarifications are the highlights from the webinar:

  • Inclusion of a QR Code on invoices is mandatory and it can appear anywhere on a PDF or printed invoice
  • Inclusion of an IRN on a PDF or paper invoice is optional as it already forms part of the QR code
  • Acknowledgement number and acknowledgement date are optional for printing of the invoice
  • If the date of the invoice is in October, even if it relates to transactions before October, it should be transmitted to the government platform (called the Invoice Registration Portal, or IRP).

Indian officials continue to provide technical updates as well as clarifications including new release notes published on 8 September 2020 on the API Sandbox web page. According to the release notes, E-Commerce Operators (ECOs) are now able to register and test the APIs on the sandbox system. This means that the e-invoicing system is also available for ECOs to transmit the JSON files to the IRP, generated by them on behalf of suppliers. Another significant update provided with the release notes is that there will be a mobile application for verification of QR codes and signed e- invoice files. In addition to these, there are updates on the validation rules and enhancements on the APIs.

What’s next?

Well, this really depends on the success of the initial implementation. It’s inevitable we’ll see further technical changes and further enhancements in the coming months. On top of that, there might be regulatory changes in the scope of taxpayers that must comply. Considering the eventual goal of the reform is to adopt a CTC system which all taxpayers are a part of, the scope of the mandate will certainly expand to include more taxpayers.  Some taxpayers currently remain out of scope as the threshold limit for the mandate was increased just one month before the 1 October go live date. It’s very likely that they will again be in scope after the e-invoicing system is proven to work sufficiently.

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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.
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