This blog was last updated on October 17, 2024

During the past few months, in the absence of formal clarification, there has been much speculation on whether the Indian authorities would move forward with the expansion of the mandatory e-invoicing scope. While some have raised concerns that the Indian mid-market to SME segment would not be ready for such a change, others, including government officials, have reinforced the message that the expansion would proceed according to plan for the Indian e-invoicing system.

On 8 March 2021 the Central Board of Indirect Taxes and Customs (CBIC) issued a Notification lowering the threshold for mandatory e-invoicing from 100 Cr. rupees to 50 Cr. rupees. Taxpayers that are now in scope must comply with the continuous transaction control (CTC) invoicing rules by 1 April 2021 at the latest.

While taxpayers have already been provided with access to the API Sandbox testing environment in order to prepare, the late formal publication of the Notification leaves affected taxpayers with little time to comply.

The Indian CTC invoicing system

The Indian e-invoicing system requires taxpayers to transmit invoice data in JSON format to the Invoice Registration Portal (IRP) before exchanging the legal invoice with their counterparties.

Once the JSON file is transmitted to the IRP, the IRP performs certain checks and business validations. After passing the validation process without any errors the IRP generates the invoice reference number (IRN), includes it in the JSON, signs the JSON and registers it.

The IRP also generates the QR code data that must be included in the PDF or paper version of the invoice, if such is created. A graphical representation of the QR code can be generated using this QR code data. Taxpayers can exchange their invoices in JSON or PDF format, or in paper form.