4 Challenges of the New India E-invoicing Mandate GSPs Can’t Solve

This blog was last updated on January 28, 2020

The deadline for the electronic invoicing mandate in India is rapidly approaching, and if multinationals aren’t careful, compliance issues could catch some SAP customers by surprise.

On April 1, India will begin enforcing its own unique version of mandatory e-invoicing for all but the smallest businesses in the country, although the Indian tax administration has yet to completely clarify all elements of the mandate. While the mandate does technically allow for some paper-based invoicing using QR codes, it requires a digital signature from the government through an Invoice Registration Portal (IRP) on each invoice for clearance. For larger businesses, e-invoicing is the only feasible option for complying with the mandate. Furthermore, the implementation of this mandate is very likely the first step toward a full e-invoicing mandate. 

April e-invoicing deadline brings India e-invoicing challenges into focus 

Companies have long known that the mandate to enforce payment of goods and services tax (GST) was coming, but the arrival of an enforcement deadline creates urgency around addressing a series of potential problems SAP customers might encounter as they work toward compliance:

Localization. SAP’s core financial applications are not localized, which can cause problems with data archiving and accessibility. The ability to property store and access invoice data is critical to staying in compliance with the new e-invoicing mandate and responding to audits. A lack of localization could put multinational SAP customers at risk of having to conduct expensive and time-consuming audit responses.  

Updates. Many companies are not running the latest enhancement packs for SAP. In order to comply with the new mandate, those customers will have install OSS releases. Unfortunately, installing OSS releases can have a disruptive impact on global SAP templates and can lead to broken or malfunctioning financial processes. Managing installment of OSS releases is also difficult and resource-consuming; installation of a new OSS release could take six months, carrying the process long past India’s April 1 enforcement deadline, and prove to be unexpectedly expensive. 

Integration. Most international companies have different invoicing scenarios from country to country and don’t understand how those processes are integrated into a global, company-wide  process, if one even exists. A lack of invoice processing integration can lead to problems staying in compliance in India and elsewhere, and non-compliance can lead to dire consequences, including fines, penalties, missed shipments and payments, and strained relationships with suppliers and customers. 

Change. The Indian tax authority is still fleshing out details of the mandatory e-invoicing mandate and will likely continue to do so in the months and years to come. E-invoicing mandates around the world tend to change rapidly and suddenly, leaving SAP customers scrambling to adapt to shifts in the compliance landscape and incorporate them into critical financial processes. India will be no different, and falling out of compliance in such a large and critical country is simply not an option. SAP customers need a partner that will track and implement changes for them. 

GSPs can’t solve India e-invoicing problems

GST Suvidha Providers, or GSPs, provide web platforms that help companies process invoices as the government reviews and accepts the electronic documents. But while GSPs are helpful and even necessary, they don’t address the problems SAP customers are likely to face in the process of complying with the new Indian e-invoicing mandate.

GSPs are primarily processors of information, not enablers of compliance. By nature, they do not provide localization or updates to SAP financial applications. Domestic in scope within India, they also do not offer multinational integration of e-invoicing systems, and they do not adequately track changes to e-invoicing mandates and incorporate those changes into core systems.

Multinational SAP customers looking to comply with e-invoicing in India by the rapidly approaching deadline need a compliance partner that understands and can address the problems companies will face as they prepare for April 1 and beyond. With the Indian government finally getting serious about mandatory e-invoicing and the specifics of the mandate changing rapidly, a lack of preparation–and a compliance failure–is simply not an option.