India’s e-invoicing reform has been introduced as a very important step towards digitizing the country´s tax controls. Even though the reform has been under discussion for more than a year, the initial roll-out for the implementation process would have been a challenge for all stakeholders which was finally set to begin mandatorily on 1 April 2020 for large businesses.
After the trial period which started in January of this year, it was clear that the infrastructure of the portal, taxpayers, as well as the system in general weren’t mature enough to move to the mandatory stage of the e-invoice reform. Therefore, the expected decision following the meeting of the Goods and Services Tax Network (GSTN) was announced on 14 March: to postpone the deadline for mandatory invoice clearance. The decision was not only deferring the mandatory deadline but also exempting certain taxpayers from the scope of the upcoming mandate.
Since this decision, the Indian government passed the changes with the Notification numbered 13/2020 on 21 March. The latest Notification is amending the previously enacted Notification numbered 70/2019 that tackled e-invoicing for the first time.
So, what’s changed?
The latest Notification postponed the roll-out date for mandatory invoice clearance from 1 April 2020 to 1 October 2020. There is no change in the threshold limit to adopt invoice clearance mandatorily, however there are certain businesses exempted from the scope depending on the sector they operate in. According to the latest Notification, taxpayers that are mentioned in 2, 3, 4 and 4(a) of article 54 of CGST 2017 are no longer in scope for the e-invoicing mandate.
And, what’s next?
The reason behind the postponement of the deadline was because the reform wasn’t ready to be rolled out. Within the coming days the GSTN need to provide clarity on many different aspects of their e-invoicing reform and improve their systems. Similarly, taxpayers must still be made fully aware of all details for the upcoming changes and the clarifications that will be provided by the Indian authorities. Unless these updates are provided in good time, another delay cannot be ruled out which would not be a big surprise for many stakeholders.
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