New Year and New Requirements for India’s E-Invoicing Mandate

Selin Adler Ring
December 16, 2020

Taxpayers have gone through an eventful year in India. The e-invoicing mandate, initially planned to go live in April 2020, was delayed until October. A couple of months before the October roll-out, the scope of the mandate was reduced by lowering the threshold which left taxpayers below 500 Cr rupees outside of the first go-live requirements. Despite the many last-minute changes, the initial roll-out was considered a success for the Indian authorities and has proven that the e-invoicing platform is technically robust and fit for purpose. This led authorities to extend not only the taxpayer scope of the e-invoicing reform, but also the functionalities of the e-invoicing platform. Taxpayers with a threshold of 100 Cr rupees or more must implement e-invoicing from 1 January 2021 and taxpayers in scope of the mandate must generate their e-waybills through the e-invoicing platform from 31 December. Let’s take a closer look at those dates and their impact.

What’s happening from 31 December 2020?

It was recently announced on the API Sandbox website that taxpayers within scope of e-invoicing will be blocked from the e-waybill system for the generation of e-waybills from 31 December 2020. Therefore, those taxpayers must generate e-waybills associated to the invoices created through the e-invoicing platform by using the same e-invoicing platform. Taxpayers can still generate e-waybills that are not related to invoices generated through the IRP using the pre-existing e-waybill platform. In other words, only e-waybills relating to B2B, B2G and export transactions must be generated through the e-invoicing platform.

Taxpayers have two different API options to generate e-waybills.

  • The first option is generating the e-waybill at the same time as preparing the invoice. In this case, taxpayers will use “Generate IRN API” and provide e-waybill details in the e-invoicing schema. Taxpayers can generate a complete e-waybill or only Part A of the e-waybill. In the case of generating Part-A only, the transporter can complete Part-B of the e-waybill.
  • The second option to generate e-waybills using the e-invoicing platform is to generate the e-waybill after generating the IRN. Here taxpayers must generate the invoice reference number (IRN) first and using the IRN, they can generate e-waybills. “Generate EWB by IRN API” must be used in this case. There is also another API to cancel e-waybills in the e-invoicing platform.

What’s the importance of 1 January 2021?

From 1 January 2021, e-invoicing will be mandatory for taxpayers with a threshold of 100 Cr. rupees or more, effectively meaning that the second phase of the e-invoicing roll-out will kick-start the new year. More taxpayers will be using the e-invoicing platform and more transactional data will be collected by the government. Depending on the success of the second phase implementation, a third phase will be scheduled.

What’s next?

It has already been made clear that the goal of the Indian authorities is to have a nationwide e-invoicing system. Government officials have mentioned April 2021 as a likely date for that roll-out, and even though there is no official announcement on this point so far, it wouldn’t be a surprise to see a new requirement coming up within the next month to make e-invoicing mandatory for all taxpayers in India. Additionally, more e-waybill related functionalities might be added to the e-invoicing platform. Therefore, more APIs and technical documentation are likely to be published on the API Sandbox website.

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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.
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