E-Invoicing in India

India has introduced an e-invoicing framework that requires taxpayers to transmit their invoice data to its government portal.

The Indian e-invoicing system now falls under the category of continuous transaction controls (CTCs).  Invoice data must be transmitted to the governmental portal before an invoice can be issued.

As the fifth largest economy in the world, the scope of the mandate is far reaching.

For a snapshot of the key details for this mandate, including the mandate aim, scope, quick facts and key dates, download the infographic.

E-invoicing since 2017

E-invoicing has been explicitly permitted in India since the implementation of GST Laws in the country in 2017.  The e-invoicing system has been classified as a “post audit” system in which taxpayers had much freedom and few constraints on how to generate or exchange e-invoices.

However, following the global trends in indirect tax control, India recently introduced a new e-invoicing framework which envisages transmission of their invoice data in a structured JSON format to the tax authority’s portal before the invoice is made available to their buyers.

Continuous transaction controls

Under the new framework, the Indian e-invoicing system falls under the category of CTCs due to the invoice data reporting obligation to the government portal being a mandatory step before an invoice can be issued.

As a result of successful transmission of the JSON, the invoice registration portal (IRP) will assign a unique number for each invoice. The legal validity of the invoice is conditional of the IRP digitally signing the invoice and providing an invoice reference number (IRN). The JSON schema is only mandatory for the invoice data to be reported in the electronic format to the IRP and to receive the corresponding signed file from the IRP.

Taxpayers have the discretion of exchanging their invoices in JSON or PDF format as well as in paper form.  Invoices corresponding to business-to-business, business-to-government and export transactions are in the scope of the CTC clearance invoicing system.  Business-to-consumer invoices are left outside the scope of the clearance process, however additional QR code requirements exist for this document type.

E-invoicing at the core of India’s digital tax controls

The e-invoicing platform will have backend connectivity with the GSTN and e-waybill platforms. Data collected from the e-invoicing system will be recycled and used by the government portal to auto populate the ANX-1 part of the GST returns for the seller and the ANX-2 for the buyer as well as to generate e-waybills. Therefore, the e-invoicing platform will be at the core of India’s digital tax control system.