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India B2B e-invoicing threshold drops to ₹5 January 2023 – FAQ’s update

New Frequently Asked Questions for e-invoicing and e-waybills

The Indian e-invoicing FAQ’s have been updated this month. Topics covered include:

  • e-invoicing processing with supplier processes
  • e-waybill creation deadlines
  • e-waybills for train transport
  • calculating year-end turnover thresholds
  • creating e-waybills with e-invoices
  • reporting and submissions of e-invoices

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Oct 2022: Latest threshold drop brings thousands more taxpayers into electronic invoicing requirements

From 1 January 2023, the next round of Indian taxpayers obliged to digitally authenticate sales invoices with the GST Invoice Registration Portal operated by the GST Network. The annual sales threshold for clearing e-invoices will be lowered to ₹5 per annum. It had last been decreased to ₹10 annual sales in October 2022. IT preparations of the new wave are already underway.

The aim will be to reach ₹5 per annum perhaps before the end of 2023.

October 2020 e-invoicing phased launch

India introduced mandatory B2B government pre-clearance electronic invoicing from 1 October 2020, completing the phased implementation by 1 April 2021. This was at a threshold of ₹500 per annum. The threshold was then dropped to ₹100 per annum from January 2021. It was cut for the second time to ₹50 per annum in April 2021; and then ₹20 per annum in April. This current threshold, ₹10 per annum was introduced in October 2022.

The regime includes submission of draft sales invoices to the Goods and Services Tax Network (GSTN), the government portal, for checking and validation. Indian GST was introduced in 2017.

Indian B2C e-invoices

For B2C invoices, a QR Code must be included in any invoice by a mandated supplier. Indian e-invoicing is administered by the Central Board of Indirect Taxes & Customs (CBIC), which also oversees the operations of India’s Goods and Services Tax.

India introduced e-way bills in April 2018 as digital notifications of goods movements. Check VAT Calc’s global live VAT invoice transaction and e-invoice reporting tracker to see where else real-time submissions of invoices is being implemented.

Invoice Registration Portal IRP for e-invoices clearance

The steps to issue an Indian e-invoice are as follows:

  • Any draft e-invoice must firstly be transmitted to the Invoice Registration Portal (IRP), which may be done by an Application Programming Interface (API) through a JSON file.
  • The IRP performs basic validation checks on the invoice:
    • Complete invoice details
    • Checks supplier’s and custom’s GST identification numbers (GSTIN)
    • Checks invoice number and date; and
    • Verifies not a duplicate invoice
  • The IRP then issues:
    • a unique Invoice Reference Number (IRN); 
    • a unique Quick Response code (QR Code). This is a square matrix bar code which provides a URL address for electronic readers to access information at the IRP about the invoice. The QR code is used by any party to check the invoice entry in the IRP.; and
    • an IRN e-signature.
  • The invoice and QR code are then shared with the customer by the invoice supplier. The customer must agree to the details.  The supplier and customer must agree on the format to share the invoice as it is not currently available within the IRP. Typically, it is done by PDF or paper copy invoices.
  • The invoice and QR code are also send to the GSTN and the National Informatics Centre (NIC) to ensure all data is reconciled.

VAT Calc’s in real-time global Calculator and Auditor  services produce instant and accurate tax calculations into your ERP, billing, e-commerce or e-invoicing systems.

Asia Pacific e-invoicing

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