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India B2B e-invoicing update

Delayed: B2B e-invoicing with e-way bill issuance requirement

On 11 January 2024, the National Informatics Centre confirmed postponing plans to require e-invoicing-mandated taxpayers to generate e-way bills with e-invoice details. The plan was to start the obligation from 1 March 2024.

E-way with e-invoice checks on hold

Goods movements within India will eventually require an e-way electronic reporting and e-invoice details on B2B and export transactions. The aim of the National Informatics Centre, which operates the e-way portal, is to reduce the opportunity for Goods & Services Tax fraud by reducing differences between the two reporting regimes.

Mandatory e-invoicing, with live governmental reporting, was first introduced in India in October 2020. The threshold for reporting has gradually been reduced, and now stands at ₹5 per annum since 1 August 2023.

An E-way is an Electronic Way bill for movement of goods. It includes information such as the name of consignor, consignee, transporter, the point of origin of the movement of goods and its destination.  A GST registered business cannot transport goods in a vehicle whose value exceeds Rs. 50,000 without an e-way bill which is generated by registering a movement of goods on the government’s E Way Bill portal.

B2C-related goods movements will not require e-invoice details on the e-way bill.

Separately, taxpayers with an annual aggregate turnover exceeding Rs 5 crore will be required to provide at least a 6-digit Harmonized System of Nomenclature (HSN) code, while those with less than Rs 5 crore need to provide at least a 4-digit HSN code.

Dec 2023: CBIC says existing B2B e-invoicing to be extended to B2C 2026

A member of the Central Board of Indirect Taxes & Customs has said that the government wishes to bring Business to Consumer transactions into the B2B e-invoicing regime which was launched in 2020.

The launch date is likely to be 2026 or 2027.

Since 1 August 2023, all businesses with an annual turnover of ₹5 must use the centralised e-invoicing regime.

Nov 2023: GST Network imposes 30-day e-invoice upload deadline 1st Nov 2023

The GSTN has imposed a 30-day e-invoice uploads deadline to the Invoice Registration Portal (IRP).

This new deadline has been moved several times, and was originally intended to be a 7-day deadline.

The 30-day countdown starts from the transaction and not date of receipt. Initially, this will only apply to taxpayers with a turnover of Rs 100 crore and above. This will apply to credit or debit notes.

Presently, taxpayers can include e-invoicing at current date and there is limited legal definition of timescale.

1 Aug 2023 India cuts mandatory e-invoicing threshold to ₹5 per annum 1 August 2023

The Ministry of Finance’s Central Board of Indirect Tax and Customs (CBIC) has set 1 August 2023 as the date to lower the Indian mandatory e-invoicing threshold from ₹10 to ₹5 per annum (INR 50 million or approximately US$600,000). The threshold was set at ₹10 in October 2022. The threshold is based on any year in the prior five financial years.

The option for voluntarily e-invoicing via the national e-invoicing registration portal (IRP) was opened April 2023.

April 2023 – Option for voluntary GSTN e-invoicing opens

The GSTN has opened its national e-invoicing registration portal (IRP) to all taxpayers to use for creating and sending electronic invoices to customers. Presently, only taxpayers with ₹10 or above sales revenue per annum are mandated to use the governments e-invoicing system.

Under GST law, businesses cannot avail input tax credit (ITC) if invoices are not uploaded on the IRP.

Nov 2022 – 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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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.

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