Electronic Invoicing in India
Is e-invoicing mandatory in India ?
The Good and Services Tax (GST) was implemented in India in 2017 and has replaced most of the previous indirect taxes levied on goods and services on both federal and state level. The law in India allows explicitly e- invoicing for GST. Digital signatures based on the Indian IT Act can be used for ensuring the I&A of the invoice.
From 2020 onwards, India’s GST Council introduced an e-invoicing system on a voluntary basis for Business-to-Business (B2B) organisations. The new system required organisations to input invoice data into the public platform Invoice Registration Portal (IRP) as mandatory step before the invoice can be issued. The IRP then assign a unique invoice number for each invoice submitted.
The e-invoicing mandate included B2B, Business-to-Government (B2G) and export transactions as of October 2020 for taxpayers with annual sales of more than 500 Cr (58 million EUR). From January 2021, taxpayers with aggregate turnover of more than 100 Cr. Rupees (12 million EUR) must comply with the CTC invoicing rules. As of 1 April 2021, businesses with an aggregated turnover of more than 50 Cr (5,6 million EUR) in the last three fiscal years must adopt the e-invoicing mandate.
The e-invoicing mandate is expected to be extended to smaller companies and the Indian Government has stated that its goal is to extend the B2B mandate to all companies soon.
The invoices shall be issued to the IRP in JSON format. Once the document is submitted and validated, the invoice is signed, and the IRP will assign a unique number (IRN). A QR code is generated for the supplier and buyer to confirm the e-invoice authenticity and registration.
IRN and QR code must always be provided when issuing the paper, PDF, or JSON invoice.
The Central Board of Indirect Taxes & Customs website can be visited here
The GST Council proposes pilot B2C e-invoicing
The 54th Goods and Services Council (GST Council) meeting was held on 9 September 2024, chaired by the Union Finance and Corporate Affairs Minister Nirmala Sitharaman. Among the key clarifications and trade facilitation initiatives, the GST council recommended to roll out pilot B2C e-invoicing system.
The GST Council issued a press release that is made available here. The release includes a recognition of the success of the B2B e-invoicing system and announces the intention to extend any potential benefits of e-invoicing to retail. The GST Council mentioned to expected benefits for the retail sector such as business efficiency and the compatibility with environmental policies. The pilot B2C implementation will enable retail customers to verify the reporting of invoices in GST returns. It will be voluntary and will be introduced in selected sectors and states.
The Goods and Services Tax Network (GSTN) introduced a new rule, which claims that starting from 1 April 2025, uploading e-invoices older than 30 days on the Invoice Registration Portal (IRP) will not be allowed for the larger category of GST taxpayers.
According to the new rule, the companies with Annual Aggregate Turnover (AATO) of Rs. 10 crores and above, will no longer be allowed to report e-invoices older than 30 days from the date of reporting on IRP portals. This updated limit will apply to all types of documents, including invoices, credit notes, and debit notes that require an Invoice Reference Number (IRN).
Want to learn more about e-Invoicing compliance?
Download our Global e-invoicing and Tax Compliance fact sheet here for more information.
Archiving
The storage period of invoice in India is 8 years after the end of the issuing fiscal year.
Storage abroad is allowed subject to online access. However, certain sectors could have stricter regulations.
Want to know more about Basware’s archiving services?
Download our Basware Vault fact sheet here to learn more about our flexible and scalable solution.
Basware Services
For suppliers, Basware supports invoice registration to Invoice Registration Portal (IRP) and provides Invoice Reference Number (IRN) and QR code.
For buyers, Basware offers scanning solutions and SmartPDF services for documents in English.
Want to find out how we can help in your specific case?
Speak to a member of our team to learn more.
Interoperability
At Basware, we are passionate about delivering the benefits of open interoperability to our customers. That’s why we have partnered with more than 220 e-invoicing networks around the world to ensure the Basware Network remains the largest open commerce network of buyers and suppliers.
Our advice
Currently, India is completing the rollout of the e-invoicing mandate for B2B and B2G organizations. The predominant invoicing method is emailed PDFs and true electronic invoicing (XML or EDI-based).
The e-invoice mandate has been adopted firstly to large organizations and then gradually mandated to smaller companies depending on their size and turnover. However, there are some exceptions in its application for certain activities.
We strongly advise implementing our sending and receiving integral solutions. We will provide invoice registration (IRP) under GST, and IRN/ QR Code sending validation all together with our solid solutions.
With Basware services, organizations are able to improve the efficiency and accuracy of their capture process, reduce processing time and speed up payments.
Want to understand how we can help in your case?
Get in touch with our experts.
