The GST Council has decided that the use of the Invoice Registration Portal (IRP) is mandatory for all B2B transactions. Since January 1, 2021, the e-invoicing obligation already applies to companies with an annual turnover of more than 100 crore (approx. EUR 12 million). Since April 1, 2021, this obligation affects all B2B transactions.
This also replaced the existing e-waybill system within the IRP, so that invoicing parties do not have to generate a separate electronic waybill.
As of April 2021, there is therefore an obligation in India to use the new reporting system for electronic invoices.
How does automated invoice reporting work in detail?
- E-Invoices are created by invoice issuer or taxpayer directly in their own accounting system and then reported to IRP (either directly via B2B API connection or indirectly via GST Suvidha Provider (GSP)).
- B2B API connection is very complex for a medium and high volume of documents for a commercial sector.
- A direct B2B API connection requires a static Indian IP address and a security audit by a registered agency for security reasons.
- A connection via a GSP is therefore used almost exclusively, which simplifies the entire invoice generation process.
- The IRP then validates the invoice data, checks the GST system for duplicates, provides a unique invoice reference number (IRN), digitally signs the invoice, and adds a QR code.
- The invoice issuer then receives the completed invoice back in signed JSON format.
- After that, the invoice data can be updated in the company’s own ERP system and the invoice can be emailed to the recipient in PDF format, for example.
What are the challenges of e-Invoicing in India?
- Individual management and monitoring of different providers are necessary.
- All requirements concerning electronic invoicing must be met.
- There must be a simple and permissible connection to the respective ERP systems.
E-Invoicing Deadlines in India
- E-invoicing obligation has been in place since October 1, 2020, after the deadline was postponed from April 1, 2020 due to Covid-19.
- Since October 1, 2020, there is a requirement for B2C invoices to contain a QR code.
- As of October 1, 2020, certain taxable groups will be excluded from the scope of the e-invoicing reform. These include, for example, insurance companies, banks and other financial institutions, non-bank financial institutions and passenger transport services.
Due to the very dynamic situation, it can be concluded that changes and new deadlines will continue to come in India in the future. In this regard, we will always keep you up-to-date.
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INPOSIA e-invoicing Specialist