Worldwide tax guides /India E-invoicing & Digital Reporting GuideIndiaE-Invoicing & Reporting

India E-invoicing & Digital Reporting Guide

E-InvoicingDigital Reporting
E-invoicing is mandatory Yes

India Electronic Invoicing and Digital Reporting Requirements

Overview
Indirect tax control regimeCTC
E-Invoicing/CTC ModelClearance e-invoicing
Obligation statusLive
Governing entityGST council
Infrastructure/platformIRP (Invoice Registration Portal)
Peppol connectivityNo
Scope
TaxpayersAll registered taxpayers whose aggregate turnover in the preceding financial year exceeds INR 100,000,000 (INR 100million) in India
Taxpayers exempted1. An insurer or a banking company or a financial institution, including an NBFC; 2. A GTA (Goods Transport Agency); 3. A registered person supplying passenger transportation services; 4. A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services; 5. An SEZ (Special Economic Zone) unit (excluded via CBIC Notification No. 61/2020); A government department and Local authority (excluded via Notification No. 23/2021).
Mandatory for Supplies to Special Economic ZonesYes
Domestic TransactionsB2B - yes, B2C - no, B2G - yes
Cross-border TransactionsExport - yes, Import- yes (through reverse charge and/or self billing)
DocumentsInvoices, Credit/debit notes
Supplier-side requirements (AR)
Format(s) while sending to the platformJSON file
Format for exchange with buyer/recipientPaper, PDF or JSON. (PDF is the most common and recommend format by the GSTN.)
eSignature/SealNot required, however, recommended
Buyer-side requirements (AP)
Receiving document in electronic formatOptional
Validation requiredNo. However, QR code verification app can be used to verify the authenticity and get the data of an e-invoice in a readable format.
Acknowledgement of receiptNot required
Response to the document received (Accept or reject)Not required
Storage
Archiving AbroadAllowed with conditions
Archiving Period6 years
Other Digital Reporting Obligations
SAF-T or other accounting filingNot required
GST returnThere are 13 returns under GST to be filed for each state. They are the GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8, GSTR-9, GSTR-10, GSTR-11, CMP-08, and ITC-04. However, all returns do not apply to all taxpayers. Taxpayers file returns based on the type of taxpayer/type of registration obtained.
E-waybillIt is mandatory to issue e-waybills for transportation of goods above 50.000 rupees

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Background

The e-invoicing system under GST was implemented on 1st October 2020 for taxpayers with an aggregated turnover exceeding INR 5,000,000,000 (INR 5,000 million). After a few extensions, e-invoicing was last time extended to businesses with an aggregated turnover exceeding INR 100,000,000 (INR 1,000 million) from 1st October 2022.

More details on the turnover criteria for the E-invoicing phased implementation:

PhaseAggregate turnoverApplicable dateNotification Number
IINR 5,000,000,000 (INR 5,000 million)October 1, 2020https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-61-central-tax-english-2020.pdf and https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-70-central-tax-english-2020.pdf
IIINR 1,000,000,000 (INR 1,000 million)January 1, 2021https://www.cbic.gov.in/resources/htdocs-cbec/gst/notfctn-88-central-tax-english-2020.pdf
IIIINR 500,000,000 (INR 500 million)April 1, 2021https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-05-central-tax-english-2021.pdf
IVINR 200,000,000 (INR 200 million)April 1, 2022https://taxinformation.cbic.gov.in/view-pdf/1009232/ENG/Notifications
VINR 100,000,000 (INR 100 million)October 1, 2022https://taxinformation.cbic.gov.in/view-pdf/1009474/ENG/Notifications

What Types of Businesses Does This Apply to?

For registered persons whose Aggregate Annual Turnover (based on PAN) in any preceding financial year from 2017-18 onwards, is more than the prescribed limit (as per relevant notification), e-Invoicing is mandatory. For taxpayers whose aggregate turnover in the financial year exceeds INR 100,000,000 (INR 100 million), it's mandatory to issue an e-invoice for supplies made from October 1st 2022.

Governmental Body Responsible for E-invoicing in India

The Goods and Services Tax e-invoice system

Penalties for Not Adhering to India's E-invoice Mandates

In the event that there are any differences/errors in e-Invoices, the following 2 penalties are applicable, according to sub-rule (5) of Rule 48 under the CGST Act 2017:

  1. Penalty for non-issuance of e-invoice- 100% of the tax due or INR 10,000 whichever is higher.
  2. Penalty for an incorrect or erroneous e-invoice is INR 25,000.

What does the e-invoicing process in India look like?

  1. Invoice Creation: An invoice is created using accounting or billing software as per the prescribed schema for E-invoicing.
  2. Invoice Registration Number (IRN) Generation: The supplier can generate a unique Invoice Reference Number (IRN) using a standard hash-generation algorithm.
  3. Upload on Invoice Registration Portal (IRP): JSON file for each B2B invoice is uploaded on the Invoice Registration Portal (IRP)
  4. IRP Validation of Invoice Information: The IRP will validate the generated hash/IRN attached with JSON and authenticate the file against the central registry of GST for any duplication. The IRN will be the unique identity of the E-invoice for the entire financial year.
  5. Digital Signature and QR Code Generation: Upon successful verification, the invoice will be updated with IRP’s digital signature on the invoice data and a QR code will be added to the JSON file
  6. Delivery of e-invoice back to the Supplier: IRP will send ****back the signed JSON together with the QR code to the supplier.
  7. E-invoice delivery: Supplier must deliver e-invoice to the buyer. IRP will not send anything to the buyer.

Is SAF-T Needed in India?

No.

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