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, through Notification No. 10/2023, the Ministry of Finance has reduced the threshold for mandatory e-invoicing to INR 50,000,000 (INR 50 million), effective August 1, 2023. GST-registered individuals with turnover above this limit in any financial year from 2017-18 are required to generate e-invoices (for further details on this, refer to our blog).

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

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 preceding financial year exceeds INR 50,000,000 (INR 50 million), it's mandatory to issue an e-invoice for supplies made from August 1st 2023.

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 is the time limit for reporting e-invoices on the Invoice Registration Portal (IRP)?

• The GSTN has recently imposed a time limit for reporting invoices on the Invoice Registration Portals (IRPs).
  • Taxpayers with an aggregate turnover greater than or equal to INR 1000 million (100 crore) must ensure the generation of an e-invoice within seven days of the invoice date.
  • Taxpayers with an annual aggregate turnover of less than INR 1000 million (100 crore) are currently excluded from this requirement.
• The exact date of implementing this time limit is yet to be announced.

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.

E-Invoicing & Global Tax Automation with Fonoa

One way to comply with Digital Reporting Requirements in India is to use a provider like Fonoa.

With Fonoa you can:

• Have one integration for your global needs, including India
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• Rest assured that transactions are successfully reported or queued for internal investigation with our retry mechanisms
• Get full visibility with our dashboards by filtering criteria, analyzing granular transaction data, and quickly importing /exporting information