India's E-invoicing Mandate - Last Minute Relief From Government

October 1, 2020

India’s E-invoicing Mandate Now Live With Last-Minute Relief From Government

India’s e-invoicing mandate is live, but a last minute 30 day grace period granted for taxpayers in scope to obtain invoice reference numbers.

Selin Adler Ring

Author

Sovos

This blog was last updated on February 27, 2024

The Indian e-invoicing mandate is live. Even though there was significant public pressure to postpone the 1 October deadline, the set date remains the same and the initial phase has started for taxpayers with an annual aggregate revenue of 500cr. rupees or more during any financial year after 2017. Even though the mandate has formally been enforced and the system is now up and running, last night was once again eventful for Indian tax officials: The Central Board of Indirect Taxes and Customs (CBIC) announced a 30 day grace period for taxpayers to obtain Invoice Reference Numbers (IRN) with India’s e-invoicing mandate.

Grace period – what this means for taxpayers

In a press release published around midnight, the CBIC stated that, as a last chance, taxpayers will be given 30 days to obtain the IRN for invoices that are required to be sent to the IRP during October 2020. The CBIC further exemplifies it as follows: “In case a registered person has issued an invoice dated 3 October 2020 without obtaining the IRN, but reports the details of such invoice to the IRP and obtains the IRN of the invoice on or before 2 November 2020, this invoice shall be deemed to have been issued in accordance with the prescribed rules.” In other words, invoices that follow these instructions won’t be deemed as invalid and businesses won’t be penalized during the grace period.

While this last minute reprieve will surely be viewed as beneficial by businesses, it’s important to note that it will not continue to roll forward indefinitely. The CBIC has explicitly stated in the press release that no such relaxation will be available for the invoices issued after 1 November 2020.

Market reaction to India’s e-invoicing mandate

Whilst the mandate has now come into force, a further delay beyond today had been expected by many. Last night’s announcement of a grace period will give welcome relief for some taxpayers but the following days will set the tone for how successful the reform is expected to be.

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Selin Adler Ring

Selin is Regulatory Counsel at Sovos. Based in Stockholm and originally from Turkey, Selin’s background is in corporate and commercial law, and currently specializes in global e-invoicing compliance. Selin earned a Law degree in her home country and has a master’s degree in Law and Economics. She speaks Russian, Arabic, English and Turkish.