UPDATED | Are you ready for the Indian mandate?

Originally published on 17 March 2020 | Last updated on 30 July 2020

On July 30th, the Indian Government has released Notification 61/2020 confirming the invoice registration mandate.  The notification confirms 1 October 2020 as the implementation of mandatory invoice registration to the government, prior to sending the invoice to the buyer. Although, the threshold limit of aggregate turnover on the Permanent Account Number (PAN) level has been increased from INR 100 crores to INR 500 crores.

So, what does this mean?

All entities under a PAN that exceeds the threshold of INR 500Cr are liable to report their invoice data to the Invoice Registration Portal as of 1 October 2020.

Background:

The Indian government announced its invoice registration mandate late 2019, putting forward a very challenging go-live date of 1 April 2020. You can read the full back story in our recent post here.

As Tungsten Network was preparing to be ready by 1 April, we have been following the developments around the mandate very closely, including the most recent updates, just over a week ago, when the APIs and mandatory fields were changed significantly.

With only two weeks until go-live for the first group of taxpayers, the Indian government has decided to postpone the effective date of the mandate until 1 October 2020. This decision was taken at the 39th GST Council Meeting on Saturday, 14 March.

Why delay in the face of significant budgetary pressure?

There has been significant criticism from the private sector on the performance and capacity of the IT environment considering the large number of concurrent taxpayers. Infosys, the IT infrastructure provider, stated that the Corona pandemic has impacted the procurement of additional hardware. Also, there are still mismatches between the mandatory invoice registration information and GST law.

In the recent GST Council meeting, important decisions were made, including:

  • Implementation of mandatory invoice registration delayed until October 2020
  • Specific taxpayers will be exempt from the invoice registration requirements, such as banks and other financials
  • Delay until 1 October of the obligation for companies with aggregated turnover exceeding 500Crore Rn to present dynamic QR codes on consumer invoices

Infosys’ non-executive chairman, Shri Nandan Nilekani, will attend the next three GST Council meetings to keep the council abreast of progress.

GST Rate changes

The GST Council recommended several GST rate changes, including an increase of the rate on mobile phones and specific parts from 12% to 18%. The next Council meeting on 1 April 2020 will probably see these proposed rate changes come into effect.

What’s next?

Tungsten Network continues to monitor the developments regarding the Indian mandate closely. We remain committed to supporting businesses in India. You can head over to our dedicated microsite for updates on the mandate, useful resources, and information on how we can support you through this critical change.

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