e-invoicing India: Guide for UK Business

Planning to do business in India? If you’re a UK company selling to Indian clients or with a branch in India, you’re going to need to know about invoicing customs and rules there.

In this guide, we’ll be looking at e-invoicing in India, including what it is and how it affects business-to-business (B2B) transactions. Electronic invoicing is becoming more common in many countries worldwide, and there are even rules about when you need to use it.

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e-invoicing India - An overview

India’s government brought in new rules making e-invoicing mandatory for B2B transactions in October 2020. The department in charge of the project is the Goods and Services Tax (GST) Council.

The GST E-invoice Mandate started with businesses with an annual sales threshold of Rs 500 crore (5 billion rupees).

On 1st January 2021, businesses with an annual sales threshold of Rs 100 crore (1 billion rupees) were brought under the new rules, followed by all businesses from April 2021.¹

Companies must be registered with the GST portal, and use the government’s electronic invoicing or e-way bill platform.

The initial launch of the scheme was voluntary. But now that it has been rolled out to include all businesses, there may be penalties to pay for non-compliance. For example, if your business fails to generate an e-invoice according to the regulations, you could have to pay 100% of the tax due or 10,000 INR (whichever is the higher of the two).²

UK companies e-invoicing India

The new GST e-invoicing India regulations will affect any business registered for Goods and Services Tax in India.

This means that if you run a UK company with branches, entities or subsidiaries in India, you need to know about it. You may need to take steps to ensure your invoicing processes are fully compliant with the rules, or you could face costly penalties.

If you’re based in the UK and only sell goods or services to clients in India, you may not need to change your invoicing practices. However, it’s best to do some research just the same, and speak to your Indian clients to find out about their requirements.

India e-invoicing requirements

Let's take a look at the key e-invoicing requirements in India:³

• Businesses must register on the GST portal and the government’s Invoice Registration Portal (IRP) or e-way bill platform
• Electronic invoices can be generated through a company’s own ERP or billing systems, but they must then be uploaded to a unified Government Portal for authentication
• All e-invoices must include a unique Invoice Reference Number (IRN) generated and verified by the IRP portal. A QR code will also be included so that invoices can be validated offline
• Invoices must be in the JSON format, following GST rules
• Digital signatures aren’t mandatory at the moment

e-invoicing India - FAQs

Still have questions about the requirements for electronic invoicing or e-invoicing software in India? Read on, as we’ve put together some answers to frequently asked questions on this topic.

Is electronic invoice mandatory in India?

Electronic invoicing is mandatory in India for all businesses and organisations involved in business-to-business (B2B) transactions. This is only the case for companies registered for Goods and Services Tax (GST) in India,² so international businesses selling to Indian clients may not be required to comply with the rules.

The rules came into effect in October 2020, with a gradual expansion of the rules to include businesses in all annual turnover brackets.

What are the rules for e-invoicing in India?

There are a number of rules and requirements to comply with India’s mandatory e-invoicing system. The trickiest to follow involve registration, as it’s necessary to register with both the GST portal and the government’s Invoice Registration Portal (IRP) or e-way bill platform.

Once this is done, companies need to ensure that their invoices are in the correct JSON format. They must also ensure that each e-invoice has a unique Invoice Reference Number (IRN) that has been generated and verified by the IRP portal.

If you fail to comply with GST e-invoicing rules, you could face a penalty.

What is the limit of GST e invoicing?

The GST e-invoicing rules cover all B2B transactions, with a handful of exemptions. It’s also mandatory for business-to-government (B2G) supplies of goods and services.²

However, this is the extent of the rules, as mandatory e-invoicing doesn’t currently apply to business-to-customer (B2C) sales.

What is the difference between an e-invoice and a normal invoice?

An e-invoice is a digital version of an invoice document, which is submitted and processed electronically. A standard invoice is usually in paper form, and requires manual processing and filing.

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Your Wise Business account comes with local account details to get paid in major foreign currencies like Euros and US Dollars just as easily as you do in Pounds.

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After reading this guide, you should have a better grasp of the e-invoicing rules and requirements in India.

If your business has any kind of entity or branch based there, it’s likely that these rules will apply to you - even if your main business is headquartered in the UK. So, it’s important to take steps to update your invoicing processes and make sure you fully comply with GST e-invoicing policy.

If unsure what you need to do, it’s recommended to consult a tax or accountancy specialist for expert advice.

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Sources used for this article:

1. Avalara - India e-invoice
2. Bizongo - What Happens If You Don’t Comply With The GST E Invoice Mandate?
3. Edicom - e-Invoicing in India

Sources checked on 30-04-2024.