Changes in Indian GST e-invoice rules now in place
The Indian government has cut the threshold for mandatory issuing of e-invoices for businesses from INR 500 million ($6.6m) annual turnover to INR 200 million ($2.64m).
This is expected to affect smaller firms, who will now have to mandatorily issue electronic invoices. And India’s Central Board of Indirect Taxes and Customs (CBIC) is warning that businesses that fail to produce a valid invoice will not be able to claim the input tax credit (ITC), and that they could face penalties.
The change, effective from April 1, 2022, will create a substantial increase in reporting requirements for businesses. With this move, the government intends to enable small businesses to embrace technology and plug leakages around tax compliance, including tax evasion among small firms. Small businesses that usually issue informal invoices will have to mandatorily issue e-invoices. Consequently, they will find it difficult to under report their sales as the business-to-business transactions of these entities will be captured at the e-invoicing portal.
Businesses will have to register all e-invoices with the government on its Invoice Registration Portal (IRP). Once the supplier has uploaded the specified particulars on the IRP, a unique Invoice Reference Number (IRN) and a Quick Reference (QR) code are generated.
Only a registered e-invoice with IRN is considered to be valid and non-adherence will result in non-compliance.
E-invoicing has been implemented in a phased manner in India since 1 October 2020.
Court favours jobs in environmental clearance ruling
India’s Supreme Court has businesses contributing to the economy and providing jobs should not be closed for the “technical irregularity” of not obtaining environmental clearance, irrespective of whether or not the unit actually causes pollution.
The judgment came following an appeal filed by a plastic manufacturing operation based in Haryana. The National Green Tribunal had ordered the unit to be closed for not having prior environmental clearance. However, the Supreme Court said that the unit employed over 8,000 people, and had applied to the statutory authorities for consent to operate.
The court added that other branches of the same organisation were ”totally non-polluting units having zero trade discharge”. The court described the lack of “prior” environmental clearance as a “procedural lapse”.
“The court cannot be oblivious to the economy or the need to protect the livelihood of hundreds of employees and others employed in the project and others dependent on the project, if such projects comply with environmental norms,” presiding judge Justice Banerjee said.