Indian e-Invoicing Mandate: Why Choose a Global Service Provider?
New regulations for mandatory e-invoicing in India will enter into force in October 2020 and businesses must find the right solution to fulfil the requirements. Tuba Kabasakal, Junior Regulatory Associate and Luis Ortega, Managing Director for Middle East, Africa, Asia, at Pagero highlight why a global service provider is the most efficient way to become and stay compliant.
From 1 October 2020, e-invoicing will be mandatory in India for businesses with a previous year’s revenue greater than Rs 100 crore. Invoices that do not fulfil the new requirements will be considered invalid. With new regulations looming, businesses are searching for a solution to be able to comply. It is often hard to find services tailored to the needs of each business—especially in an environment where everything changes so quickly and it is vital to adapt accordingly.
GSP and compliance vendor limitations
To fulfil the mandate requirements, Indian businesses could opt to work with a GST Suvidha Provider (GSP), a service provider approved by the Goods and Services Tax Network (GSTN) that assists interaction with GST systems through a web platform. While GSPs can be helpful, they do not sufficiently monitor changes made to e-invoicing mandates or help businesses adapt quickly to comply with regulations and changes.
It is also crucial to emphasise that GSPs only provide local services in India and do not enable cross-border exchange. The only connection a GSP facilitates is between an Indian business and the GSTN. The service neither connects businesses to each other (B2B invoicing) nor to government authorities (B2G) outside of India.
Pure compliance vendors, on the other hand, lack the wider perspective businesses need when they start going digital in their operations. Digitalisation efforts by Indian authorities will soon lead to the need for businesses to adapt their accounts receivable and payable processes, which pure compliance vendors simply cannot help with.
The solution: a global service provider and open network
Fortunately, there is an answer to these problems. A global e-invoicing service provider, like Pagero, with an open, interoperable network combines separate services of multiple service providers and vendors into one complete solution.
The right service provider not only takes care of local requirements but also stays two steps ahead of technical and regulatory developments in every country and region that a business operates in. Beyond this, they focus on more than just compliance with additional digitalisation services that help businesses prepare for the future.
Achieving compliance is not enough – maintaining it is key
With expanding government-driven regulations and new technologies becoming available every day, complying with local rules is increasingly challenging.
As the Indian e-invoicing mandate approaches, Indian authorities are still publishing new developments and making changes to the rules. This is very likely to continue even after the order enters into force. Mandates and related practices are never static and change very quickly all over the world.
All of this considered, maintaining local compliance is burdensome for businesses. A global e-invoicing service provider, however, eliminates the need for businesses to sift through constantly changing requirements. A comprehensive service, continuously updated platform and zero downtime automatically keep businesses updated and ready for future changes.
With all the moving parts involved when an e-invoicing mandate comes into effect, the seemingly simple options for compliance often come with unexpected complications.
To learn more about the October 2020 mandate and solutions that ensure compliance in the Indian market, Pagero will be hosting a live webinar on the 27th May. Join the discussion with our compliance experts and register, or get in touch directly with Luis on Luis.Ortega@pagero.com