India is one of the fastest-growing business travel markets in the world. However, it is also one of the most regulated. For global companies, navigating the maze of tax laws, foreign exchange (FEMA) regulations, and data privacy rules can be daunting.
1. The GST Mandate
The Goods and Services Tax (GST) is the single most important compliance factor for corporate travel in India. Unlike VAT in Europe, GST is destination-based and requires precise documentation.
The Challenge
To claim Input Tax Credit (ITC), you need a valid GST invoice from the vendor (hotel, airline, cab aggregator) that includes your company's GSTIN. Most international booking platforms do not support this.
The Solution
Ensure your travel management platform is integrated with the GST network (GSTN) and automatically collects compliant invoices.
2. FEMA and Foreign Exchange
The Foreign Exchange Management Act (FEMA) strictly regulates cross-border payments. Using a personal credit card for business expenses and reimbursing it later is generally fine, but direct corporate payments to foreign entities for services rendered in India can trigger withholding tax (TDS) obligations.
Compliance Alert: Loading a prepaid card in INR using foreign currency must comply with RBI's PPI (Prepaid Payment Instrument) guidelines. Ensure your provider is an authorized entity.
3. Data Privacy (DPDP Act 2023)
India's new Digital Personal Data Protection Act imposes strict rules on how employee data is collected, processed, and stored. Travel data—which includes passport details, location history, and payment info—is considered sensitive.
Key Requirement: Companies must obtain explicit consent from employees before sharing their travel data with third-party vendors.
4. Duty of Care
While not a specific "regulation," legal precedents in India are increasingly holding employers liable for the safety of their employees during business trips. This includes ensuring safe transport, vetted accommodation, and 24/7 emergency support.
How to Stay Compliant
Compliance shouldn't be a burden. At Expatly, we've built these regulations into our code:
- Automated GST Invoicing: We collect and verify every invoice.
- RBI-Compliant Payments: Our payment rails are fully licensed and audited.
- Data Sovereignty: All Indian user data is stored locally in compliance with the DPDP Act.
Simplify Your Compliance
Let us handle the regulations so you can focus on business. Get a compliance audit today.
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