E-Way Bill Compliances Under Goods and
Services Tax and the Latest Updates or advisories on E-way bill (Effective
January 1, 2025)
By Yogesh Verma (CS/LLB) / 2 min read / GST Article
The
Goods and Services Tax (GST) regime introduced the E-Way Bill (EWB) system to
ensure seamless transportation of goods while maintaining regulatory
compliance. This system, integrated with the E-Invoice mechanism, has significantly
reduced tax evasion, enhanced logistical transparency, and streamlined supply
chain operations. On December 17, 2024, the GST Network (GSTN) announced
critical updates to the E-Way Bill and E-Invoice systems, effective January 1,
2025, to further enhance security and compliance.
This
article delves into the basics of E-Way Bills, their role under GST, and the
impact of the latest updates.
What Is an E-Way
Bill?
An
E-Way Bill is an electronic document generated on the E-Way Bill portal for the
movement of goods worth more than ₹50,000 (with some exceptions). It acts as a
unique identifier that ensures compliance with GST provisions during the
transportation of goods.
Key Features of E-Way
Bills:
1. Purpose:
To monitor and validate the movement of goods and prevent tax evasion.
2. Who
Generates It?
o
Supplier: When goods are transported by
road, rail, or air.
o
Recipient: If the goods are transported
by the recipient’s conveyance.
o
Transporter: When the supplier or
recipient has not generated the bill and the value exceeds the prescribed
threshold.
3. Validity:
Based on distance:
o
Up to 200 km: Valid for 1 day.
o
Every additional 200 km: Additional 1
day of validity.
Importance of E-Way
Bills Under GST
1. Prevention of Tax Evasion:
The system minimizes tax evasion by requiring detailed documentation of goods
in transit.
2. Streamlined Logistics:
Simplifies documentation, saving time for businesses and transporters.
3. Transparency in Supply Chain:
Ensures goods movement aligns with tax declarations, fostering trust among
stakeholders.
4. Enhanced Government Revenue: Monitors
taxable transactions efficiently, leading to better revenue collection.
Latest Updates to
E-Way Bill and E-Invoice Systems
The
GSTN’s latest advisory introduces three significant updates to the E-Way Bill
and E-Invoice systems, aiming to enhance security and operational efficiency.
These changes are expected to impact compliance strategies for businesses
across turnover categories.
1. Implementation of
Multi-Factor Authentication (MFA)
Overview:
Multi-Factor Authentication (MFA) is an advanced security feature requiring
users to authenticate their identity using two or more verification factors.
This process adds a robust layer of security, reducing the risk of unauthorized
access.
Current MFA Status:
·
Mandatory for taxpayers with Annual
Aggregate Turnover (AATO) exceeding ₹100 Crores since August 20, 2023.
·
Optional for taxpayers with AATO
exceeding ₹20 Crores since September 11, 2023.
New Rollout Schedule:
·
From January 1, 2025: Mandatory for
taxpayers with AATO > ₹20 Crores.
·
From February 1, 2025: Mandatory for
taxpayers with AATO > ₹5 Crores.
·
From April 1, 2025: Mandatory for all
taxpayers and users.
How MFA Works:
·
Login credentials (username and
password).
·
OTP verification (via registered mobile
number, Sandes app, or similar platforms).
Action Points for Taxpayers:
·
Activate MFA immediately.
·
Ensure the registered mobile number
linked to GSTIN is updated.
·
Follow detailed instructions available
on the E-Invoice and E-Way Bill portals.
2. Restriction on
E-Way Bill Generation Based on Document Date
Overview:
To enhance operational accountability, a new restriction limits the generation
of E-Way Bills to documents dated within 180 days from the date of EWB
generation.
Key Highlights:
• Effective January 1, 2025, documents
older than 180 days will not be eligible for EWB generation.
• Example: Starting January 1, 2025,
documents dated before July 5, 2024, cannot be used for generating EWB.
Impact on Businesses:
·
Promotes timely movement of goods.
·
Minimizes misuse of outdated or
irrelevant documentation.
Action Points:
1. Regularly
audit documentation to ensure it aligns with the 180-day timeline.
2. Update
internal systems and train staff to comply with this restriction.
3. Restriction
on E-Way Bill Extension Period
Overview:
·
The extension of EWB validity will now
be capped at 360 days from the original generation date.
Key Highlights:
·
Effective January 1, 2025, EWBs can only
be extended for up to 360 days from their initial generation date.
·
Example: An EWB generated on January 1,
2025, can only be extended until December 25, 2025.
Impact on Businesses:
·
Encourages timely completion of
logistics operations.
·
Reduces long-term delays and ensures
proper utilization of EWB.
Action Points:
1. Monitor
EWB expiry dates closely.
2. Plan
transportation schedules to avoid unnecessary extensions.
Implications of the
Updates
1. Enhanced Security Compliance:
MFA reduces unauthorized access and enhances the integrity of taxpayer
accounts.
2. Improved Documentation Practices:Time-bound
restrictions encourage better record-keeping and timely logistics execution.
3. Operational Efficiency:
Businesses can streamline their processes by adhering to clear timelines and
restrictions.
Steps for Compliance
with New Updates
1. Activate Multi-Factor
Authentication: Ensure all users have MFA enabled before
the mandated deadlines.
2. Audit Existing EWBs:
Identify and resolve issues with outdated documentation or overextended EWBs.
3. Update ERP Systems: Modify
internal software to reflect new EWB generation and extension rules.
4. Employee Training:
Train staff on the importance of compliance with these updates and their
operational impact.
Benefits of the New
Updates
1. Increased Accountability:
Encourages businesses to adhere to compliance timelines and reduces delays.
2. Enhanced Security:
MFA ensures a higher level of security, protecting sensitive data.
3. Streamlined Operations:
Clear restrictions on document dates and extensions reduce administrative
overheads.
4. Better Revenue Collection:
Timely compliance ensures accurate tax reporting and reduces revenue leakage.
Challenges Businesses
May Face
1. Initial Adjustment Period:
Businesses may face operational challenges during the transition to these new
rules.
2. System Upgrades:
Companies using legacy systems might need significant updates to comply with
the new requirements.
3. Training Requirements:
Employees need to be educated on the implications of these changes and trained
to use updated systems.
Conclusion
The
latest updates to the E-Way Bill and E-Invoice systems mark a significant step
toward enhanced compliance, operational efficiency, and security under GST.
While these changes may require businesses to adjust their existing processes,
they also promise long-term benefits such as streamlined logistics, reduced
fraud, and better revenue collection.
Taxpayers
must proactively embrace these changes by upgrading their systems, training
their teams, and ensuring compliance with the new rules. By doing so,
businesses can not only avoid penalties but also contribute to a more
transparent and efficient tax regime.
For
detailed instructions and support, taxpayers are encouraged to visit the
official E-Way Bill and E-Invoice portals.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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