Summary: E-Invoicing and E-Way Bills are integral components of the GST regime in India, aimed at enhancing transparency and efficiency in business transactions. E-Invoicing standardizes the generation of electronic invoices, ensuring interoperability between different systems and reducing data entry errors. It is mandatory for businesses with an aggregate turnover exceeding ₹5 crores in any financial year since 2017-18, except for certain sectors like banking and insurance. The E-Way Bill, required for the transportation of goods valued over ₹50,000, is crucial for tracking the movement of goods and preventing tax evasion. It must be generated by registered businesses and transporters alike, with specific rules governing its validity based on the distance covered. Both systems are interlinked, with data from E-Invoices being used to automatically populate E-Way Bills, ensuring consistency and compliance across both platforms. Additionally, updates and corrections can be made to both E-Invoices and E-Way Bills under specific conditions, enhancing their flexibility. The integration of these systems supports the smooth flow of goods and secures the overall transaction process under GST.
Q. What is E-invoicing?
Ans. E-Invoicing or Electronic invoicing is a system introduced under GST. e-Invoice resolves and plugs a major gap in data reconciliation under GST to reduce mismatch errors. E-Invoices created on one software can be read by another, allowing interoperability and helping reduce data entry errors. Real-time tracking of invoices prepared by the supplier is enabled by e invoice.
Q. What is E-way bill?
Ans. E-way bill or electronic-way bill is a document introduced under the GST regime that needs to be generated before transporting or shipping goods worth more than ₹50,000 within a state (intrastate) or between two states (interstate). E-way bill was first introduced countrywide on April 1, 2018. This was put into place to facilitate the simple and rapid flow of goods around the nation. One of the most important components of GST compliance for businesses transporting big volumes of goods is the e-way bill. The e-way bill system assists the government in preventing tax evasion and tracking the flow of commodities throughout the nation.
Q. To whom E-invoicing is mandatory.
Ans. E-invoicing will be required starting on August 1, 2023, for registered individuals whose aggregate revenue in any prior financial year from 2017–18 onwards was greater than 5 crores. If in any preceding year from FY 2017-18 (From 1.17.17) onwards the Aggregate Turnover exceeds 5 crores then E-invoicing is mandatory. E-invoice must be made for all Tax invoices whether it be B2B sales, Export sales or any other except B2C sales. However, E-invoicing is NOT applicable to Banking and Insurance sector, GTA, SEZ unit or where the supplier of taxable service is supplying passenger transportation service.
Q. To whom E-way bill is Mandatory.
Ans. When products are moved to or from a registered person worth more than Rs 50,000, a E-way bill needs to be created. Even in the event that the value of the products is less than Rs 50,000, a registered individual or the carrier may elect to generate and carry a E-way bill.
Those who are not registered must additionally create an e-Way Bill. If an unregistered individual provides a supply to a registered individual, the recipient is responsible for ensuring that all compliances are met in the same way as they would if they were the supplier. Also, transporters carrying goods by road, air, rail, etc. also need to generate e-Way Bill if the supplier has not generated an e-Way Bill. E-way bill is not required majorly when Empty cargo or containers are transported or when the distance between to or from between place of business is at 50kms or less than that.
Q. What is aggregate turnover as defined by GST for E-invoicing?
Ans. As per section 2(6) of the CGST/SGST Act “Aggregate turnover” includes the aggregate value of: (I) all taxable supplies, (ii) all exempt supplies, (iii) exports of goods and/or service, and, (iv) all inter-state supplies of a person having the same PAN.
Hence, a registered person with the same PAN but several GSTINs needs to report all taxable, exempt, and export revenue earned under different GSTINs under the same PAN. PAN is used to calculate aggregate turnover rather than individual GSTIN. The aforementioned will not include taxes levied under the CGST, SGST, UTGST, or IGST Acts. All supplies made by the Taxable person, whether on his own account or on behalf of all of his principals, shall be included in the aggregate turnover. However, aggregate turnover shall not include Value of Inward supplies on which tax is levied on reverse charge basis (RCM).
Note – Exempt supplies must be taken into account when calculating aggregate turnover; however, they do not need to be invoiced electronically. Regarding Nil-rated and fully exempt supplies, a bill of supply rather than an invoice is provided.
Q. Do we have to make E-way bill for purely services provided?
Ans. No, An E-way bill is mandatory only if the invoice includes at least one item classified as goods, and the total value of the invoice exceeds ₹50,000.
If the invoice does not include goods or the value does not exceed ₹50,000, an E-way bill is not required.
Q. Till what time E-way bill is valid and is in effect?
Ans. The validity of an E-way bill is determined by the distance that the goods need to be transported. Here’s how the validity is typically calculated:
Validity Period
- Up to 200 km: 1 day from the date and time of generation of the E-way bill.
- For every additional 200 km or part thereof: An additional 1 day is provided.
Key Points to Note:
1. Date and Time Calculation:
The validity period is calculated from the time the E-way bill is generated, not from when the goods are dispatched. For example, if an E-way bill is generated at 5:00 PM on August 1, and the distance is 450 km, the bill would be valid until 11:59 PM on August 3.
2. Extension of Validity:
The validity of an E-way bill can be extended, but this must be done before the expiry of the original validity period. Extensions can be granted due to exceptional circumstances such as natural calamities, law and order issues, etc.
The request for an extension must include a valid reason and can be done through the E-way bill portal.
3. Multiple Vehicles:
If the goods are being transported in multiple stages with different vehicles, the E-way bill’s validity is recalculated based on each stage of the journey.
Q. What is the time limit for E-invoice?
Ans. From November 1, 2023, a new rule applies to taxpayers with an annual aggregate turnover (AATO) of ₹100 crore or more, mandating that e-invoices for tax invoices and credit-debit notes must be generated within 30 days from the invoice date. If not generated within this timeframe, the invoices and credit-debit notes will be considered non-compliant with GST regulations.
There is no defined time limit or period within which e-invoice must be generated for the rest. Hence, for such taxpayers, it is advised to create e invoice on or after the invoice date but before the filing of GSTR-1 returns.
Q. What is Part A and Part B of E-way bill?
Ans. The E-way bill system comprises two parts: Part A and Part B.
Part A provides basic details about the invoice and the consignor/consignee such as Invoice number, Invoice date, invoice value, description about the goods, consignor and consignee details such as Name, address along with Trasport details of mode of Transport.
Part B Provides details about the transportation of goods, Details of the transporter, including their name and GSTIN (if applicable), Vehicle number or transport document number.
Note – Part A needs to be filled out before the E-way bill is generated and Part B needs to be filled out after the E-way bill has been generated, once the goods are ready for transport.
Q. If my Aggregate Turnover Limit has crossed in current year then from when E-invoicing is applicable?
Ans. E-invoicing is applicable in the current year only if the specified limit has crossed in the previous years. Since our limit has crossed in the current year, it will be applicable from next year onwards.
Q. Can we update E-way bill and E-invoice?
Ans. Yes, both E-way bills and e-invoices can be updated, but the processes and conditions for doing so vary.
- Updating Part A of E-way bill – If there are any errors in Part A of the E-way bill (e.g., incorrect invoice details), you can update it before the goods are dispatched. This includes correcting the invoice number, date, and value.
- Updating Part B of E-way bill – Part B of the E-way bill, which contains transport details (e.g., vehicle number), can be updated during transit if there are changes (e.g., if a different vehicle is used). This should be done before the E-way bill expires or before the goods reach their destination to avoid compliance issues.
- Cancellation of E-way Bill – Generally, the cancellation can be done within 24 hours of the generation of the e way bill. An e-Way Bill can be cancelled by the recipient of the consignment at the request of the consignor after 24 hours. And once the time period of 72 hours terminates then the e-Way Bill cannot be cancelled as there is no procedure to e way bill cancellation after 72 hours.
- Updating E-invoice –
Before Filing GSTR-1: If errors are identified in the e-invoice, they can be corrected before filing the GSTR-1 return. Amendments can be made by generating a new e-invoice with the corrected details and ensuring that the old e-invoice is appropriately addressed.
IRN and QR Code: Once an e-invoice is issued and has an Invoice Reference Number (IRN) and QR code, it typically cannot be directly altered. Instead, businesses usually need to issue a credit or debit note to adjust the original invoice details.
Q. How E-way bill and E-invoicing are linked with each other?
Ans. E-invoicing (electronic invoicing) involves the generation of invoices in a standardized electronic format. Once an e-invoice is generated and reported to the government portal, it can automatically generate an E-way bill if the goods are being transported and the conditions for E-way bill generation are met. The data from e-invoices, such as the invoice number, value, and details of the consignor and consignee, is used to populate the E-way bill. This ensures that the information is consistent across both systems.
The e-invoice and E-way bill systems are designed to work together to ensure compliance. When an E-way bill is generated, it cross-verifies with the details in the e-invoice. Discrepancies between the two can lead to non-compliance issues. The e-invoice system provides a unique Invoice Reference Number (IRN) and QR code, which is used in the E-way bill system to validate the invoice details before the E-way bill is approved.
Hierarchy
1. Generate e-Invoice: A business creates an e-invoice with all relevant details and submits it to the e-invoicing portal. The portal generates an Invoice Reference Number (IRN) and QR code.
2. Generate E-Way Bill: Based on the e-invoice details, an E-way bill is created if the conditions for its generation are met (e.g., invoice value exceeds the threshold for E-way bills). The E-way bill uses information from the e-invoice to populate required fields.
3. Update and Track: The E-way bill is updated with transport details and tracked during the movement of goods. Any changes in the e-invoice (such as corrections or amendments) are reflected in the E-way bill system.
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Authors: CA Prashant Taparia | For Inquiries: Email: [email protected] | Contact: +91 98709 25375, +91 99305 98581
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