From March 1, 2024, businesses with turnover above Rs 5 crore will not be able to generate e-way bill without including e-invoice details for all B2B transactions. This is a new rule introduced by the government to ensure better compliance and prevent tax evasion under the GST regime.
What is an e-invoice?
An e-invoice is an electronic invoice that is generated on the Invoice Registration Portal (IRP) of the GST system. It contains a unique Invoice Reference Number (IRN) and a QR code that can be verified by the tax authorities and the recipients. An e-invoice is not a process for generating invoices on the portal, but a process for registering invoices that are generated by the taxpayers using their own accounting or billing software.
What is an e-way bill?
An e-way bill is an electronic document that is required for the movement of goods of value more than Rs 50,000 within or outside a state. It contains details of the goods, the supplier, the recipient, the transporter, the vehicle number, etc. An e-way bill can be generated electronically by uploading relevant details on the e-way bill portal or through SMS.
Why is e-invoice mandatory for e-way bill generation?
The government has made e-invoice mandatory for e-way bill generation to ensure that the details of the goods being transported are consistent and accurate. This will help in reducing errors, duplication, fraud and tax evasion. It will also facilitate faster verification and validation of invoices by the tax authorities and the recipients. It will also enable auto-population of GST returns and e-way bills, thereby simplifying compliance and reducing manual intervention.
How to generate e-way bill with e-invoice details?
To generate an e-way bill with e-invoice details, the taxpayer or the transporter has to follow these steps:
- Generate an e-invoice on the IRP by uploading the invoice details in JSON format or using GePP tool or API integration.
- The IRP will validate the invoice details and generate an IRN and a QR code. It will also digitally sign the invoice and send it back to the taxpayer or the transporter.
- The taxpayer or the transporter has to print the invoice with the IRN and QR code and share it with the recipient.
- The taxpayer or the transporter has to login to the e-way bill portal and enter the IRN in Part A of Form GST EWB-01. The portal will auto-populate the invoice details in Part B of Form GST EWB-01.
- The taxpayer or the transporter has to enter the vehicle number and other details in Part B of Form GST EWB-01 and submit it.
- The portal will generate an e-way bill number (EBN) and a QR code. The taxpayer or the transporter has to print the e-way bill and carry it along with the invoice during the movement of goods.
What are the consequences of not generating e-way bill with e-invoice details?
If a taxpayer or a transporter fails to generate an e-way bill with e-invoice details for B2B transactions from March 1, 2024, they will face the following consequences:
- The portal will block them from generating any further e-way bills until they comply with the rule.
- The tax authorities may intercept and inspect their goods during transit and levy penalty and fine for non-compliance.
- The recipient may reject their goods or delay their payment due to lack of proper documentation.
Therefore, it is advisable for taxpayers and transporters to comply with the new rule and generate e-way bills with e-invoice details from March 1, 2024.