The most recent update in E-invoicing has introduced changes in e-way bills. As per the latest updates which came into effect on 1st October 2022, E-Invoicing is now applicable to all businesses which have a turnover greater than ₹10 crores. This turnover can be in any year from FY 2017-18 onwards. So, if a business has generated a turnover in excess of 10 crores in any financial year from FY 17-18 onwards, then E-Invoicing applies to that business, even if their turnover is less than ₹10 crores in the current or the last financial year.
Let us take a look at the scope and impact of the new changes in e-way bills after the latest update.
There are two parts in an E-Way bill, as below:
Under the current method, taxpayers manually update the invoice data and transporter details before generating both parts of the e-way bill via the e-way bill portal.
According to changes in e-way bills after new update , they will be auto-populated from the e-invoicing portal itself. Both portals will use the same login credentials as well. However, to fully auto-populate the e-way bill, you will need to mention even the optional details like mode of transport and transporter ID in the e-invoice. The intention behind these updates is to make it easier to generate e-way bills.
The changes in e-way bills after latest update will lead to the following advantages:
The method used to create e-way bills will remain unchanged. However, an additional facility will generate e-way bills from IRN. A user can follow the steps listed below:
There are currently no provisions to cancel e-way bills by cancelling e-invoices. If there are errors in the information entered in the e-invoice, they will be reflected in the e-way bill as well since it is auto-populated. The NIC has recently provided clarification that the e-way bills must be cancelled before the IRN. E-Way bills are not generated for cancelled IRNs.
Integrating the e-invoicing and e-way bill systems aims to streamline and automate the process. The government has additionally connected e-way bills to the submission of GST returns. For taxpayers with two or more consecutive outstanding GST returns, the creation of e-way bills would be blocked. The following advantages for firms will result changes in e-way bills after latest update:
The integration of the e-invoicing and e-way bill systems is set to bring significant changes in e-way bills. The automation of the process will lead to easy compliance for taxpayers, improved accuracy, and reduced tax evasion, benefiting both businesses and the government. The introduction of e-invoicing and the gradual expansion of its application to more taxpayers, including the latest update requiring businesses with a revenue of more than Rs. 10 crores to use electronic invoicing, demonstrates the government’s commitment to digitalization and modernizing the tax system.