Dear Professional Colleagues,

Greetings of the Day !

National Informatics Centre issued a Notification dated January 05, 2024, regarding the Blocking the generation of E-Way Bill without e-Invoice/IRN details for B2B and B2E transactions for E-invoice enabled taxpayers.

Background

• E-Invoice has been operationalised since October 2020 for taxpayers with Annual Aggregate Turn Over (AATO) above Rs. 500 Crores and eventually in a phased manner, e-Invoice generation is made mandatory for taxpayers with AATO above Rs. 5 Crores.
• From day-one, E-Invoice is seamlessly integrated with e-Way bill system, and accordingly e-Way bills are generated along with e-Invoice. Most of the taxpayers are generating the e-invoice along with the e-way bill.
• However, analysis shows that some of the taxpayers, who are eligible for e-Invoicing, are generating e-Waybills without linking with e-Invoice. In some of these cases, the invoice details entered separately under e-Waybill and e-Invoice do not match with respect to certain parameters. This is leading to mismatch in the e-Waybill and e-Invoice statements.

New change

• To avoid such situations, e-Waybill generation will not be allowed without e-Invoice details from 1 March 2024.
• This is applicable for e-invoice-enabled taxpayers and for the transactions related to Supplies under B2B and Exports. However, EWBs for other transactions, such as B2C and non-supplies will function as usual without any change.

This new proposal has been withdrawn on January 10, 2024.

AMRG Comments

Proposed scheme of linking e-Waybill generation with e-Invoice details introduces both opportunities and challenges for taxpayers. On the positive side, it can enhance tax compliance and reduce evasion by ensuring that transportation details in e-Waybills align accurately with invoice data. However, it comes with complexities, potentially increasing the administrative burden on businesses. Taxpayers must now diligently link e-Waybills and e-Invoices, requiring meticulous record-keeping and data accuracy. This may pose challenges, especially for SMEs, who may struggle with compliance costs and technology upgrades. The transition phase could lead to disruptions and potential errors in compliance.

In light of several challenges, it appears the government has opted to retract this proposal.