e-Way Bill New Rule Implementation: e-Invoice Mandatory Before e-Way Bill?

The NIC released an advisory on 5th January 2024 issuing e-way bill new rules but withdrew the same on 10th January 2024. The earlier advisory stated that businesses will find their e-way bill generation being blocked if they do not include the necessary e-invoice details, such as the Invoice Registration Number (IRN) from 1st March 2024. Read on to learn more about the original advisory, its impact on businesses and latest update on its implementation.

Businesses whose e-way bill generation will be blocked

The orginal advisory directed certain businesses falling under the e-invoicing system to generate e-way bills with e-invoice details. It would be mandatory for the following businesses-

• With an aggregate annual turnover of over Rs.5 crore in a financial year falling under the e-invoicing system, 
• Dealing with goods and 
• Undertaking Business-to-Business (B2B) and Business-to-Exports (Exports) transactions.

One must note that this rule does not apply to Business-to-Customers (B2C) transactions, non-supplies (involving delivery challans), non-GST or exempt supplies (bill of supply). Likewise, businesses that do not fall under the purview of e-invoicing can go for direct e-way bill generation.

Date of implementation of the orginal e-way bill advisory

The NIC's original advisory for blocking of e-way bill generation for non-linking of e-invoice details would have applied from 1st March 2024. This means that e-invoice-enabled taxpayers were advised to generate e-way bills and e-invoices together to avoid discrepancies for all their B2B and export transactions starting from 1st March 2024. However, the NIC issued another update on its portal- https://ewaybill.nic.in/ on 10th January 2024, to withdraw the original advisory, further details awaited. A snapshot of the NIC updates column on the e-Way Bill portal is given below-

Additional checks by GSTN from 1st March 2024

The NIC introduced some checks in e-way bill generation to identify mismatches between the e-way bills and e-invoices through the orginal advisory, that is currently withdrawn. For B2B and export transactions, e-invoicing applicable businesses cannot generate e-way bills directly without the e-invoice. 

This applies to the e-way bill categories such as supply, exports, semi-knocked down (SKD), completely knocked down (CKD) conditions, or lots. However, such businesses can continue with direct e-way bill generation for B2C and other non-GST supplies.

Wherever the transporter generates e-way bills, the supplier GSTIN will be validated for this check. If the supplier GSTIN is subject to e-invoicing, then details like the IRN must be compulsorily entered for the e-way bill generation.

The rest of the e-way bill details, such as the Part-B or transporter ID update, shall continue as before.

Impact due to e-way bill blocking

Currently, e-way bill generation gets blocked when taxpayers do not file their GST returns for the previous two consecutive months/quarters. The e-way bill system exchanges information with the GST system for implementation. 

If the original advisory by NIC gets implemented from 1st March 2024, the e-way bill facility will also be blocked if the e-way bill lacks e-invoice details at the time of generation. e-way bill generation without e invoice details can lead to the following issues-

• Delivery of goods can get delayed, adversely affecting business relations.
• Businesses can be penalised by authorities for moving goods without e-way bills.
• There arises a risk of detention/seizure of goods transported without e-way bills and thereafter, the release of goods only upon tax and penalty payment.

However, the orginal advisory has been withdrawn by the NIC without any further details. Hence, until further communication is received, taxpayers must continue to follow the current processes.

Impact on e-way bill generation

If the orginal advisory is implemented, it is likely that any enterprise not generating e-invoices before e-way bills, can face issues. They must first generate e-invoices and thereafter e-way bills with the IRN mentioned in it. Hence, business processes in such enterprises will have to undergo modification. Teams must be retrained for the changed workflows. Since the advisory by NIC was withdrawn on 10th January 2024, the taxpayers should continue to follow current processes.

Immediate Steps for Enterprises

On or before 1st March 2024, enterprises generating e-invoices and e-way bills must ensure that they happen simultaneously or generate e-way bills after generating e-invoices. ERP systems/compliance solutions should incorporate additional validations to disallow direct e-way bill generation for B2B and export sales. However, with the advisory by NIC withdrawn, the taxpayers must wait until any further communication by NIC and GSTN.

Meanwhile, it is always a best practice to generate e-invoice alongwith e-way bills for B2B transactions as this can avoid any mismatches between the two documents at later point.

How can Clear’s Unified e-Invoicing and e-Way bill Solution help?

While the NIC's advisory has been withdrawn, adopting a unified e-invoicing and e-way bill solution always saves your team's time and efforts. Solutions by Clear allows users to- 

• Generate, view and download all e-invoices and e-way bills in one place with a single click. 
• Generate e-way bills with minimal data input and lesser effort after generating IRN on a single platform. 
• Access Clear e-Invoicing’s single-point repository for all e-way bills generated by the seller on their GSTIN, generated for their GSTIN and assigned to them as transport. 
• Undertake a one-click reconciliation of e-way bills with e-invoices for accurate GST return filing. 
• Seamlessly integrate for multi-user and multi-location cases with better access control.

The new e-way bill rules 2024 have put non-compliant businesses on the radar. Details going into the e-invoices and e-way bills must be consistent. Lack of validations in place can lead to compliance delays and cause business disruptions.