How the introduction of e-invoicing made e-way bills more convenient
To streamline indirect taxation, the Government of India introduced the Goods and Services Tax (GST) in 2017. Based on feedback and with the goal to boost GST compliance, the government made various amendments.
One among them was the introduction of e-way bills for the inter-state transportation of goods and services in 2018. As per the rules, any entity registered under the GST regime needs an e-way bill if the value of goods exceeds ₹50,000.
To make the process of filing GST more convenient, the government made yet another change in 2020 through the gradual introduction of e-invoicing. As per this system, certain entities are required to generate e-invoices for B2B transactions.
At the time of its introduction, e-invoicing was only for entities having a turnover of over ₹500 Crores. This was later changed to ₹100 Crores, then ₹50 Crores, and the limit now is at ₹10 Crores. This will change to ₹5 Crores from 1st August 2023.
Under e-invoicing, entities can electronically authenticate their invoices, facilitated by the GST portal. This results in a more streamlined process for businesses to file GST returns and has also made the process of generating e-way bills easier.
Read on to learn more about e-invoice, e-way bills and how the introduction of e-invoicing has made e-way bill generation more convenient.
What is an e-way bill?
An e-way bill is a document that GST-registered entities are required to generate for the movement of goods from one state to another. This requirement is applicable only when the value of goods exceeds ₹50,000.
An e-way bill contains the following details:
- Consignor name
- Consignee details
- Information about the transporter, including ID
- Places of origin and destination
As per Section 68 of the Central GST Act, the transporter needs to carry an e-way bill when shipping goods interstate. The good news is that as a business owner, creating this document is simple. To generate your e-way bill, log in to the e-way portal and choose the mode you prefer.
These modes include:
- Web
- SMS
- Mobile Application
- Bulk upload
- API for Large Taxpayers
What is an e-invoice?
Introduced in 2020, e-Invoice is a system that electronically authenticates invoices. Entities upload the invoices on the Invoice Registration Portal (IRP), which then attaches a unique identification number to each invoice.
Post this, the invoice information gets transferred to the e-way bill portal and GST portal in real time. As such, the invoices are available on the common portal through e-invoicing.
How are e-way bills and e-invoices connected?
An e-way bill contains two parts:
- Part A: Information about the invoice, such as invoice number, GSTIN of the supplier and recipient, place of origin, and destination, HSN codes, and so on
- Part B: Transporter details like vehicle registration number and transporter ID
The e-way bill login procedure is now simpler. Earlier, to generate a bill, manual entering of data was required. But under e-invoicing, the data gets transferred to the portals seamlessly.
Thanks to this automation, you do not have to manually fill out GSTR-1 as well as Part A when you generate your e-way bill. This simplifies the process of generating your e-way bills at the time of transporting goods.
How businesses benefit from the e-invoicing system
The primary objective behind the introduction of the e-invoicing facility was to make the GST filing and e-way bill generation process easier and more convenient.
Apart from making compliance to GST and e-way bill generation more efficient, e-invoicing helped the government in curbing tax evasion. In addition to the government being able to see a boost in tax collection, businesses have benefited from e-invoicing in many ways.
The integration of the e-invoice portal with e-way bills has the following benefits for GST-registered persons:
- The real-time transfer of data from one portal to the other eliminates the issue of mismatch and entry errors
- As transaction details are already available on the portal, it reduces the chances of an audit or survey by tax authorities on your business
- The entire digitised process along with auto-populated data aids in simplifying the steps towards compliance
Steps for e-invoice and e-way bill generation
With the real-time transfer of your invoice data from the IRP (Invoice Registration Portal), e-way bill generation is now simpler.
To generate your e-way bill, log in to the IRP first and follow the following steps:
- Attach your invoices on the IRP
- Wait for the GSTN to authenticate your invoice, assign a unique identification number called IRN (Invoice Reference Number), and add a QR code to it
- Switch to the e-way bill portal to generate an e-way bill
- Fill out Part B (Part A gets auto-filled due to e-invoicing)
- Click on the ‘Submit’ button to generate your e-way bill
- Download a copy of your e-way bill in a PDF format from the portal
With the introduction of e-invoice e-way bill generation has gotten quicker, enabling you to comply with the laws with ease. This process is also playing a huge role in reducing fraud with regard to scammers generating fake invoices to dupe authorities as well as the public. What’s more, it is helping reduce issues related to reconciliation and disputes. Lastly, it brings down costs and paves the way towards boosting overall business efficiency.
Keep in mind that non-compliance in either or both cases can attract a monetary fine and/or seizure of the goods. So, comply with the generation of e-way bill, log in to the portal and fill out accurate information. This way, you can carry out business operations seamlessly and without any hassles.
