Tax planner concerns: The compulsory association of e-invoices with e-way bills, set to be implemented from March 1 for specific transactions, is anticipated to cause operational disruptions and has led to confusion amongst tax planners, according to experts. The decision to enforce this linkage was prompted by discrepancies observed in e-way bills and e-invoice statements in various instances. The National Informatics Centre (NIC), overseeing the indirect tax portal, issued an advisory stating that the generation of e-way bills for B2B and B2E transactions would be blocked without e-invoice/IRN details.

Rajarshi Dasgupta, Head Tax at Aquilaw, expressed concerns over the technical challenges faced by exporters with turnovers exceeding Rs 5 crore, citing the absence of a time limit relaxation for e-invoice generation. He raised questions about handling multiple containers within a single consignment and capturing shipping bill numbers in e-invoices, which he deemed a future activity.

Regulation impact

The updated regulations are expected to escalate the compliance burden on business owners, with Apurva Agarwal, Director of Lexportex India, noting the frequent changes in the system and the corresponding demands on business owners for compliance.

E-way bills, essential for goods transportation, include details like consignor and consignee names, transporter information, and the origin and destination points of goods movement. The e-invoice system is designed to seamlessly integrate with the e-way bill system, automatically generating bills if transportation details are included during e-invoice generation. However, discrepancies arise when some taxpayers generate e-way bills without linking them to e-invoices for B2B and B2E transactions.

E-way bill restrictions

To address these discrepancies, starting March 1, the generation of e-way bills without e-invoice details will be prohibited for e-invoice-enabled taxpayers and transactions related to B2B and exports. Transactions unrelated to B2B and B2E, such as B2C and non-supplies, will continue to generate e-way bills without changes.

Indirect Tax Consultant Vedika Agarwal emphasised the mandatory inclusion of Harmonised System of Nomenclature (HSN) codes in e-way bills from February 1. Taxpayers with an annual turnover exceeding Rs 5 crore must provide at least a 6-digit HSN code, while those with turnovers below Rs 5 crore need to supply at least a 4-digit HSN code. This requirement will be enforced in the e-way bill system starting February 1, and taxpayers are advised to update their systems for compliance. Agarwal anticipated that detailed clarifications addressing queries would be issued soon.

(With PTI Inputs)