Industry bodies have urged the Finance Ministry to grant a three-month extension for implementing the Goods and Services Tax Network (GSTN) proposed changes to the e-way bill system, stating that businesses need additional time to upgrade their technology infrastructure and align their internal business processes with the new requirements.
The amendments, scheduled to come into force from August 1, mandate businesses to furnish the Goods and Services Tax Identification Number (GSTIN) of the final recipient of goods, known as the ‘Ship-to GSTIN’, in Bill-to/Ship-to transactions.
In these transactions, the invoice is raised on one party (Bill-to), and the goods are delivered to another party/location of the same party (Ship-to). GSTN has rolled out a voluntary facility to close an e-way bill after the goods have been delivered.
People who know about the discussions stated that industry associations have prompted the government to postpone the rollout by three months, claiming that e-invoices and e-way bills are real time complainces and that any such revisions need amendments to source systems, enterprise resource planning (ERP) systems, processes, extensive testing, and communication to all stakeholders. It is crucial to ensure a seamless rollout and prevent any business disruption.
Concerns were raised by industry representatives about commercial confidentiality. They mentioned that businesses, particularly those engaged in distribution, trading, contract manufacturing, and merchant exports, may not wish to reveal the GSTIN of their end customers to suppliers or transporters, as it could disclose sensitive business relationships.
Businesses pointed to practical issues in receiving the Ship-to GSTIN from customers in real time. They cautioned that if this data is not available at the time of generating an invoice, then it could delay invoicing and dispatch of goods.
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The industry has asked for clarity regarding the legal implications of the new voluntary e-way bill closure facility. Under the new feature, suppliers, receivers, transporters or authorised persons can mark an e-way bill as closed once the goods have been delivered.
Businesses inquired of the government to explain whether any revisions will be allowed after an e-way bill has been closed and whether there could be any compliance outcomes for delayed or non-closure.
The proposed e-way bill changes shall require amendment to companies’ ERP systems and customer databases, for which businesses normally require more time to prepare and test the changes.
The Goods and Services Tax Network (GSTN) must reconsider specific validations in Bill-to/Ship-to transactions where the billing and delivery locations may have the same GSTIN.
Any revision to the real-time compliance systems must be executed only after consultation with industry and adequate preparation time. A transition period of at least three to six months shall support businesses in adopting the changes seamlessly.
