E-Way Bill, E-Invoicing, and GST

Published on :January 7th, 2021

Publisher : Akshay Lothe

E-Way bill, E-Invoicing, & GST are some of the terms which you will see if you research on taxes and transportation of goods. However, many people are unaware of these terms, and whenever you search for these terms the results provides legal and complex technical terms which are incomprehensible. Here in this article, every term will be explained in a comprehensive language in order for normal people to grasp the article and the concept of e-Way bill, E-Invoicing, & GST.

What is e-Way Billing?

A bill in electronic form is know as e-Way bill. It is a document which is electronically generated for the sole purpose of transportation of goods by motor means from one point to another point. The source and destination for transportation of goods can be interstate or intrastate depending on the goods and transporter & receiver. The goods whose value is more than INR 50,000 should require to generate a e-Way bill for transportation of goods and commodities. When e-Way bill is generated, the system assigns a unique number to the bill known as EBN i.e e-Way Bill Number that is available to supplier, recipient, and transporter.

Who requires e-Way Bill?

The e-Way bill is required both by GST registered person as well as GST unregistered person.

For GST registered person:

When the GST registered person engenders movement of goods/commodities, either by road, rails, air or by ship, and the shipment is more than INR 50,000 then the GST registered person or recipient has to generate e-Way bill on the common portal.

When GST registered person handovers the transportation of goods/commodities for transportation by road, and GST registered person does not generate the e-Way bill on the portal, then the transporter has to generate e-Way bill on the common portal by furnishing the information from registered person.

For GST unregistered person:

When an GST unregistered person transports or handover the transportation of goods/commodities worth or aggregating more than INR 50,000 then unregistered person or transporter must generate the e-Way Bill on common portal.

When GST unregistered person transports the goods to GST registered person and the GST registered person is known to GST unregistered person, then it will be considered that the transportation of goods/commodities is done by GST registered person. In such cases, registered person or transporter must generate e-Way bill on the common portal.

However if multiple goods/commodities are transported in same shipment, then it is the obligation of transporter to generate One e-Way bill through common portal listing the serial number of each individually generated e-Way bill per consignment.

Pin to Pin distance

Pin to pin distance is the distance between two pin codes. The pin to pin distance is important while generating e-way bill as it helps in calculating the exact distance between two points so precisely generate e-way bill. Pin to pin distance can be calculated online on the GST portal.

How to calculate pin to pin distance?

Pin to pin distance can be calculated by visiting common portal and entering the source pin code and destination pin code. After clicking calculate, the exact distance in Kilometers is calculated.

Exceptions for e-Way Bill

Exceptions for e-Way bill includes when the bill is not required to generated. There are some conditions which are listed below where e-Way bill can be avoided:

When the value of goods/commodities is less than INR 50,000. However some goods/commodities require e-Way bill even if value is less than INR 50,000.

When non-motor vehicle is used as mode of transportation.

When goods/commodities are transported from port/ airport/ cargo complex to inland warehouses or depots or Container Freight Station for custom clearance.

Certain goods are excepted for e-Way bill.

Within same state and distance is less than 10 KM, for e.g from business place to warehouse or transporter.

What is e-Invoicing?

Electronic invoices mechanism is a mandatory requirement under GST i.e Goods and Service Tax. E-invoicing is necessary for the businesses which has yearly turnover exceeding INR 100 crore. Earlier the limit was INR 500 crore, but these turnover limits has been revised to INR 100 crore from January 01, 2021. The e-Invoices are authenticated using GSTN i.e Goods and Service Tax Number. Furthermore, Invoice Registration Portal (IRP) issues a unique number to invoices called Invoice Reference Number (IRN). E-Invoicing is required for all the B2B businesses.

Why e-Invoices are required?

Earlier when invoices were generated, many people used fake invoices to avoid tax and commit fraud, which was a major issue for the government. Mechanism of e-Invoicing was proposed in order to put an end to these practices by mandating the e-Invoices from government portal.

Key benefits of e-Invoicing:

All the invoicing details for GST filing required only once.

Elimination of invoice mismatching during reconciliation.

Standard invoices faced issue of interoperability due to multiple software.

Invoices can tracked in real-time.

E-Invoice generation

Invoice can be created by proper accounting or billing software which should be according to the format of e-Invoicing. Using standard hash-generation algorithm, unique invoice number which is Invoice Reference Number can be generated by supplier. The Invoice Registration Portal will validate the Invoice Reference Number and authenticate the file against central registry of GST to avoid any duplication. After successful verification, the invoice will be updated with IRP’s digital signature and QR code will be added on JSON file. Furthermore, the uploaded data will be shared with E-way bill and GST system.

GST (Goods and Service Tax)

GST stands for Goods and Service Tax. The implementation of GST has led to removal of various other taxes. GST is an indirect tax which has replaced excise duty, VAT, service tax, etc. GST is levied on the supply of goods and services. Earlier, VAT has to be levied at every stage of procurement, but after the introduction of GST, this is completely avoided.

ERP for GST

GST implementation has brought various changes to business software. Businesses had hard time transitioning from previous tax system to GST systems. Many businesses has transitioned into GST system were way ahead of others who struggled to implement the new system. ERP software for GST facilitates the automatic calculation of the GST levied on goods and services. This saves businesses a lot of time, which generating proper and accurate invoices.

GST calculation in ERP software is not a simple task. Chart accounts, Master data information, Tax rule engine, and reporting and workflow has to be updated. This includes data migration which affects master data and transaction data. Lighthouse ERP for GST is an absolute solution to tackle GST calculation problem. Lighthouse GST comes with a module which automatically calculates the GST according to proper guidelines, and applies it on the generated bills. This gives the businesses an advantage to stay ahead and avoid errors in billing and invoicing.

Conclusion

E-way bill, e-Invoicing, and GST are important in today’s world of business as it has been made mandatory by government. So in order to stay ahead in business, a proper ERP software is required to cater to all the needs of current business scenarios and requirements.