Authorities in charge of the Goods and Services Tax (GST) have abandoned their intention to stop the creation of goods transportation permits, or "e-way bills," for businesses that don't use approved portals to generate "e-invoices" for their wholesale transactions starting on March 1. These portals help you capture data more accurately utilizing a uniform invoice across multiple tax forms.




This choice was probably made in response to the challenges small and medium-sized firms, in particular, have when creating electronic invoices. These challenges include more administrative labor and the requirement for technology advancements.



E-invoices encourage tax compliance since they can be read by many software programs and remove the need for data entry. To improve the control of economic activity, they automatically update transaction data in other tax papers such as GST returns and e-way bills. 

To increase tax compliance, the original goal was to refuse transportation permits to companies that were not sending e-invoices for business-to-business transactions. The GST regime's increased reporting requirements support the formalization and tax compliance of the economy.

In an update, the National Informatics Centre (NIC), which is in charge of managing certain GST reporting portals and is housed under the ministry of electronics and information technology, stated that the plan to prevent the generation of e-way bills without an e-invoice has been postponed. However, it did not provide a new date for when it might be implemented again.


E-invoicing used to be required for companies with sales over ₹ 500 crore, but it is currently applicable to companies with yearly sales over ₹ 5 crore. Retail sales to end users are not necessary.

Tax experts point out that there are advantages and disadvantages to tying e-way bill generation to e-invoice details. 

By coordinating invoice and transportation data, Rajat Mohan, senior partner of AMRG & Associates, stated that it might decrease tax evasion and increase tax compliance. On the other hand, it can result in more administrative work, especially for small and medium-sized businesses that have to pay for technological updates and compliance fees. 


Errors in compliance and disruptions could result from the transfer. Despite the program's goal of streamlining tax procedures, companies must adjust to a changing tax landscape and handle possible mistakes. Businesses are awaiting clarification on the altered implementation date, according to Mohan, but the government's move to withdraw the idea highlights the difficulties encountered.


GST has greatly increased revenue since it was implemented in July 2017. As of right now, monthly collections average ₹1.66 trillion, almost twice as much as they were during the first GST year. This surge in indirect tax compliance has also generated an increase in direct tax collections, making the under-reporting of sales more difficult.