Key Changes in E-Way Bill and E-Invoice Systems under GST: Multi-Factor Authentication

Implementation of Multi-Factor Authentication (MFA):

  • MFA has been mandatory for taxpayers with an Aggregate Annual Turnover (AATO) exceeding ₹100 crore since August 2023.
  • Phased Rollout for MFA:
    • From January 1, 2025: Mandatory for taxpayers with AATO exceeding ₹20 crore.
    • From February 1, 2025: Mandatory for taxpayers with AATO exceeding ₹5 crore.
    • From April 1, 2025: Mandatory for all taxpayers and users.
  • The updates enhance portal security, aligning with government guidelines and best practices.

2. Mandatory E-Invoicing for AATO:

  • E-invoicing became mandatory from August 1, 2023, for assesses with AATO exceeding ₹5 crore.
  • Legal Basis: Rule 48(4) of the CGST Rules mandates preparation and upload of invoices in FORM GST INV-01 on the Invoice Registration Portal (IRP), obtaining an Invoice Reference Number (IRN).

3. New Restrictions on E-Way Bill (EWB):

  • Effective January 1, 2025:
    • EWBs can only be generated for documents dated within 180 days from the generation date.
    • Extension of EWBs limited to 360 days from the original generation date.
  • Objective: To curb backdating/forward-dating practices and ensure compliance in goods movement.

4. Compliance and Penalties:

  • Invoices not registered on the portal are invalid for claiming input tax credit (ITC).
  • Non-compliance leads to ITC disallowance for the recipient and penalties for the supplier.

5. Operational and Compliance Advisory:

  • Taxpayers must align their processes with the upcoming MFA and EWB restrictions.
  • Enhanced compliance measures aim to minimize tax evasion, misrepresentation of inventory, and delayed GST payments.

These changes underscore the government’s focus on leveraging technology for transparency and efficiency in tax administration.