Understanding the NIC's Blocking and Subsequent Withdrawal of Blocking on E-Way Bill Generation

Introduction to Blocking:

• On 5th January 2024, the National Informatics Centre (NIC) announced the blocking of e-Way Bill generation without e-Invoice/IRN details for B2B and B2E transactions for e-invoice enabled taxpayers.

• To comprehend the withdrawal of this blocking, it's essential to first understand what the blocking entailed.

E-Invoice Applicability Basics:

• E-Invoice has been operational since October 2020 for taxpayers with an Annual Aggregate Turn Over (AATO) above Rs. 500 Crores.

• The system has been gradually extended to include taxpayers with AATO above Rs. 5 Crores.

Routine Practice of Taxpayers:

• Since its inception, e-Invoice has been seamlessly integrated with the e-Way bill system.

• e-Way bills are typically generated in conjunction with the e-Invoice.

• When transportation details are included in e-Invoice generation, an e-Waybill is automatically generated.

• Most taxpayers generate e-invoices along with e-way bills.

Exceptions to General Practice:

• Some taxpayers, eligible for e-Invoicing, have been found to generate e-Waybills without linking them with e-Invoices, particularly in B2B and B2E transactions.

• This leads to mismatches in certain parameters between the separately entered invoice details under e-Waybill and e-Invoice.

Reason for Blocking Advisory:

• To mitigate these mismatch situations, the NIC decided to block e-Waybill generation without e-Invoice details starting from 1st March 2024.

• This measure was applicable to e-invoice enabled taxpayers, specifically for B2B and export transactions. EWBs for other transactions like B2C and non-supplies were to continue as usual.

Withdrawal of the Decision:

• Despite the initial announcement, this decision was withdrawn by the NIC on 10th January 2024.

• No further details were provided regarding the withdrawal.

Our Recommendation:

• Ideally, both e-invoice and e-way bill should be generated together to avoid any discrepancies.

• The e-invoice is mandatory for B2B transactions and exports where the AATO exceeds Rs. 5 crore.

• Currently, there are no implications if an e-way bill is generated without IRN details.

• If the NIC's original advisory from 5th January 2024 had been implemented from 1st March 2024, it could have led to the blocking of e-way bill generation without an e-invoice.

• However, following the advisory's withdrawal, taxpayers can continue to generate e-way bills without IRN details until further notice from the NIC, though it is best practice to generate both documents simultaneously for data consistency.

Disclaimer: The news articles and knowledge updates related to law, business, and finance published by us are intended to provide general information and basic understanding only and are not substitute for any professional or legal advice. By accessing and using the news articles and knowledge updates on our website, you acknowledge and agree to the terms of this disclaimer. We reserve the right to modify or update this disclaimer at any time without prior notice.