Industry seeks 3-month extension for GST e-way bill changes from August 1

Trade bodies urge the finance ministry to defer GSTN's e-way bill changes, citing technology upgrades, testing needs and concerns over commercial confidentiality

Industry bodies have urged the finance ministry to defer by three months the implementation of changes to the goods and services tax network’s (GSTN’s) e-way bill system, saying businesses need more time to upgrade technology systems and processes, according to people familiar with the matter.

 

The changes, scheduled to take effect from August 1, require businesses to mandatorily provide the goods and services tax identification number (GSTIN) of the final recipient of goods, or the ‘Ship-to GSTIN’, in Bill-to/Ship-to transactions. In such transactions, the invoice is raised on one party (Bill-to), while the goods are delivered to another party or location of the same party (Ship-to). GSTN has also introduced a voluntary facility to close an e-way bill after goods have been delivered.

 

People aware of the discussions said industry associations have sought a three-month deferment, arguing that changes to the e-invoice and e-way bill systems, which operate in real time, require modifications to source systems, enterprise resource planning (ERP) systems, business processes, extensive testing and communication with stakeholders. They said additional time was needed to ensure a smooth rollout and avoid disruption to business operations.

 

Industry representatives have also raised concerns over commercial confidentiality, saying businesses, particularly those engaged in distribution, trading, contract manufacturing and merchant exports, may not want to disclose the GSTIN of their end customers to suppliers or transporters as it could expose sensitive business relationships.

 

Businesses have also flagged practical challenges in obtaining the Ship-to GSTIN from customers in real time. They warned that if the information is unavailable while generating an invoice, it could delay invoicing as well as the dispatch of goods.

 

Industry has also sought clarity on the legal implications of the voluntary e-way bill closure facility. Under the new feature, suppliers, recipients, transporters or authorised persons can voluntarily mark an e-way bill as closed once goods have been delivered. Businesses have sought clarification on whether any changes would be permitted after an e-way bill is closed and whether delayed or non-closure could have compliance implications.

 

Prashanth Agarwal, partner, PwC India, said the proposed changes would require companies to modify their ERP systems and customer databases, for which businesses generally need more time to prepare and test.

 

“...the GSTN should reconsider certain validations, particularly in Bill-to/Ship-to transactions where the billing and delivery locations may have the same GSTIN. Any changes to real-time compliance systems should be implemented only after adequate consultation with industry and sufficient preparation time. A transition period of at least three to six months would help businesses adopt the changes smoothly,” he said.

 

On the voluntary e-way bill closure facility, Agarwal said it reflected the government's focus on collecting data on the actual delivery of goods. “Companies should start strengthening their processes now, as the requirement could become mandatory in the future,” he added.