The Goods and Services Tax Network (GSTN) has announced the implementation of three important changes to the GST portal, which affect the business of buyers, sellers and transporters equally. All of these changes are effective from January 1, 2025. Two of the changes are in respect to time limits for generation and extension of validity of E-Way Bill and one of them is about secured access to the GST portal.
Experts say that the e-waybill related changes have become important steps in GST filing because if this is not followed both the buyers and sellers and transporters will lose out. The buyer will be impacted by loss of input tax credit and disruption in business activity due to non-delivery of goods without a valid e-waybill. The seller will face a loss as the GST department will seize the goods without a valid e-waybill as per the new rules. The transporter will lose, because along with the goods the GST department will seize the vehicle of the transporter also.
Read below to know more about the changes in the GST system:
Multi-factor Authentication (MFA)
According to the advisory by GSTN, one of the key changes involves the implementation of Multi-Factor Authentication (MFA). “Currently, MFA, which requires login using a username, password, and OTP (sent to the registered mobile number, Sandes app, or similar platforms), is mandatory for taxpayers with an Annual Aggregate Turnover (AATO) exceeding Rs 100 crore since August 20, 2023, and optional for those with AATO exceeding Rs 20 crore since September 11, 2023.
a) Starting 1st January 2025, MFA will become mandatory for taxpayers with AATO exceeding Rs 20 crore, from February 1, 2025, for those with AATO exceeding Rs 5 crore, and from April 1, 2025, for all other taxpayers and users.
b) Taxpayers are encouraged to activate and start using MFA immediately, and detailed instructions are available on the E-Invoice and E-Way Bill portals. It is advised to ensure that the registered mobile number is updated with your GSTIN.”
Restriction on the period of e-waybill generation from the date of the base document
According to the advisory by GSTN, the generation of E-Way Bills will be restricted to documents dated within 180 days from the date of generation. “For instance, documents dated earlier than July 5, 2024, will not be eligible for e-waybill generation starting January 1, 2025.”
Restriction on extension of time of already generated e-waybill
GSTN said: “The extension of E-Way Bills will be limited to 360 days from their original date of generation. For example, an E-Way Bill generated on 1st January 2025 can only be extended up to 25th December 2025.Taxpayers are requested to familiarize themselves with these updates and incorporate the necessary adjustments into their compliance processes. For additional details, please visit the respective portals.”
Sandeep Sehgal, Partner-Tax, AKM Global, a tax and consulting firm, says, “This advisory restricts the extension of e-way bills (EWB) to a maximum of 360 days from the date of generation. Once this period has elapsed, the e-way bill becomes invalid, and goods cannot be legally transported under the same EWB. If transportation continues without a valid e-way bill, it may lead to penalties under GST law as per Sections 129 and 130. To comply, businesses would need to either generate a new e-way bill, if permissible, or ensure goods are transported within the valid period. This change emphasizes timely movement of goods and prevents indefinite extensions, which could otherwise lead to misuse.”
How the e-waybill system is interconnected with input tax credit of the buyer and output tax liability of the seller
Chartered Accountant Bimal Jain, founder, A2Z Taxcorp LLP explains the interlinked process of input tax credit of buyer with output tax liability of the seller:
“The first step involves the seller generating an e-invoice. Then, the seller will arrange for mechanised transportation of the goods after generating an e-waybill. Once the invoice is generated and uploaded by the seller on the invoice management system (IMS), the buyer can either accept or reject or keep it pending. If the buyer accepts the said invoice, then, he is entitled to avail the input tax credit (ITC) on purchase made by him. Correspondingly, sellers’ output tax liability gets correctly calculated if the buyer has accepted the invoice.
A crucial part of this is the e-waybill mechanism, which proves that the goods were actually transported and delivered to the buyer, and this was not a paper transaction. E-waybill is the mechanism to check the genuineness of movement of the goods. In GST, payment of tax is on an accrual basis, so it doesn’t matter when the buyer gets the goods or when he makes the payment to the seller. GST liability payment needs to be made for the month when the invoice was generated.”
Impact of these changes to the GST portal for taxpayers
Summary of the impact for buyers, sellers and transporters are as follows:
For buyers:
Chartered Accountant Ashish Karundia stated that buyers can claim an input tax credit (ITC) only if the following conditions are met:
a) they have the e-invoice or tax invoice issued by the seller,
b) the goods have been received,
c) the goods qualify for ITC,
d) the supply details are declared in the GST return of the supplier, and e) the tax on such supply has been paid to the government.
Karundia also explained that an e-waybill (EWB) helps verify the movement of goods, supporting the authenticity of the transaction. “The same can be generated by the seller, transporter, or buyer. Karundia said that sometimes technical issues with the EWB portal may cause delays in generating the EWB, but failure to generate it can result in a levy of penalties. If the EWB is not generated or if the validity expires before the delivery of the goods, the goods may be seized by tax authorities, leading to penalties on the seller and disruptions of business for the buyer. Therefore, the buyers should be mindful of this new rule restricting the time limit to generate/extend the EWB and ensure that the goods are moved with a valid EWB.”
Jain further states that since one of the conditions for getting input tax credit on goods purchased is that the goods get delivered. “In this case the importance of e-waybill is realised as this helps prove delivery of goods.”
Brijesh Gandhi, IDT Advisory, NPV & Associates LLP, says, “E-way bills are required to be carried during movement of goods along with necessary documents. Though, from a buyer’s perspective, possession of e-way bill is not a mandatory requirement to claim Input Tax Credit, section 16(2)(b) necessitates possession of goods to be eligible to claim ITC. Hence, if a buyer can substantiate possession of goods along with other applicable conditions and restrictions, ITC cannot be denied whether e-way bill is generated or not. Further, each invoice is not necessary to be followed by E-way bill, e.g. service invoice or invoice for goods already in possession of buyer as a result of any past transaction.
The given advisory restricts movement of goods beyond a specified period, i.e. 180 days from the document date and also facility to extend time limit of e-way bill (which is at present based on distance) from date of original generation of e-way bill. Any movement of goods without e-way bill or post expiry of e-way bill shall attract monetary penalties and / or detention or seizure of consignment.”
For sellers:
Abhishek Soni, c-founder, Tax2Win says, “The advisory by GSTN for GST-registered taxpayers can have both positive and negative consequences. On the positive side, it promotes improved compliance by providing clarity on GST rules, reducing filing errors, and ensuring timely adherence to tax laws. This can also help GST registered sellers avoid penalties, enhance transparency.
However, there are potential drawbacks like these complex advisories may increase the compliance burden, especially for small businesses. Adaptation to new requirements often incurs additional costs, such as software upgrades or professional services. Moreover, short implementation timelines can make it challenging for taxpayers to comply promptly.”
