Linkage of e-way bills with GST returns: Key considerations

One aspect related to e-way bills which has not been adequately understood and debated by the industry at large is the reconciliation of e-way bills generated with the data declared in GST returns.

One of the main objectives of the e-way bill provision is to curb revenue leakage. Hence, in the near future, businesses can be expected to receive notices/queries seeking explanations for discrepancies in the data reported in the GST returns vis-à-vis the e-way bill portal. Although there is currently no link between the e-way bill and GST return portals, the government has put forth certain clear expectations and the same can be anticipated based on the recent cases of notices being issued to businesses for differences in the data declared in GSTR-3B and GSTR-2A returns.

Considering the extensive quantum and nature of data declared in GSTR-1 vis-à-vis the specific instances and requirements for issuance of e-way bills, it becomes imperative for businesses to prepare themselves in advance by reconciling both the databases.

The following points need to be considered while trying to reconcile e-way bill data with GST returns:

  1. Any differences in the details populated on both the portals would need to be addressed based on back-up documentation.
  2. The requirement for issuance of e-way bills only applies to the movement of goods over and above a threshold limit, whereas the data declared in GSTR-1 includes all the supplies regardless of any threshold.
  3. There may be scenarios where e-way bills are required to be generated, such as for movement of goods on delivery challans; however, the details of such supplies are not reported in GSTR-1.
  4. There is no requirement to issue e-way bills in case of supply of services, whereas the same needs to be duly reported in GSTR-1.
  5. The varied state-specific requirements, such as different threshold limits and  notified products for which e-way bills are required, will result in further complications.
  6. The possibility of assigning roles for the issuance of e-way bills to ‘transporters’ and ‘consignees’ would make reconciliation even more cumbersome and time-consuming.
  7. The other concern, apart from the linking of data from the movement perspective, is the reconciliation of the value of supplies considering the credit notes (tax or financial) issued later by the supplier to factor the discounts, deficiency, etc. for the customer.
  8. Lastly, the possibility of the authorities linking e-way bills data with the turnover of a business as a whole cannot be ruled out.

The above discussion clearly underlines the need for businesses to start preparing themselves and simultaneously ascertain whether technological intervention is required to sync reports with the GST database.

It may be worthwhile to recall the challenges under the erstwhile VAT regime, where a mismatch between entry permits and returns data would attract the allegation of clandestine removal and allied tax demands. In order to avoid such a situation, necessary precautions have to be taken in a timely manner.

Contact us

Pratik Jain

Pratik Jain

Partner and Leader, Indirect Tax, PwC India

Tel: +91 124 3306507

Dharmesh Panchal

Dharmesh Panchal

Partner and Deputy Leader, Indirect Tax, PwC India

Tel: +91 22 6689 1455

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