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Published on:

January 20, 2025

Viraaj Vashishth

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GST FAQs

Enhancing GST Security: Implement 2-Factor Authentication For e-Way Bill Systems

With the rise in the number of people using online goods and services, the internet’s security has become a number one priority. As a part of India’s Taxation policy, there are two key components, the e-Invoice System and E-way Bill System, that allow easy billing and transfer of goods. However, on December 17, 2024, GST announced the need for stricter security measures, including the introduction of 2FA, that come into play in January 2025. The changes aim to strengthen the compliance system for all users regardless of level of access. Moreover, the National Informatics Centre has made it mandatory to have Two-Factor Authentication for user logins to these two platforms.

What is Two-Factor Authentication (2FA)

Two-factor authentication also known as 2FA or Two-step verification is a great security feature that is being implemented in the login procedure. In normal circumstances, a user is required to confirm their account using a username and password. However, with the implementation of 2FA, an extra step is required in the authentication process where the user is asked to supply unique codes or tokens in addition to passwords. Examples of how these codes can be generated include:

1. Time-based One-Time Password (TOTP): This method uses a phone application, which creates a distinct code that changes every few seconds. Google Authenticator and Microsoft Authenticator are both famous TOTP apps. SANDES App is an official Indian authenticator app that you can also use.

2. SMS-based One-Time Password (OTP): An OTP is generated and sent to a user’s mobile phone through SMS and entered into a system to access it.

3. Security Key: Electrical security keys that generate a specific code such as a password, are used to authenticate a Bluetooth device by inserting it into a USB port or plugging it in wirelessly.

Importance of 2FA in e-Invoice and e-Way Bill Systems

The e-Invoice system and the e-Way Bill system handle sensitive financial data, including product descriptions, quantities, and values. Additionally, these systems are often used to generate and transmit tax invoices, which are crucial documents for tax compliance. 2FA for e-invoice and e-way bills significantly enhances the security of these systems by making unauthorized access considerably more difficult.

Benefit	Description
Enhanced Security	2FA is useful because it works as an additional protective measure making it extremely difficult for cyber criminals to have access to a user’s account even after being successful in hacking their password.
Reduced Fraud Risk	The use of 2FA in e-Invoice and e-Way Bill systems hinders unauthorized attempts to log in by requiring more than one authentication factor, increasing the chances of the system being compromised by fraudulent activities.
Improved Compliance	The use of 2FA is a clear indication of commitment by an organization to secure their data and depart from business norms, which can be an advantage during tax audits or evaluations.

Ways Of Setting Up 2FA

Popular Features or Options which NIC has provided for customers that wish to set up 2FA are the following:

1. OTP via SMS: A mobile one-time password is sent to the registered user's cellular device.

2. Google or Microsoft Authenticator: Applications that retrieve OTPs that are time based.

3. Biometric Authentication: The use of fingerprint or facial recognition, however this does require hardware and software integration.

Steps to Enable 2FA on the e-Invoice/e-Way Bill Portal

For better safety, users are requested to activate 2FA on NIC portals. The general sequence comprises of:

1. Opening the Portal: Opening the portal i.e; e – invoice or e – way bill with the old username or Password.

2. User Settings: Search for the security options or 2FA activation procedure.

3. Type of 2FA: Choose the kind of 2FA such as SMS OTP or Authenticator App or others.

4. The Method Setting: Set up the device by following the procedure that appears on the screen. The procedures usually want the user to use the camera to scan a QR code for authenticator apps.

5. OTP and 2FA: The final step consists of entering either the OTP that the App gets or generates with the usage of 2FA

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Tips to Handle 2FA Problems Effortlessly

Even though 2FA makes logging into accounts more secure, there are still some issues that users of 2FA need to deal with. Here are some of the common issues that 2FA users face:

Problems Users Might Face While Using 2FA

1. Loss of a Device: If a mobile registered for 2FA is lost and there is no option to use backup codes, then the user becomes locked out of all accounts.

2. Delay in Receiving OTP: As these codes are sent over the network via SMS or internet, the user might experience high loading times.

3. App Failure: When an application installed on a mobile device fails, it can disrupt the 2FA procedure.

‍You Can Also Read: What is CIF Number and Why is it Important?

Suggestions for 2FA Users

1. Update Personal and Financial Information: When accounts are registered, the user should always provide up to date and accurate contact information.

2. Backup Codes: Always store backup codes in a secure manner as they grant login access if you register them on multiple websites.

3. Choose Well-Known Authenticator Apps: The risk of 2FA apps failing to provide codes is minimized greatly if the user selects trusted apps.

Conclusion

The Two Factor Authentication adds a great layer of security to both e-Invoice systems and e-way bill systems as it is a strong deterrent for malicious actors and anyone wanting to tamper with the system. It complies with government regulations on Cyber Security. For detailed guidance on enabling 2FA, users can refer to the official NIC documentation.

FAQs

1. What is 2-Factor Authentication in e-Invoice System?

Two-Factor Authentication in e-Invoice System is a form of security measure that makes it compulsory for all users to present two forms of verification to be accessed such as entering in a password followed by a One Time Password (OTP).

2. Why is 2-Factor Authentication a must for the e-Way Bill system?

It boosts security, reduces the chances of unwarranted entry into the system and ensures e-Way bills which contain sensitive GST information are kept safe at the time of generation.

3. How do I go about enabling 2-Factor Authentication in the e-Invoice System?

All that is needed is to sign into the e-Invoice portal, go to the security settings in the menu, opt for a 2FA method such as SMS OTP or any other Authenticator App and complete the set up all the way to the end.

4. What options are there for attaining 2-Factor Authentication for the e-Way Bill system?

The options depict a combination of SMS OTP, Hub-based Authenticator and Biometric Authentication for added security.

5. Is there any user of e-Invoice System who is not required to have Two Factor Authentication activated on their end?

No, according to rules put by NIC, 2FA is required to prevent unauthorized access linear to users to all data safely.

6. Can I use Google Authenticator for security access to the e-invoicing and e-way bill portals?

As said before, I would still endorse Google Authenticator as an option for 2FA to be configured in both e-Invoice and e-Way Bill portals.

7. What steps should one take in case they lose their mobile device against which 2FA was enabled?

One can change the contact numbers on the e-invoicing system or use the offline codes given at the time of 2FA enrolment.

8. Is 2F A a mandatory requirement for both e-Invoicing and e-way bill systems?

Yes, these practices require 2FA in order to enforce business compliance and maintain secure access to the defined systems.

9. What kinds of issues could E-Way Bill Portal users run into with 2-Factor Authentication?

Most people complain that bogus OTP messages arrive late, that they cannot live without their phones, or that they cannot use the authenticator app.

10. How does a 2-Factor Authentication help businesses comply with GST regulations?

It boosts the integrity of the e-Invoicing and e-Way Bill systems and minimizes the risk of violation of laws.

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