An e-way bill is an electronically generated compliance document, mandatory for the movement of goods across India. Section 68 of the CGST Act, 2017, read with Rule 138 of the CGST Rules, 2017, mandates that a registered person must generate an e-way bill (FORM GST EWB-01) for the movement of goods exceeding ₹50,000.
An e-way bill can only be generated for documents dated within 180 days from the date of generation. Meaning, Documents which are older than 180 days are ineligible for E-way bill generation. It applies to all registered persons, transporters, and, in specific cases, even unregistered persons.
When is an E-way Bill Required
An e-way Bill should be generated before the movement of goods begins. Section 68 mandates that the person in charge of a conveyance carrying any consignment of goods of value exceeding 50,000 rupees must, at all times, carry a valid E-way bill corresponding to the consignment.
An e-way bill is required for all movements of goods which may be related to the following heads:
- FOR SUPPLY OF GOODS (Sale /Barter/ Transfer with or without consideration)
- FOR REASONS OTHER THAN SUPPLY OF GOODS (Sale return/ Branch transfer)
- Inward Supply of goods from an unregistered person
EBN (E-way Bill No.)
Once the E-way Bill is generated, a unique EBN (E-way bill number) is issued, assigned, and shared with the supplier, recipient, and transporter. The validity is dependent on distance: 1 day per 200 km for regular cargo and 1 day per 20 km for ODC (Over-dimensional cargo). The validity starts from the time of generation and expires at midnight on the last day. It is necessary to carry the EBN in print or online format during the movement of goods.
Modes to Generate E-way Bill
An e-way bill can be generated through the following ways:
- Web Portal (ewaybillgst.gov.in)
- SMS (From Registered mobile no.)
- Android App (Registered taxpayer & Enrolled transporter)
- Bulk Generation via JSON file upload (for high-volume business)
- API Integration
Details to Furnish: Parts of E-way Bill at Glance
Details in an E-Way bill need to be furnished in 2 parts, namely Part A and Part B. Part A of the E-way bill contains details of the consignment. Contents of Part A are filled by the registered supplier or recipient. It records what is being moved, from whom, and to whom.
Part B of the E-way bill contains the transport details. It is filled by the transporter or supplier to indicate how the goods are moving (road, rail, air, ship) and other allied details. The e-way bill’s validity begins only after the contents mentioned under Part B are entered, indicating that the transportation has started. Part B of the E-Way bill is not required if the transport is Intra-state and the distance between the consignor/consignee and the transporter is less than 50 km. In case the transport vehicle changes or breaks down mid-transport, the contents of Part B may be changed.
Why is an E-way Bill Required: Key Reasons
An e-way bill is a mandatory electronic document required under India’s GST Law. The primary reasons for introducing the E-way bill are as follows:
- Tracking: To track the movement of goods in real time
- Transparency: Ensure compliance and tax transparency
- Prevent tax evasion: It provides a digital trail of transactions from origin to destination
- Wait-time: To reduce manual processes and wait-time at interstate borders
- Proof of legitimacy: Acts as proof and ensures legal documentation of goods in transit, reducing the risk of fraud
Who: Needs To Generate An E-way Bill
The following person needs to generate an E-way Bill before the movement of goods.
- Registered supplier,
- Recipient,
- Or transporter
Myths V/S Reality: In The Normal Course Of Business
Many believe local transport is exempt from the e-way bill in the normal course of business, but the law requires the issuance of an e-way bill even within the city if the value exceeds the specified threshold.
- Threshold: Goods amounting to up to ₹50,000 are exempt from the generation of an e-way bill. Unless otherwise specified in the act. This limit is for inter-state as well as intra-state movement of goods.
- Intra-state: Although the intra-state limit varies based on the State GST Act.
Eg: In Madhya Pradesh, the E-way bill is not mandatory until the value of goods exceeds ₹1,00,000.
In Gujarat, no e-way bill is needed for intra-city movements.
In Jammu & Kashmir, no e-way bill is required for the movement of goods within the union territory, regardless of their value.
- 50km Rule: It means that there is no need to update Part B of the e-way bill, i.e., transporter details, if goods are transported within the same state for less than 50km (from consignor to transporter or transporter to consignee).
But Part A is still mandatory to be furnished. And the ₹50,000 limit still applies, meaning if the value exceeds the specified threshold value, it is mandatory to generate an e-way bill irrespective of the distance. Each state may apply slight variations in the distance limits, so it is essential to know the state-specific E-Way Bill rules for your operations.
- Exemption for Weighment: No e-way bill is required for goods transported up to 20 km from the business place to a weighbridge, or from a weighbridge back to the business place, provided it is within the same state and accompanied by a delivery challan.
Exemptions: When E-way Bill Is Not Required
- Low value: when value of goods is less than ₹50,000 or a state-specific threshold.
- Mode of transport: Non-Motorized vehicle
- Customs controlled area: Movements under Customs supervision/ seal or from Port/ Air cargo/ ICD to another customs station.
- Specified Exempted goods: listed in the GST rules. Some of which are:
- Perishable goods. Eg, Unprocessed vegetables, fruits, fresh milk & meat
- Currency. Jewellery, used personal artifacts.
- Kerosene oil is sold under PDS
- Weighbridge: Goods being transported to or from the weighbridge for weighment of goods
- Specific Government transports where the consignor is a government entity
- Short distance: some states offer an exemption to file Part B of the E-way bill if the movement is within 50km
- Non-GST goods
- Empty Cargo containers are being transported
Important consideration: Even when an e-way bill is not required, a bill of supply or delivery challan should accompany the goods.
Exception To Exemptions
- Inter-state movement of goods
- By Principal to Job-worker
- By Registered Job-worker back to Principal
- Inter-state transport of Handicraft goods by a Dealer exempted from GST Registration
- If a specific state mandates the generation of an E-way bill. Eg, in Madhya Pradesh, for transporting tobacco products, pan masala, medicine, surgical goods, and active pharmaceutical ingredients, there is no threshold limit available on the value of consignment, i.e., an E-way bill needs to be generated irrespective of the amount of consignment.
Consequence
When found transporting goods without a valid E-way bill or valid documents, severe consequences may follow. Such as issuance of notices under Sec 74 of the CGST Act, seizure of goods and vehicles, penalties, and potential confiscation of goods. Authorities may also detain vehicles for minor errors, disrupting supply chains and causing significant delays.
Consequences can be classified into two parts for ease of understanding. Monetary or non-monetary.
Non-monetary consequences are:
- Seizure: Seizure of goods u/s 129. Released only when the penalty & appropriate tax are paid as specified by the officer.
- Confiscation: Goods and vehicles may be confiscated (Section 130) if the intent to evade tax is proven.
Monetary consequences are:
- Transporting goods without an e-way bill: Penalty of INR 10,000 or 100% of the tax sought to be evaded (whichever is higher)
- Exempted Goods: Penalty can be 2% of the cargo value or ₹25,000 (whichever is less).
- Minor error: Penalty of ₹1,000 u/s 125 r/w Sec. 126 of CGST Act and Circular No. 64/38/2018-GST
- Penalty after seizure to release goods is as follows: If the owner comes forward and claims the goods, they must pay 100% of the tax payable. If the owner does not claim the goods: Penalty equivalent to 50% of the value of the goods. Or 200% of the taxable value (whichever is higher) will be levied.
Conclusion
- It is therefore advisable to generate an E-way Bill if the invoice value exceeds 50,000 INR, i.e., the national threshold or the specific threshold for intra-city and intra-state transportation of goods
- Issue a delivery challan if transporting goods to the weighbridge for weighing of goods up to 20km. If the distance is more than 20km, the weighbridge issues an e-way bill
- Generate Part-A of the E-way bill if transporting within the city or state, and the value does not exceed the specific state’s limit.
- Issue relevant documents if the e-way bill is not mandatory, such as delivery challan, receipt, or as specified in the act for transportation of goods.
Link to similar articles: Section 75 of the CGST Act Explained
Author: Ms.Simon Jain
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