INTRODUCTION
E-way Bill is an electronically generated compliance document, mandatory for 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.
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 is applicable to all registered persons, transporters and in specific cases even unregistered person.
WHEN IS AN E-WAY BILL REQUIRED
E-way Bill should be generated before 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 rupee, must at all times, carry a valid E-way bill corresponding to the consignment.
E-way bill is required for all movement of goods which may be related to 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 E-way Bill is generated, unique EBN (E-way bill number) is issued assigned and shared with 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 EBN in print or online format during movement of goods.
MODES TO GENERATE E-WAY BILL
E-way bill can be generated through 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 contents mentioned under Part B are entered, indicating that the transportation has started. Part B of 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 brakes down mid-transport, contents of Part-B may be changed.
WHY IS E-WAY BILL REQUIRED: KEY REASONS
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 movement of goods in real time
- Transparency: Ensure compliance and tax transparency
- Prevent tax evasion: It provides digital trail of transaction from origin to destination
- Wait-time: To reduce manual process and wait-time at inter-state borders
- Proof of legitimacy: Acts as proof and ensure legal documentation of goods in transit, reducing risk of fraud
WHO: NEEDS TO GENERATE AN E-WAY BILL
Following person needs to generate E-way Bill before movement of goods.
- Registered supplier,
- Recipient,
- Or transporter
MYTHS V/S REALITY: IN NORMAL COURSE OF BUSINESS
Many believe local transport is exempt from e-way bill in normal course of business, but the law requires issuance of e-way bill even within the city if value exceed the specified threshold.
- Threshold: Goods amounting up to ₹50,000 are exempt from generation of 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 Intra-state limit varies based on State GST Act.
Eg: In Madhya Pradesh E-way bill is not mandatory until 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 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 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 ₹50,000 limit still applies, meaning if the value exceeds the specified threshold value it is mandatory to generate 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 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 custom station.
- Specified Exempted goods: listed in GST rules. Some of which are:
- Perishable goods. Eg. Unprocessed vegetable, fruits, fresh milk & meat
- Currency. Jewellery, used person artifacts.
- Kerosene oil sold under PDS
- Weighbridge: Goods being transported to or from weighbridge for weighment of goods
- Specific Government transports where consignor is government entity
- Short distance: some states offer exemption to file Part-B of E-way bill if movement within 50km
- Non-GST goods
- Empty Cargo containers 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
(a) By Principal to Job-worker
(b) By Registered Job-worker back to Principal
- Inter-state transport of Handicraft goods by a Dealer exempted from GST Registration
- If specific state mandates generation of 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., E-way bill needs to be generated irrespective of the amount of consignment.
CONSEQUENCE
When found transporting goods without valid E-way bill or valid documents severe consequences may follow. Such as issuance of notices under Sec 74 of 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 penalty & appropriate tax is paid as specified by officer.
- Confiscation: Goods and vehicle may be confiscated (Section 130) if intent to evade tax is proven.
Monetary consequences are:
- Transporting goods without e-way bill: Penalty of INR 10,000 or 100% of 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 are as follows: If Owner comes forward and claims goods: They must pay 100% of Tax Payable. If owner does not claim goods: Penalty equivalent to 50% of value of goods. Or 200% of taxable valuable (whichever is higher) will be levied.
CONCLUSION
- It is therefore advisable to generate E-way Bill if invoice value exceeds 50,000 INR i.e. national threshold or specific threshold for intra-city and intra-state transportation of goods
- Issue delivery challan, if transporting goods to weighbridge for weighing of goods up to 20km. If distance is more than 20km to weighbridge issue an e-way bill
- Generate Part-A of E-way bill if transporting within city or state and value does not exceed specific state’s limit.
- Issue relevant documents if 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 CGST Act Explained