After rolling out GST last year, Government of India introduced the e-way bill system in February 2018. While the initial endeavour to roll out the new tax collection method was not successful, it fared much better in the second attempt made in April 2018. By end of May 2018, the GST e-way bill system had been successfully implemented for inter-state movement of goods in 21 states and six Union Territories.
After effective execution of the new process in interstate goods movement, starting June 2018, GST e-way bill rule has been implemented for intra-state movement of goods throughout the country.
Why is the GST e-way bill so important?
The e-way bill system is a part of the GST regime. This system has been created with the aim to systematize logistical movement of goods in the country, improve and increase tax collection, and in turn control tax evasion.
What is an e-way bill?
The GST e-way bill is an electronic document that is required to be carried by the transporter when transporting goods worth more than INR 50,000 via a single bill/delivery challan/invoice.
What are the other benefits of the e-way bill system?
Apart from making the country’s tax structure efficient, it is also believed that GST e-way bill system will provide the following benefits to the trade:
- GST e-way bill generation system is digitized and easy-to-use. This means that traders (taxpayers)/transporters will no longer need to go to check posts to generate an e-way bill.
- Waiting time at check posts is expected to reduce with the introduction of e-way bill. This will help reduce not only transit time but also better manage road congestion and improve turn-time of vehicles. Reduced transit time will also positively impact transportation costs.
- GST e-way bill system has simplified documentation pertaining to movement of goods. Unlike earlier, where each state had different documentation demands, now the documentation required for movement of goods has been made uniform.
- Along with digitization of e-way bill generation, even the transport vehicles have been equipped with RFID devices to facilitate easy check of e-way bills. This has reduced the burden on the transporter to carry the physical copies of the e-way bills.
- GST e-way bill system has made it easy to verify and check transactions for tax purposes for both the taxpayers and the tax administration.
When should an e-way bill be generated or issued?
An e-way bill is required to be generated or issued when a consignment worth INR 50,000 is going to be transported via a single delivery challan/invoice/bill. This value can be the total of all goods transported in the vehicle or of the invoice of each shipment being transported in a vehicle. Such movement of goods can be due to reasons of supply of goods, return of goods, or purchase (inward supply) of goods.
A GST e-way bill also needs to be compulsorily generated in the following scenarios:
- Movement of goods, even if the goods being transported are less than INR 50,000, for inter-state transfer by the Principal to a job-worker or registered job worker.
- Inter-State transport of handicraft material by a trader who is exempted from GST registration.
Are any goods exempt under the e-way bill generation rule?
The movement of the following goods does not require an e-way bill:
- Perishable goods – fruits, vegetables, meat, milk and milk products
- Silver and gold jewellery
- Raw silk
- Cooking gas cylinders
Who is required to generate an e-way bill?
A registered person (trader, seller, buyer, consignor, consignee, transporter) is required to generate an e-way bill.
An unregistered person also has to register on the e-way bill generation portal. However, an unregistered user is exempt from generating an e-way bill only if he is supplying goods to a registered person. In such a scenario, the registered person will be responsible for generating an e-way bill.
Is an e-way bill required in all movement of goods?
No, there are some exceptions where an e-way bill is not required. For example, an e-way bill is not required for:
- Movement of goods under customs seal or direction
- When movement of goods is via a non-motor vehicle form of transport
- Transportation of goods under customs bond from ICD to port or one custom check point to another
- Transit cargo from Nepal or Bhutan to India
- Empty containers used for transporting cargo
- Shipments/goods transported from customs port, air cargo station/complex, airport, customs check post to ICD or CFS for customs clearance process
- Rail transportation of goods by State Government, Central Government, or any local authorities
- Goods exempt under the GST e-way bill rule by the respective State/Union Territory
- Movement of goods for/due to defence requirements with Ministry of Defence listed either as a receiver or a sender
- Seller, sender, consignor of goods transporting goods to or from his place of business to weighbridge for the purpose of weighing the cargo within a distance of 20kms. A delivery challan should be sent along with this kind of cargo movement.
- Movement of goods listed under annexure to rule 138(14), goods considered as “no supply” according to Schedule III, and specified Schedules of the Central Tax Rate notifications.
From where and how to generate an e-way bill?
It’s simple! To generate an e-way bill all you need to do is register on the e-Way Bill System portal.
Does an e-way bill have a validity period? What is the validity period?
Yes, e-way bills have a validity period. It is based on the distance that the goods are transported. The validity period starts from the date and time of generation of an e-way bill.
What are the documents required for generating an e-way bill?
The following documents are required for generating an e-way bill:
- For transportation by road the transporter ID or vehicle number is required
- For transportation by rail, air, or sea, the transporter ID, transport document number, and the date of the document is required
- Bill of Supply, challan, or invoice pertaining to the goods being transported
For more information on the GST E-way Bill system, processes, and how to generate an E-way Bill visit Goods and Services Tax e-Way Bill System Portal.