An e-way bill is an electronic document that is required for the movement of goods worth more than INR 50,000 within India. The e-way bill system, which was introduced by Indian government in 2018, is designed to help businesses comply with the country's tax laws and streamline the transportation of goods. In this blog, we will discuss what is e-way bill system, how it works, and the benefits it provides for businesses and the government. We will also cover the various ways in which e-way bills can be generated, and provide tips and best practices for businesses to ensure compliance with the system.
What Is an E-Way Bill?
An E-Way bill or an Electronic-Way Bill, is an electronically issued document that permits the movement of goods and is used to track consignments in transit. As per Indian regulations, a GST-registered person cannot transport goods within or outside of the state if the value of such goods exceeds Rs. 50,000 without a duly generated e-way bill.
The document allows all parties, including the receiver, sender, and transporter, to track the status of the consignment with the help of an E-Way Bill Number (EBN) allocated to them during the generation of the e-way bill.
When Should An E-Way Bill Be Issued?
An e-way bill registration is usually done whenever there is a movement of goods valued at higher than INR 50,000. This transaction could be related to supply, inward supply, and other related reasons, such as the return of the consignment.
However, the regulations of India do define that the term 'supply' shall fall into the following three categories:
- Supply made in exchange for consideration in the course of regular business.
- Supply made in exchange for a consideration not specifically in the course of regular business.
- Supply made in the absence of consideration.
Also, it is important to note that if transportation of a handicraft goods consignment is taking place inter-state by a dealer exempted from GST, then you must generate an e-way bill even if the value of the goods does not exceed the INR 50,000 mark.
One can also avoid filling part-B of the e-way bill requirement wherein the distance that has to be covered by the consignment is less than 50 kms, and the transaction is taking place inter-city.
Who Should Generate an E-Way Bill?
Generating an e-way bill is a liability on the part of the parties involved in such a transaction where the consignment value crosses Rs. 50,000. However, the primary responsibility of doing so is of the person supplying such goods, i.e., the consignor.
One of the core benefits of the e-way bill is to enable effective implementation of GST laws in the country. It also intends to simplify tracking of movement of goods, while holding those liable for trying to evade tax liabilities.
In cases where the consignor is not GST registered, the responsibility of e-way bill falls on the receiver, also known as the consignee. If both parties fail to raise the bill, the duty to generate the e-way bill is of the transporter carrying them.
Note that where a principal sends the consignment to a job worker, and both parties are living in different states. In such cases, irrespective of the cumulative amount of the transaction, the liability of generating an e-way bill falls on the principle.
Also, when the consignment is of handicraft goods transported from one state to another, by a person exempted from GST-registration, an e-way bill will be created by the sender only, irrespective of the total value of such consignment.
An e-way bill format usually consists of the GSTIN number of the receiver, location of the delivery, date of issuance of the bill, value of goods, and reasons for transportation.
A frequently raised query by people is: What happens if the movement of goods is not for supply reasons?
In cases where the movement of goods does not fall under supply, the movement of such a consignment can fall into the following categories:
- Import/ export
- Semi Knocked Down (SKD) goods/ Completely Knocked Down (CKD) goods
- Line sales
- Sales return
- Exhibitions and fairs
In these cases, the generation of an e-way bill is mandated, and you cannot ignore the same.
Rare exceptions of a single consignment transported to the destination via multiple vehicles can happen due to unforeseen exigencies. In such cases, before the consignment is loaded on the second vehicle and before further movement of goods, the transporter must update the details of such conveyance on the e-way bill portal by filling up the form GST EWB- 01.
In such cases, the transporter should be able to produce essential documents like invoice, bill of supply, and challan along with a copy of the e-way bill format to the commissioner if and when verification is done.
When an E-Way Bill Is Not Required?
There are several clauses to the GST regulation that does not mandate the issuance of e-way bills. Following are the situations where a person can indulge in a transaction without an e-way bill as per the provisions of rule 138 (14) of the Central Goods and Services Tax Act:
- Where such a transaction is not taking place via a motor vehicle.
- Goods that are transported to an Inland Container Depot (ICD) for getting customs clearance are excluded.
- Consignments that are transported under the supervision and seal of customs.
- The consignment has been transported under a Customs Bond.
- Movement of goods regulated by defense formation.
- Transportation of empty containers of cargo.
- Wherein such transportation is done by the government via rail.
- Where the total value of the consignment is less than Rs. 50,000.
- Where such a consignment is transported for a short distance of no more than 20 Kms for weighment purposes. However, in this case, also a delivery challan is mandated.
- Under the circumstances specified in the annexure to Rule 138 of the GST Rules, 2017.
- Generation of an e-way is also exempted in the following cases:
- Where LPG is being transported for domestic supply.
- Transportation is carried on by the Department of Post for the movement of postal baggage.
State-wise E-Way Bill Rules and Limits
The impact of the e-Way bill system has been significant and has remarkably increased the efficiency of goods movement. Since all states and territories have to necessarily follow these norms, it has created a positive impact on overall taxation regulations in the country.
The states, however, are at liberty to make provisions to provide leniency in the entire process further. Tamil Nadu, for example, has increased the 50,000 mark to 1 Lakh INR. Similarly, Bihar and Delhi have also increased the threshold to 1 Lakh.
There are certain state-specific exceptions like, during transportation of goods within the territory of Jammu & Kashmir, one will not require an e-way bill. Jammu & Kashmir is exempted from the states that demand this necessity.
How To Generate an E-Way Bill On Portal?
Since the generation of an e-way bill has become necessary to engage in the transportation of high-value goods, the government has made it easier to generate one. Read the following to know about detailed steps involved in this process:
Step 1: Visit E-way bill portal and login into the portal to access the platform.
Step 2: Click on the 'Generate New' tab on the E-Way Bill's main menu.
Step 3: A new form will appear on your screen. Fill in all the necessary information, like the details of the receiver and sender, along with their GSTIN number.
Step 4: Fill in all the required fields on the second page regarding the goods and the consignment.
Step 5: Click on ‘Submit' and generate the bill.
Alternatively, to register as a GST-compliant person for the GST e-way bill generation system, you must first register on the E-Way Bill (EWB) portal. Refer to the following steps to know this process:
Step 1: On the e-way bill portal, click on the 'E-Way Bill Registration' located near the registration option.
Step 2: Fill in the form details and click submit.
Step 3: Again, fill in the required fields such as Applicant Name, Trade name, Address, etc.
Step 4: Finally, click on 'Verify OTP' for final validation.
Ensure that you are aware of your GSTIN and mobile number registered with the GST system. Once this process is completed, you will be required to create a username and password for yourself, via which you can generate e-way bills by following the steps mentioned earlier.
Also, those transporters not registered in the GST system must first enroll by providing the necessary business details.
Once the provided information is duly authenticated, the system provides the transporter with a transporter ID and credentials. Any transporter willing to register can do the same on the e-way bill portal by selecting the 'enrollment for transporters' option.
Those who fail to comply with the e-way bill's provisions, as mentioned by Rule 138 of the CGST Rules, 2017, will have to pay the penalties for such non-conformance. As per Section 122 of the Central Goods and Services Tax Act, 2017, a taxable person who is engaged in any such transaction, and fails to take the cover of essential documents like an e-way bill shall be liable to pay Rs. 10,000 in a penalty or the tax thus evaded.
During the transportation of a consignment, if such a consignment is either stored or transported by contravening the provisions of the CGST Act, 2017, the consignment, along with the conveyance, is liable for detention.
E-Way Bill Generation on Mobile via SMS
You can either follow the process mentioned above and generate an e-way bill or do the same via SMS. The second option is more convenient and better for individuals who deal in limited transactions.
To successfully generate an e-way bill via SMS, ensure that your mobile number is registered with the portal. You must check the box that says 'SMS' to enable this facility.
Once the mobile number is registered successfully, you should be able to generate an e-way bill without any more processes.
E-Way Bill Validity
The validity of an e-way bill depends mainly on the distance that has to be covered by the consignment and the time. For instance, if the distance of the consignment can be covered easily in a single day, then the e-way bill validity lasts for a single day only. However, in cases where transportation might take longer, the bill's validity is kept accordingly.
To help in understanding, an e-way bill will be valid for a single day where the distance to be covered is less than 200 Km. The bill's validity will extend for anything over that distance for another day.
What Are the Documents and Details Required for an E-Way Bill?
To generate an e-way bill via the portal or SMS service, you will need the following documents with you:
- Invoice of the transactions
- The ID of the transporter
- The vehicle number
E-Way Bill Format
An e-way bill incorporates two significant parts:
Form EWB 01 requires you to fill in all relevant details regarding the consignment, such as the invoice and the nature of the goods being transported.
To accurately fill out the form, you must have the following information with you:
- The GSTIN number of the recipient of the consignment.
- The place of delivery of the shipment, along with the pin code.
- The challan number along with the invoices to prove the value of goods.
- You must also provide the Harmonized System of Nomenclature Code (HSN Code) of the goods being transported.
- The reason for transportation along with the document number of the transport.
This is the Part B of Form EWB 01; this section includes details regarding the conveyance which has to be provided by the transporter.
Automate the E-Way Bills Process With TranZact!
Manually raising all e-way bills for every consignment or figuring out how to cancel an e-way bill can be time-consuming. The good thing is that you can automate e-way bill generation and e-way bill cancellation with the help of TranZact.
Along with this, TranZact also provides creation and automation of several other GST compliant documentation and invoicing requirements that one might need in a regular manufacturing business process. It can also assist you with e-invoicing requirements, simplifying these processes for your internal teams.
TranZact’s business automation tools help you to calculate the distance and validity of an e-way bill along with other important information that is a part of this transaction, which makes this process very easy and seamless.
FAQs on E-way Bill
Why an e-way Bill is required?
As per Rule 138 of CGST Rules, 2017, an e-way bill is required whenever a consignment carrying goods valued at more than Rs. 50,000 is transported within or outside the state. It is a mechanism that allows one to track consignments in real-time and check for instances of tax evasion.
Is e-way bill mandatory?
Processing an e-way bill is not a mandate unless the value of the goods that are being transported doesn’t exceed the Rs. 50,000 mark. There are additional exceptions to this.
What is the minimum distance mandate for an e-way bill?
The minimum distance for generation of an e-way bill is 1 Km. This is mandated when intra-state supply is taking place, and such consignment is planned to reach directly to the consignee, and the value of goods exceeds Rs. 50,000.
What is the process to extend the validity of an e-way bill?
To extend the validity of an e-way bill, one has to fill Part B of Form GST EWB- 01 and update the transportation details as required. However, it is to be noted that you can only do it 8 hours before the expiry of the E-Way Bill (EWB).
What are the benefits of an e-way bill?
The purpose of an e-way bill is to simplify movement of goods within states and across states. An e-way bill reduces duplicacy and repeated entries of invoices. This mechanism helps to reduce documentation redundancies and creates a seamless process that minimizes inefficiencies in the process of goods movement.
Is it permissible to add two invoices in one e-way bill?
The regulations prohibit clubbing multiple invoices for the generation of a single EWB. However, you can generate a consolidated EWB once all invoices are uploaded separately, and the consignment is in one vehicle. This is to ensure the INR 50,000 mark is not contradicted.
Can you edit or modify an e-way bill?
You can only edit the vehicle details once the e-way bill has been generated. Apart from this, no other modifications can be made.
How to check e-way bill validity?
Once generated, an EWB is valid for a certain period depending upon the distance that has to be covered. As per the revised regulations:
For normal cargo: An EWB is valid for a day when the distance that has to be covered is up to 200 kms. Thus for every 200 kms, one additional day is provided to complete the transaction.
For over-dimensional cargo: An EWB is valid for a day when the distance that has to be covered is up to 20 kms. Thus for every 20 kms, one additional day is provided to complete the transaction.
How can one generate an e-way bill for the purpose of a purchase return?
To generate an EWB for a purchase return, you must follow the same steps as you would to generate a normal EWB. Except here, you will select the transaction type as ‘Inward.’
How to unblock an e-way bill?
To unblock your e-way bill, you must fill the Return 3B in the common portal of GST. Once verified, the status will automatically change on the E-Way bill system.