E-Way Bill - Ultimate Guide for SMEs About E-Way Bill Rules | TranZact

Sep 16, 2021 in Documents



With the implementation of the concept of GST, hopes towards a simple taxation system were building up. And the E-way bill implementation is making further addition to this drive. E-way bill making transportation of goods from one state to another or within one state (intra-state) much more comfortable. It is doing so by minimizing the compliances which the governments were exercising in the earlier tax regime. All this is going on because of the E-Way Bill rules and now with its new integration of the FasTag and RFID. Through this up-gradation, the E-Way Bill system can receive real-time details of commercial vehicle movements on the highways and the tolls they are crossing.

What is an E-Way Bill?

E-Way Bill is an Electronic Way Bill document introduced by the GST system to evidence the movement of goods.  The government's E-way Bill Portal generates the E-way Bill document. This E-way Bill generation is compulsory for all taxable goods whose invoice value is more than Rs.50,000. The E-way bill is required for all GST registered persons if their invoice value exceeds the limit. And the transportation of goods is happening within (intra-state) or outside (inter-state) the state.

E-Way Bill

The purpose of the E-Way Bill is to generate a Unique E-way Bill Number (EBN) that all the parties (supplier/transporter/recipient) involved in the transaction have. And through that authorities, can ensure that this movement of goods complies with the GST Law. Further, this E-way Bill mechanism is an effective tool to track the transportation of goods and check tax evasion.

E-way Bill Rules - Who should generate it?

According to Rule 138 of the CGST Rules, 2017, the E-way Bill generation takes place when transportation of goods price more than Rs.50,000 is to be done through any conveyance method. And this transportation is happening because of Sale of goods, branch transfers, or any other reasons.

So the consignor or the consignee who can be registered or unregistered persons have to create E-way Bills. If the movement of goods is done through their own/hired vehicle or by railways, airways, waterways methods. In the case of transportation by the road with the help of Transporters, then Transporter only has to generate it or part of it.

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E-way Bill Rules - Validity of E-Way Bill

The question which many people are searching for is the validity of E-way Bills or what is the distance limit of E-way Bills. So to clarify the distance limits, the E-way Bill is mandatory for even 1-kilometer movement. But there is a relaxation for the distance less than 50 kilometers. That only the Part A of the E-Way Bill has to be filled.

Now coming to the validity of E-Way Bills, it means for what period is the particular E-Way Billis valid to use. The validity depends on the distance of the destination of goods transported. And the calculation of the validity period depends on the date and time of generation of the E-way bill.

For a distance less than 100 kilometers, the E-Way Bill is valid for 1 day only. Additionally, whenever the distance increases by 100 Kms or part-off, the addition of 1 day goes on to the earlier validity period.

DistanceValidity Period
D<100 Kms.1 Day.
Addition of every 100 Kms.
or part-off.
1-Day addition to the original validity period.

If the validity period of the E-Way Bill is coming to expire and the goods are still on the way. Then the Transporter can generate another E-Way Bill by updating the details in Part B of FORM GST EWB-01.

E-Way Bill Components

e-way bill system and important fields

The E-Way Bill has two components which are Part A and Part B. The Part A of Form GSTR EWB-01 is filled by the consignor or consignee, who must be a registered person. And for the Part B of Form GSTR EWB-01, the Transporter fills the detail. But the situation changes when the suppliers or buyers own/hire vehicles to get used, then either of the two files Part B.

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How to Generate an E-Way Bill

e-Way Bill Portal

According to the E-Way Bill Rules, the concerned parties can generate the E-Way using the GST Portal. There are two methods by which they can fill the details required in Part A and Part B of GSTR EWB-01. By entering the details manually on the portal or by using the JSON file, which has the Tax Invoice details of the goods whose transportation is in process.

How TranZact helps SMEs with E-Way Bills.

TranZact is a digital transformation tool and platform for SMEs to digitize business processes right, from customer inquiry to dispatch. It helps its customers with their E-Way Bill needs by providing them the option of creating the JSON files immediately when they prepare Tax Invoices. And the users can directly use the JSON file, and after matching all the details, upload it on the E-Way Bill portal.

TranZact also helps its users in calculating the distance part for determining the validity of E-Way Bills. Further, it helps in communicating with the other parties involved in the transaction. By providing them with the E-Way Bill details along with the Invoices. And making the verification process easy.

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TranZact is a team of IIT & IIM graduates who have developed a GST compliant, cloud-based, inventory management software for SME manufacturers. It digitizes your entire business operations, right from customer inquiry to dispatch. This also streamlines your Inventory, Purchase, Sales & Quotation management processes in a hassle-free user-friendly manner. The software is free to signup and gets implemented within a week.