eWay Bill.
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The Importance of E-Way Bill in Goods Transportation.
What is an e-way bill?
An e-way bill, short for electronic way bill, is a digital document that plays a crucial role in tracking the movement of goods. It is particularly significant within the framework of the Goods and Services Tax (GST) system.
When is an e-way bill mandatory?
An e-way bill becomes mandatory when goods valued over Rs. 50,000 are transported by an individual or entity registered under GST. It is important to generate a GST e-way bill before the commencement of the transportation of the consignment.
Why is an e-way bill important?
An E-way bill acts as a digital compliance tool under the GST framework. It ensures that the consignor or seller provides relevant information about the goods before they are transported and generates an E-way bill on the GST portal. This document includes important details such as:
- Name of the consignor
- Name of the consignee
- Origin of the consignment
- Destination
- Proposed route
According to GST regulations, any person registered under GST who initiates the transportation of goods with a consignment value exceeding Rs. 50,000 must provide details of these goods in an E-way bill before the goods begin their journey. This requirement is mandated under Section 68 of the CGST Act and further detailed in Rule 138 of the CGST Rules, 2017.
Understanding the Key Components of E-way Bill
The e-way bill is a crucial document required for the movement of goods in India. It consists of two parts, Part A and Part B. Let’s take a closer look at each of these components:
Part A of the E-way Bill
Part A of the e-way bill involves gathering vital information about the consignment, primarily related to the invoice. The following details are required in Part A:
- GSTIN of the recipient: This is the Goods and Services Tax Identification Number of the person to whom the goods are being supplied.
- Pin code of the delivery location: This is the postal code of the place where the goods are being delivered.
- Invoice or challan number: This is the unique number associated with the invoice or challan related to the supply of goods.
- Value of the consignment: This indicates the monetary worth of the goods being transported.
- HSN code of the goods: The Harmonized System of Nomenclature code is a standardized code used to classify goods for taxation purposes. Businesses with a turnover of Rs. 5 crores or less should mention the first two digits of the HSN code, while those with a turnover above Rs. 5 crores need to provide a four-digit HSN code.
- Reason for transportation: This is chosen from a list of predefined options and indicates the purpose of transporting the goods.
- Transport document number: This could be the goods receipt number, airway bill number, railway receipt number, or any other document number associated with the transportation of goods.
Part B of the E-way Bill
Part B of the e-way bill captures the transportation specifics. This includes the vehicle number for road transport or other conveyance details for rail, air, or ship transport.
To constitute a complete e-way bill, both Part A and Part B are required. The e-way bill is obligatory for transporting goods exceeding Rs. 50,000 in value, whether within or across state lines, under the Goods and Services Tax (GST) framework.
Having a valid e-way bill ensures a smooth and hassle-free movement of goods, as it provides necessary information to the tax authorities and helps in maintaining transparency in the supply chain.
When and Why is an E-way Bill Generated?
An E-way bill is required to be generated before the dispatch of goods. It must encompass key details about the goods, including information about the consignor, recipient, and transporter. The scenarios necessitating an E-way bill include:
For Supply of Goods
Whenever goods are supplied, an E-way bill is essential. It helps in ensuring the smooth movement of goods from one place to another while complying with the necessary transport and tax regulations.
For Non-Supply Transactions
There are various situations that fall under the category of non-supply transactions, which also require the generation of an E-way bill. These situations include:
- Export/Import of Goods: When goods are being exported or imported, an E-way bill is necessary to facilitate the movement of goods across borders.
- Returning Goods: If goods are being returned to the supplier for any reason, an E-way bill is required to document the movement of these goods.
- Sending Goods for Job Work: When goods are sent to another location for job work, an E-way bill is generated to ensure compliance with the necessary regulations.
- Line Sales: In cases where there are multiple sales in a single transaction, an E-way bill is generated to track the movement of goods.
- Sales on an Approval Basis: If goods are being sent on an approval basis, an E-way bill is necessary to record the movement of these goods.
- Supply of Semi or Completely Knocked-Down Items: When semi or completely knocked-down items are supplied, an E-way bill is generated to document their movement.
- Goods Supplied for Exhibitions or Fairs: If goods are being supplied for exhibitions or fairs, an E-way bill is required to ensure compliance with transport and tax regulations.
- Goods Used for Personal Consumption: In cases where goods are being used for personal consumption, an E-way bill is generated to track their movement.
Generating an E-way bill in all these cases ensures compliance with the necessary transport and tax regulations, making the movement of goods smoother and more efficient.
Who should generate an e-way bill?
The generation of an e-way bill is required in the following scenarios for individuals or entities registered under GST:
1. Goods valued over Rs. 50,000
When goods valued over Rs. 50,000 are moved to or from a GST-registered person, both the supplier and recipient must generate the e-way bill. This rule applies if the goods in transit exceed Rs. 50,000 in value. However, even for goods valued at less than Rs. 50,000, a registered person can voluntarily generate an e-way bill.
2. Unregistered person supplying to a registered person
When an unregistered person supplies goods to someone who is registered under GST, it is the responsibility of the unregistered supplier to generate the e-way bill. In this case, the registered recipient must ensure all necessary compliance, including the generation of the e-way bill.
3. Non-generation of e-way bill by the supplier
If the supplier, who is a registered person, has failed to generate an e-way bill for the goods in transit, the onus falls on the transporter. The transporter must generate the e-way bill regardless of the value of the goods.
Note that the consignor has the option to delegate the responsibility of filling out Part-A of the e-way bill to the transporter, courier agency, or e-commerce operator.
Additionally, it is important to generate an e-way bill regardless of the consignment’s value, even if it is less than Rs. 50,000, in the following two scenarios:
1. Principal sending goods to a job worker in an inter-state transaction
When a principal sends goods to a job worker in an inter-state transaction, an e-way bill must be generated.
2. Inter-state transfer of handicraft goods by a supplier exempt from GST registration
For an inter-state transfer of handicraft goods by a supplier exempt from GST registration, the generation of an e-way bill is mandatory.
Exemptions and Situations Where E-way Bill is Not Necessary.
When it comes to the requirement for an e-way bill in India, there are certain exemptions and situations where it is not necessary. These exemptions are put in place to streamline the process and make it more convenient for businesses and individuals. Let’s take a look at some of the instances where an e-way bill is waived:
Goods Exempt from E-way Bill
There are specific goods that are exempt from the requirement of an e-way bill. These include:
- Liquefied Petroleum Gas (LPG) for household and non-domestic exempted category customers.
- Postal baggage by the Department of Posts.
- Kerosene oil distributed under the Public Distribution System.
- Precious items like natural or cultured pearls, precious metals and stones, and articles made from these (Chapter 71).
- Currency.
- Used personal and household effects.
- Coral, both unworked (0508) and worked (9601).
Customs-Related Exemptions
In addition to the goods exemptions, there are also exemptions related to customs. These exemptions include:
- Goods being moved from a customs port, airport, air cargo complex, or land customs station to an inland container depot or freight station for clearance.
- Transportation using non-motorized conveyances.
Specific Goods Exempt from E-way Bill
There are certain specific goods that are exempt from the requirement of an e-way bill. These goods include:
- Alcoholic liquor for human consumption.
- Petroleum crude.
- High-speed diesel.
- Motor spirit (petrol).
- Natural gas.
- Aviation turbine fuel.
Optional E-way Bill Generation
In some cases, the generation of an e-way bill is optional. This applies when there is no supply as per Schedule III of the act.
Additional Specific Exemptions
There are a few additional specific exemptions where an e-way bill is not necessary. These include:
- Transit cargo to and from Nepal or Bhutan.
- Goods exempt from tax under various notifications.
- Transportation by rail by the central, state government, or local authority.
- Transport by defense formations under the Ministry of Defense.
- Transport of empty cargo containers.
- Transportation of goods weighing within 20 km from the consignor’s business to the weighbridge, accompanied by a delivery challan.
These exemptions and situations where an e-way bill is not necessary provide flexibility and convenience for businesses and individuals. It is important to be aware of these exemptions to ensure compliance with the regulations while also minimizing unnecessary paperwork and processes.
Understanding the E-way Bill Mechanism and Validity Period
When it comes to the e-way bill, there is a specific validity period that is determined based on the distance the goods are being transported. This validity period is crucial to ensure the smooth movement of goods and compliance with the regulations.
For regular vehicles or standard transportation modes, the e-way bill is valid for one day for every 100 kilometers or part thereof. This means that if the distance to be covered is 250 kilometers, the e-way bill will be valid for 3 days.
However, in the case of over dimensional cargo (ODC) vehicles, the validity is different. For ODC vehicles, the e-way bill is valid for one day for every 20 kilometers or part thereof. This is due to the unique requirements and considerations involved in transporting ODC.
It is important to note that the validity period of the e-way bill expires at midnight on the last day. This means that if the e-way bill was generated on 1st January, it will be valid until midnight on 3rd January, considering a validity period of 3 days.
E-way Bill Mechanism
The e-way bill mechanism is designed to streamline the process of generating and managing e-way bills. Here is how it functions:
Registration on the Common Portal
To comply with e-way bill regulations, individuals must first register on the common GST portal. This registration process ensures that the necessary information is captured and verified for generating e-way bills.
Generation of the E-way Bill
Once registered on the common portal, individuals can generate an e-way bill. This involves providing the required details such as the invoice number, date, recipient’s details, transportation details, and more. The portal will validate the information and generate the e-way bill.
Allocation of a Unique E-way Bill Number
Upon generating the e-way bill, a unique e-way bill number (EBN) is provided. This EBN is made available to three key parties involved in the transportation process: the supplier, the recipient, and the transporter. This ensures that all parties have access to the necessary information for the smooth movement of goods.
Filing Part A of Form GST EWB-01
Part A of Form GST EWB-01 contains the details of the consignment and is filled by the party generating the e-way bill. Once Part A is filled, there is a feature on the portal that allows the other party (either the supplier, recipient, or transporter) to view the e-way bill generated against their GSTIN. This promotes transparency and facilitates better coordination.
Requirement for Acceptance or Rejection
Upon viewing the e-way bill, the party at the other end must accept or reject the consignment details specified in the e-way bill. This ensures that all parties are aware of the consignment and agree to the information provided.
Deemed Acceptance
If there is no communication of acceptance or rejection within 72 hours from the generation of the e-way bill or the time of delivery of the goods (whichever is earlier), the details are considered accepted by default. This provision helps prevent unnecessary delays and ensures the smooth movement of goods.
Everything You Need to Know About E-way Bill: Documents, Registration, Generation, and Penalties
Documents Required for Generating an E-way Bill
To generate an e-way bill, there are certain documents that are required based on the mode of transport. Let’s take a look at the documents needed for transport by road and by rail, air, or ship.
For Transport by Road
– Invoice/Bill of Supply/Challan related to the goods being transported. – Transporter ID or the vehicle number of the vehicle used for transportation.
For Transport by Rail, Air, or Ship
– Invoice, challan relevant to the consignment of goods, or bill of supply. – Transporter ID. – Transport document number and date, which are specific to the mode of transport used (rail, air, or ship).
How to Register for an E-way Bill
There are various modes available on the common portal to register for an e-way bill under the e-way bill system. These include: – SMS: Registration can be done via SMS. – Android Application: An Android app is available for e-way bill registration. – Web-based Mode: This is the primary mode for registration. – API-based: For integration with business systems. – GST Suvidha Providers: Utilizing services offered by GST Suvidha Providers. Users must initially register through the web-based system regardless of the chosen mode.
How to Generate E-way Bills
Generating e-way bills is a straightforward process through the E-way Bill (EWB) portal. The portal offers various functionalities like generating single and consolidated e-way bills, updating vehicle numbers on existing ones, and canceling them. Issuing via GSTN: The e-way bill can be created on the GSTN portal. This involves entering details about the goods, the consignor, the recipient, and the transporter. Receipt of E-way Bill Number (EBN): Once generated, an e-way bill number (EBN) is provided to the supplier, recipient, and the transporter involved in the movement of goods. SMS Option for Generating and Canceling E-way Bills: For suppliers without internet access, e-way bills can also be generated or canceled via SMS. To use this service, the supplier must first register for the SMS facility on the GSTN portal by selecting the ‘For SMS’ option under the ‘Registration’ tab. The details of the generated e-way bill are accessible on the common GST portal for the recipient. Note: The recipient must either accept or reject the e-way bill on the portal. If no action is taken within 72 hours, the e-way bill is automatically considered as ‘accepted’.
Penalties Associated with the E-way Bill
Transporting a consignment without an e-way bill attracts penalties. The individual responsible for the transportation may be penalized with either Rs. 10,000 or an amount equal to the tax evaded on the consignment, whichever is higher. It is important to ensure compliance with the e-way bill requirements to avoid such penalties.