Introduction to E-Way Bills in India
As per Indian regulations, the movement of goods valued over ₹50,000 requires an e-way bill, a mandatory document. In this discussion, we will delve into the benefits of e-way bills, their applicability, the generation process, and associated procedures.
Effective April 1, 2018, e-way bills are mandatory for both interstate and intrastate movement of goods. The primary objective of e-way bills is to facilitate seamless goods movement across India, eliminating the need for check posts.
Advantages of E-Way Bills
The implementation of e-way bills offers several benefits, including:
- Elimination of State Boundary Check Posts: Reducing transit times and increasing efficiency.
- Faster Movement of Goods: Resulting in lower logistics costs and improved supply chain management.
- Increased Turnaround Time of Trucks: Enabling trucks to make more trips and transport goods more quickly.
According to Rule 138 of the CGST Rules, 2017, specific information must be furnished prior to the commencement of goods movement, followed by the generation of an e-way bill.
Applicability of E-Way Bill
The e-way bill is applicable to every registered person who initiates the movement of goods with a consignment value exceeding ₹50,000 in the following scenarios:
- In relation to a supply.
- For reasons other than supply.
- Due to inward supply from an unregistered person.
Additionally, if an unregistered supplier provides goods to a registered recipient, the recipient is considered to have caused the movement of goods, provided the recipient is known at the time the goods movement commences.
Generating an E-Way Bill
Before initiating the movement of goods, the registered person must electronically furnish the required information on the common portal, as specified in Part A of FORM GST EWB-01. This information includes:
- Details of the goods.
- Other required information on the common portal.
Upon submission, a unique number will be generated on the portal. The e-way bill generated under this act is valid in every state and union territory.
Exceptions to the ₹50,000 Limit
In the following cases, an e-way bill is mandatory, regardless of the consignment value:
- Inter-state Job Work: When a principal in one state or union territory sends goods to a job worker in another state or union territory, either the principal or the job worker (if registered) must generate an e-way bill.
- Handicraft Goods Transportation: When a person exempt from registration under Section 24 transports handicraft goods between states or union territories.
Exemptions from E-Way Bill Requirements
The e-way bill is not required in the following cases:
- (a) When goods being transported are specified in Annexure.
- (b) When goods are being transported by a non-motorized conveyance.
- (c) When goods are being transported from customs locations for clearance.
- (d) For movement within areas notified under specific state or union territory GST rules.
- (e) For exempt goods specified under Notification No. 2/2017 and its amendments.
- (f) For alcoholic liquor, petroleum crude, high-speed diesel, motor spirit, natural gas, or aviation turbine fuel.
- (g) For goods treated as “No supply” under Schedule III of the Act.
- (h) Under customs bond or supervision.
- (i) For transit cargo to or from Nepal or Bhutan.
- (j) For goods exempt from tax under specified notifications.
- (k) For movements by defense formations under the Ministry of Defense.
- (l) For consignments by government entities via rail.
- (m) For empty cargo containers.
- (n) For goods transported up to 20 km to a weighbridge and back with a delivery challan.
- (o) For empty cylinders for packing liquefied petroleum gas moved for reasons other than supply.
Validity of E-Way Bill
The validity of an e-way bill depends on the distance to be traveled:
| Sl. No | Distance | Validity Period |
|---|---|---|
| 1 | Up to 200 km | One day (except Over Dimensional Cargo or multimodal shipment). |
| 2 | Every additional 200 km | One additional day. |
| 3 | Up to 20 km (Over Dimensional Cargo) | One day. |
| 4 | Every additional 20 km | One additional day (Over Dimensional Cargo). |
Note: The Commissioner may extend the validity for certain goods through notification. In exceptional circumstances, the transporter can extend the validity within eight hours of its expiry by updating details in Part B of FORM GST EWB-01.
As per the notification dated 22 December 2020, No. 94 /2020. the validity period of e-waybill changed from 100 KM per day to 200 KM per day from 01/01/2021.
Definitions
Relevant Date: Refers to the date on which the e-way bill is generated. The validity period starts from the time of generation.
Over Dimensional Cargo: Refers to a single indivisible unit of cargo exceeding dimensional limits prescribed in Rule 93 of the Central Motor Vehicle Rules, 1989.
Cancellation of E-Way Bill
An e-way bill can be cancelled electronically on the common portal if:
- Goods are not being transported.
- Goods are not being transported as per the details furnished.
Note: Cancellation must be done within 24 hours of generation. An e-way bill cannot be cancelled if verified under Rule 138B.
Conclusion
The e-way bill system has streamlined the transportation of goods across India, making it faster and more efficient. With benefits such as the elimination of state boundary check posts, faster movement of goods, and improved tax compliance, the e-way bill is a crucial tool in the GST framework. While there are exemptions in certain cases, businesses and individuals must ensure they comply with the requirement when transporting goods exceeding ₹50,000 in value.
The simplicity of generating an e-way bill online, along with its validity period and ease of cancellation, further enhances the system’s effectiveness. Through this initiative, India has taken a significant step toward improving the ease of doing business and facilitating smoother trade operations within the country.
