Understanding the E-Way Bill System

Introduction

The E-way bill system is a crucial component of India’s Goods and Services Tax (GST) regime. The Statutory requirement of e-way bill is covered under Section 68 of the CGST Act & Rule 138 of the CGST Rules, 2017. The E-way bill ensures the smooth and regulated transportation of goods across state borders. This article delves into the details of what an E-way bill is, when it is required, who is responsible for generating it, and other special cases. Understanding these provisions will help businesses comply with GST requirements effectively and avoid potential penalties.

1. What is an E-way bill?

An E-way bill (FORM GST EWB-01) is an electronic document required for the movement of goods when the consignment value exceeds Rs.50,000. This document is generated on the GST portal (www.ewaybillgst.gov.in). It helps track goods during their transportation, ensuring compliance with GST regulations.

2. When does It need to be generated?

An E-way bill is required in the following situations

• For supply-related movements.

• For reasons other than supply, such as stock transfers, job work, warranty replacements, exhibitions, or goods movement for personal use.

• For inward supply from an unregistered Person

3. Components of E-way bill

The E-way bill consists of two parts:

• Part A: Furnished by the registered person initiating the movement of goods.

• Part B: Contains the transportation details, filled in by the transporter or the person responsible for moving the goods.

4. Who should generate the E-Way Bill?

• For Road Transport: If the transportation is being done by consignor or consignee in their own/hired conveyance or by railways, by air or by vessel, then, e-way bill is to be generated by the consignor or consignee himself.

If the goods are handed over to a transporter for transportation by road, then the transporter shall generate the E-way bill.

In case the goods to be transported are supplied through an e-commerce operator, the information in Part A may be furnished by such ecommerce operator.

• For Rail, Air, or Vessel Transport: The registered person, being the supplier or recipient, is required to generate E-way bill by furnishing the information in part B of the E-way bill Form, before or after the commencement of movement. For instance, railways, will not deliver goods unless the E-way bill is presented.

5. What is the consignment value?

Consignment value=Value u/s 15 of the CGST Act as declared in an invoice, a bill of supply or a delivery challan (excluding value of exempt supply of goods where invoice issued for both exempt and taxable supply) +taxes (CGST, SGST, IGST or Cess).

6. Special Cases

• For goods sent from a principal to a job worker, the E-way bill should be generated by either the principal or the job worker if registered, regardless of the consignment value.

• Handicraft goods transported by exempted persons are also required to have an E-way bill, irrespective of the consignment value.

• If the distance between the consignor's location and the transporter is less than 50 km within the same state, Part B is not required, only Part A needs to be filled.

7. Validity of E-Way Bill

The validity of the E-way bill starts when the vehicle number is updated in Part B of FORM GST EWB-01.

It is to be noted that, unique EWB number once generated shall remain valid only for a period of 15 days for updating Vehicle No. in Part-B of FORM EWB-01.

The validity of E-way bill remains valid for a time period which is based on distance to be travelled by the goods as below

Relevant date= Date of generation of E-way bill

Validity period= for one day expiring at midnight of the day immediately following the date of generation of e-way bill.

8. Cancellation

The EWB once generated cannot be deleted. However, it can be cancelled by the generator within 24 hours of its generation provided the same has been not verified by any proper officer.

Further, EWB can be cancelled if, either goods are not transported or are not transported as per the details furnished in the EWB.

9. Consolidated E-Way Bills

When transporting multiple consignments in one conveyance, the transporter can generate a consolidated E-way bill (FORM GST EWB-02) by indicating the serial numbers of individual E-way bills on the common portal

10. Exceptions from generation of E-way bill

➣ E-Way Bill is optional for goods of value less than Rs.50,000.

➣ Goods being transported by a non-motorized conveyance (Ex. Horse carts or manual carts).

➣ Goods being transported from the port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs

➣ Goods being transported from one custom port/ station to another one under custom bond.

➣ Where the goods being transported are treated as no supply under Schedule III of the Act.

➣ Where the goods being transported are alcoholic liquor for human consumption, petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas or aviation turbine fuel;

➣ Where empty cargo containers are being transported.

➣ Where empty cylinders for packing of liquefied petroleum gas are being moved for reasons other than supply.

➣ If goods are transported to a weighbridge within 20kms and back to the place of business covered under a Delivery Challan (DC).

➣ Where Government or local authorities transport goods by rail as a consignor

➣ Goods transported to/ from the Ministry of Defense.

➣ Goods transported are transit cargo from/ to Nepal or Bhutan.

11. E-way bill in case of empty trolleys/ containers/ bins

As per Notification No. 12/2018, empty cargo containers do not require an E-way bill. However, this exemption does not apply to empty bins or trolleys which are returned to the original supplier by customer.

12. Consequences of non-generation of E-way bill

The consequences of not generating & carrying e-way bill can result in both monetary and non-monetary losses to the taxpayer.

1) Penalties: As per Section 129(1) of the CGST Act, the GST office can penalize the owner of the conveyance or the taxpayer with a fine of Rs. 10,000 or the amount of the tax being evaded, (whichever is higher) if the person is caught:

• Transporting any taxable goods without the cover of prescribed documents (invoice/bill of supply/ delivery challan and E-way bill)
• Tampering or destroying any material evidence or document;
• Disposing of or tampering with any goods that have been detained, seized, or attached.

In addition, a penalty of INR 100 for every kilometer of the distance for which the goods have been transported without an e-way bill can also be imposed.

2) Detention and seizure: The vehicle that is found to be transporting the goods without an E-way bill can be detained or seized and would be released only on payment of appropriate tax and penalty as specified by the officer. Under this, there could be two situations:

• If the owner wishes to pay the penalty, he must pay 200% of the tax payable. In the case of exempted goods, on payment of an amount equal to 2% of the value of goods or Rs.25,000, whichever is less.

• If not, the penalty will be equal to 50% of the value of goods. In the case of exempted goods, on payment of an amount equal to 5% of the value of goods or Rs.25,000, whichever is less.

Conclusion

The e-way bill provisions under GST will bring in a uniform e-way bill rule which will be applicable throughout the country. The physical interface will pave way for digital interface which will facilitate faster movement of goods. It is bound to improve the turnaround time of vehicles and help the logistics industry by increasing the average distances travelled, reducing the travel time as well as costs.

Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.