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The year 2017 will be marked as a historical year in terms of reforming indirect taxation laws in India. Goods and services tax was introduced to strengthen the indirect taxation mechanism in India and also to make taxation easy and transparent. Under GST the concept of E-way Bill was introduced and it is mandatory for the transporters to carry E-way bills when they are moving goods from one place to another. In this article we will understand what is an E-way Bill, when it is necessary to generate an E-way Bill, who should generate it, scenarios where an e-way bill is not required, validity of an e-way bill and what documents are needed while obtaining an e-way bill.
Registration is the fundamental requirement in order to identify a taxpayer and to ensure that he/she is tax compliant.GST law in India makes it mandatory for the businesses to register their businesses and obtain a unique number known as GSTIN. Absence of GSTIN results in failure in collecting taxes as well as claiming input tax credit.
● Taxpayer becomes a legal supplier of goods and services.
● Gains legal authority to collect taxes from customers.
● Becomes eligible to claim input tax credit
‘Supply’ is the essence of the entire GST regime, any event of supply must be done by a registered supplier. For businesses whose turnover is above 20 lakhs rupees, they are liable to register themselves whereas those below the threshold limit have a choice whether to opt or not to opt for registration.
Exceptions-
● Small business i.e. aggregate turnover below Rs. 20 lakhs
● Small business i.e. aggregate turnover below Rs. 10 lakhs for business in assam, arunachal pradesh, himachal pradesh, uttarakhand, manipur, mizoram, sikkim, meghalaya, nagaland, tripura).
Before the application of GST, delivery notes issued by the VAT offices were used to monitor bulk trades through trucks which were submitted in form of utilisation statements by the taxpayers in the designated VAT offices by the end of each month. Seeking this delivery note was tiresome and time consuming and involved several visits to the tax office.later on under the ambit of e-governance initiative this system of delivery note was digitised furnishing efficient and speedy services to the tax-payers but was ultimately replaced by the much more efficient E-way Bill system under GST.
E-WAY bill is an electronic way bill which gets generated on the e-way bill portal ewaybill-gst-gov-in-portal, whenever a person transports through a vehicle the goods in which are of value exceeding INR 50,000. E-way Bill could be generated either through SMS, android application, using a portal entering the GSTIN details or by taking the help of experts. A generated E-way Bill comprises a unique E-way Bill number (EBN) which must be available with supplier, recipient and the transporters.
The motto behind implementation of GST was one nation-one tax- one market and generating separate waybills in form of delivery notes under the VAT regime was complicating the compliance resulting in tax evasion due to its varying nature from one state to another which is why e-way bill turned out to be an efficient rule where a common portal tracked, verified and kept in loop all the stakeholders in the picture.
Let us understand the process of e-way bill with the help of an example
A is the supplier of goods residing in new-delhi, C is the recipient of the goods residing in Maharashtra and B is the transporter i.e. the vehicle in which the transport of goods will commence from new delhi to maharashtra.
Now, for the transportation of goods involving A,B&C will require generation of E-WAY Bill which will comprise of-
● Information of all the three parties.
● GSTIN of recipient
● Place of delivery
● Details of the invoice
● Value of the goods
● HSN Code
● Details of the commencement of the movement of goods.
● Generated e-way bill and the EBN must be available to all the parties.
● The person in charge of conveyance will carry with him the invoice of the delivery alongwith the waybill or E-way Bill number.
● The acceptance by the recipient is an important consideration which must be communicated before the generation of the eway-bill.
● The E-way Bill or the E-way Bill number is verified by the officer authorised by the state who has the right to check the conveyance carrying goods.
● Upon such inspection of the conveyance by the officer incharge a summary report within twenty four hours of the inspection must be recorded online and a detailed final report must be recorded within three days of the inspection.
● If in case the conveyance carrying the goods is stalled by the officer incharge for more than 30 minutes, the information of the same must be furnished by the transporter in the common portal.
● Movement of goods throughout the country is done with a single E-way Bill.
● Consolidation of the entire data of the parties involved in the transaction prevents tax evasion or any kind of possible illegal activity.
● Smooth and transparent movement of goods across the entire country.
● E-way Bill number acts as an identification number with the help of which goods and their status could be easily tracked by all the parties.
● Officers incharge can now easily verify the conveyance.
● No need for visiting tax offices, the entire process could easily be done through a common portal.
● Vehicles carrying goods are no longer stalled in long queues due to the speedy verification process.
● Self declaration brings transparency i.e. all the information is furnished by the trader supplying and trader receiving the goods resulting in generation of authentic information.
● Use of tons of papers for generating bills and challans has reduced to one electronic bill.
● Automatic generation of the GSTR-1 return.
The responsibility of generating an E-way Bill varies from circumstances of the supply and movement of goods. In general an E-way Bill is initiated by-
● Consignor i.e. supplier of the goods who is responsible for generating E-way Bills because in most of the cases the supplier is the transporter of goods.
● Consignee i.e. the recipient of the goods can also generate the e-way bill in case of non-generation by the consignor.
● Transporter i.e. the person responsible for the conveyance can also generate the E-way Bill if not done by either consignee or consignor. This E-way Bill can be generated using the information provided by the supplier or the recipient.
● Unregistered person i.e. who has not registered his business and doesn’t have a GSTIN but needs delivery of the goods must get the e-way bill generated by the registered supplier.
● If both the supply as well as the recipient are unregistered entities then it is mandatory that they transport the goods through a registered transporter who will generate the E-way Bill on their behalf.
● In most of the states if the movement of goods is within the city comprising distance upto 10 kms then e-way bill is not required, but one must thoroughly check the local rules for the same.
● If the transportation is of exempted goods i.e. goods on which GST isn’t levied then no e-way bill is required for their transportation.
● Goods which aren’t a subject matter falling within GST such as alcohol,petroleum products and electricity do not require an E-way Bill for their movement.
● Latest notifications and updates by the government from time to time specify certain goods for which an E-way Bill is not required, these exemptions keep on changing therefore, it is necessary to keep checking the GST portal for such information.
● Movement of goods through horse carts or manually pulled rickshaws, hand carts i.e. any non-motorized conveyance does not require furnishing an E-way Bill.
Please note, these exemptions vary from time to time and are notified duly upon the designated portal.
The approximate distance entered while generating the EWB corresponds to its validity period but in cases where the consignment fails to reach the destination within the validity period then the user can extend the e-way bill eight hours before or within eight hours after the existing validity of the E-way Bill.
Validity of the E-way Bill can be extended through the GST portal upon selecting the appropriate reason from the dropdowns. Validity could be applied for goods both in movement or in transit and the approximate distance remaining till the destination.
In scenarios where the transporter need to do bulk supply of goods in that case he doesn't need to apply for E-way Bill each time, instead can update his transporter id in the portal and can generate bulk E-way Bills at once, this reduces the large amount of data entries and also saves time.
In case if the transporter is carrying multiple consignments in a single vehicle, then instead of carrying and creating separate EWB the transporter can generate a single document by selecting the option of consolidated EWB in the portal using which the transporter can generate multiple bills at once.
Implementation of the E-way bill system is a significant breakthrough in streamlining the taxation regime in India and implementing the GST regime efficiently. Right from the generation of an efficient portal to inclusion of all necessary dynamics involved through the transportation of goods from one state to another are beautifully covered with the implementation of Eway- Bill. The only limitation is the digitalization of the entire process which at times becomes difficult for suppliers, recipients and transporters to understand and comply by, but it is important for us to understand that more than a regulation an E-way Bill is a tool which significantly contributes in making the entire transportation process hasslefree therefore, with the help of right experts this tool could be effectively used.
1. What is an E-Way Bill?
Answer: An E-Way Bill is an Electronic Way Bill for the movement of goods, which is required to be carried by the person in charge of the conveyance transporting any consignment of goods of value exceeding a specified threshold. This document is generated online from a designated portal, serving as proof of the compliance of goods being transported with the tax regulations.
2. Who should generate an E-Way Bill?
Answer: The E-Way Bill must be generated by the consignor or consignee of the goods if the transportation is being done in their own or hired conveyance. In the case of goods being transported by a transporter, the responsibility to generate the E-Way Bill falls on the transporter.
3. When should an E-Way Bill be generated?
Answer: An E-Way Bill should be generated before the commencement of the transportation of goods when the value of the consignment exceeds the prescribed threshold limit. The limit can vary from one jurisdiction to another; for instance, in India, this limit is currently set at INR 50,000.
4. What information is required to generate an E-Way Bill?
Answer: To generate an E-Way Bill, the following information is required:
Details of the consignor and consignee (name, address, GSTIN, etc.)
Invoice or Bill of Supply details (number, date, value of goods, etc.)
Transport details (Transporter ID, vehicle number, or Transporter Document Number for rail, air, or ship freight)
HSN Code (Harmonized System of Nomenclature) and reason for transportation.
5. How can one generate an E-Way Bill?
Answer: An E-Way Bill can be generated through the official E-Way Bill portal provided by the government by registering as a user. After registration, users can log in and fill in the required details in the E-Way Bill form to generate it. There are also provisions for bulk generation of E-Way Bills and through SMS for smaller taxpayers.
6. Is there a validity period for an E-Way Bill?
Answer: Yes, an E-Way Bill has a validity period, which depends on the distance the goods have to be transported. The validity is generally calculated from the time of the generation of the E-Way Bill and is usually 24 hours for every 100 kilometres or part thereof. This validity can be extended under certain conditions.
7. What happens if goods are transported without an E-Way Bill?
Answer: Transporting goods without a valid E-Way Bill when it is required is considered a violation of the tax laws. This can lead to the seizure of the goods and the vehicle transporting them, along with hefty penalties imposed on the transporter, consignor, and/or consignee.
8. Can an E-Way Bill be cancelled?
Answer: Yes, an E-Way Bill can be cancelled if the goods are not transported or are not transported as per the details provided in the E-Way Bill. This cancellation must be done within 24 hours of generating the bill. However, an E-Way Bill cannot be cancelled if it has been verified in transit.
9. Are there any exemptions from E-Way Bill generation?
Answer: Yes, certain goods and types of transportation are exempted from the requirement of generating an E-Way Bill. These exemptions may vary based on the specific regulations of the jurisdiction. Common exemptions include the transportation of perishable goods, goods being transported for customs clearance, and transportation within specified areas.
10. How does the E-Way Bill system benefit businesses and the government?
Answer: The E-Way Bill system streamlines the process of goods transportation and ensures tax compliance, reducing tax evasion. For businesses, it facilitates easier and faster movement of goods across states and reduces paperwork. For the government, it provides a digital trail of goods movement, aiding in the efficient monitoring and collection of taxes.
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