From 1 KM to 1000 KM: When is an E-Way Bill Required & How Long is it Valid?

The E-Way Bill system under GST was introduced to streamline the movement of goods and curb tax evasion. However, even years after its implementation, many taxpayers and transporters are still unclear about its applicability, especially about E-way bill for short distances. A common misconception is that if goods are transported within a city or over a distance as small as 1 km, generating an E-Way Bill isn’t required. But GST law focuses not just on distance but also on the value of goods and the mode of transport.

In this article, we clarify when an E-Way Bill is needed for short movements and explain how long a generated e-way bill remains valid based on the notified distance rule. Let’s decode what the law actually says, so you stay compliant and avoid penalties.

E-Way Bill for Short Distances – Applicability

According to Rule 138 of the Central Goods and Services Tax (CGST) Rules, 2017, an E-Way Bill is required for the movement of goods if the consignment value exceeds ₹50,000, regardless of the distance traveled. This means that even if goods are transported over a distance as short as 1 km, an E-Way Bill must be generated if the value threshold is met.

The requirement applies to both interstate and intrastate movements. However, there are specific provisions for intrastate transportation:

• Part A of the E-Way Bill: Must be filled out if the consignment value exceeds ₹50,000.
• Part B of the E-Way Bill: Not required if the distance between the consignor and consignee is less than 50 km within the same state or union territory.

Note: It’s important to note that some states have their own thresholds and exemptions for intrastate movements. For instance, certain states like Gujarat have exempted the requirement of E-Way Bills for intra-city goods movement, regardless of the value.

Validity Period of the E-Way Bill

The validity of an E-Way Bill is determined by the distance the goods are to be transported. As per the amendments made by the Central Board of Indirect Taxes and Customs (CBIC), effective from January 1, 2021, the validity periods are as follows:

• For transportation by road (other than over-dimensional cargo or multimodal shipment involving ship transport):
  1. Up to 200 km: Valid for 1 day.
  2. For every additional 200 km or part thereof, an additional day is granted.

For example, if goods are to be transported over a distance of 250 km, the E-Way Bill will be valid for 2 days.

It’s crucial for businesses and transporters to plan their logistics accordingly to ensure compliance with these validity periods. Failure to adhere to the validity can result in penalties and seizure of goods.

Key Takeaways

• An E-Way Bill is mandatory for the movement of goods valued at over ₹50,000. E-way bills for short distances as short as even 1 km are also mandatory.
• For intrastate movements less than 50 km, Part B of the E-Way Bill is not required.
• The validity of an E-Way Bill is 1 day for every 200 km traveled, with additional days added for each subsequent 200 km or part thereof.
• State-specific exemptions may apply; it’s advisable to consult the respective state’s GST portal or notifications for detailed information.

Understanding these provisions is essential for ensuring compliance and avoiding potential legal complications in the transportation of goods under the GST regime. By staying updated with these provisions, businesses can ensure smoother logistics and remain on the right side of GST law. GST compliance is not just about filing returns, it extends to the proper documentation of goods movement, and the E-Way Bill plays a critical role in that process.

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