E-way Bill is a reformed version of the erstwhile Waybill system prevailing under VAT. The provision was introduced vide GST Notification No. 27/2017 dated 30th August 2017 by revising the Rule 138 by Sixth Amendment to CGST Rules 2017. Electronic E-way Bill is a compliance mechanism, wherein by way of the digital interface the person causing movement of goods uploads the relevant information prior to the commencement of movement of goods and generates E-way Bill. Movement can be in relation to supply or other than supply.
What is an E-way Bill: Generation, Modification, Validity, Extension and Cancellation
An E-way Bill is a receipt or a document issued by the carrier. It is required to be carried by a person in charge of the conveyance carrying any consignment of goods as mandated by the Government in terms of Rule 138, Section 68 of the Goods and Services Tax Act. It can be generated by either the consignee or the consignor and in some cases, by the transporter. There are multiple actions that need to be taken in an E-way bill once it is generated depending on the movement of goods. Read here to know more about E-way Bill under GST.
E-way Bill Scope and Key Timelines
The provision which was introduced in August 2017, was first supposed to come into force from 1st Feb 2018. However, the same was deferred due to lack of industry preparedness and was finally implemented PAN India w.e.f 1st April, 2018 in respect of inter-state supplies of goods.
Although it is mandatory to generate E-way Bill for any consignment of value more than Rs. 50,000 but the transporter/registered person may, at his option, generate and carry the E-way bill even if the value of the consignment is less than fifty thousand rupees. Read here to know more about E-way Bill mandate
Why E-way Bill
- Single E-way bill for hassle-free movement of goods throughout the country
- Eliminates the need for separate transit pass in each State to move goods
- Movement from Departmental policy model to “Self Declaration” model
- Controlling tax evasion
- No more waiting time at the check post
- Optimum use of vehicles and resources
- Smooth and easier verification of E-way bill by tax officers
E-way Bill Generation by Transporter
In certain cases where consignor or consignee fail to generate the E-way bill, the transporter is liable to generate the E-way Bill on the basis of invoice or bill of supply or delivery challan as the case may be. Transporter may also create a consolidated E-way Bill for bulk dispatch of multiple consignments in a single vehicle. Read key responsibilities of a transporter to know more details. Now, in case of transporters who operate in multiple states using different GSTIN under the same PAN, managing multiple E-way Bill accounts can prove to be a cumbersome chore. To offer some relaxation, GST notification no. 28/2018 – Central Tax dated 19th June 2018, introduced a new concept of Common Enrolment Number that simplifies E-way bill generation for transporters present in multiple states.
E-way Bill for Goods transported by Unregistered person
Section 2(84) of the CGST Act terms the person who is not registered under the Act as an unregistered person (URP). As an example, persons having an annual turnover less than Rs 20 lakhs are not liable to obtain a GST registration and hence will get classified as an unregistered person. Such unregistered persons as part of their usual business process, however, may need to transport goods. In cases where E-way Bill is prepared by an unregistered supplier, information is made available electronically via mobile or email if available. Read here to know E-way Bill For Unregistered Persons
Penalties for non-generation/ not carrying E-way Bill
The basic premise of generating an E-way Bill for inter-state and intra-state transportation of Goods is to eliminate the chances of tax evasion. The E-way bill lowers the chances of bribery and corruption and ensures a smooth and efficient transition of goods across the nation.
However, many times, businesses either fail to generate E- Way Bill or do it in a wrongful manner which attracts penal action.
Penal Provisions on Non-Generation of E-way Bills:
- Detention and Seizure
Read all about E-way bill penalties, confiscation and seizure.
E-way Bill –Recent Rule Updates and Process Advancements
The E-way Bill provision which replaced the erstwhile Waybill system from VAT days, has been a powerful tool in the hands of the government given its digital nature. The government has been refining the system ever since the introduction of the mandate in April 2018 to narrow down on tax evaders. There has been mult E-way Bill updates in 2021 and 2019 issued over the years to tighten the ropes. This includes auto calculation of distance from PIN to PIN location, barring generation of multiple E-way bills on single invoice number, barring of generation of E-way bills for interstate movement by composite taxpayers and E-way bill extension in case of in-transit consignments, E-way Bills and HSN Codes, E-way bill non-generation for services etc. Other important advancements are as follows:
1. Reconciliation between GSTR1 and E-way Bill
The information furnished in Part A of E-way Bill is made available to the registered taxpayer (supplier) on the common portal who may utilize the same for furnishing details in GSTR 1. While GSTR1 is essentially a detailed report on all of your outward supplies, E- Way Bill is a sub-set to the GSTR 1 carrying details of only those outward supplies where there is movement of goods over and above a threshold limit. Also, there can be a scenario where E-way Bill needs to be generated for movement of goods on delivery challans, but these supplies do not find their way directly in terms of “value reported” in GSTR1. Importing Your E-way Bills into GSTR-1 – learn how you can prepare.
2. Blocking and Unblocking of E-way Bill generation
E-way Bill generation is blocked for taxpayers who fail to filed their GSTR3B returns for the previous two or more tax periods (includes both monthly and quarterly return filers).
Many times, a taxpayer is unable to file his GST returns, intentionally or unintentionally. However, due to these missing invoices, the buyer is unable to claim ITC for taxes he has paid. Furthermore, the blocking of GSTIN for E-way bill generation is also being touted as an Anti-evasion step to shore up the revenue and increase GST compliance. However, it is important to unblock GSTIN for E-way Bill Generation.
3. Vehicle Verification of E-way Bill (Vahan)
E-way bill is now integrated with Vahan System of Transport Department
- Vahan System provides a nationwide search over the digitized data of Registered Vehicles
- Now at the time of E-way bill generation, the vehicle registration number is validated.
4. Real-Time Vehicle Tracking (FASTag and RFID)
The E-way Bill system is now integrated with RFID. Transporter needs to have ‘RFID tag’ which should be placed on the windscreen of the vehicle. FASTag is a device that employs Radio Frequency Identification (RFID) technology for making toll payments directly while the vehicle is in motion. FASTag (RFID Tag) is affixed on the windscreen of the vehicle and enables a customer to make the toll payments directly from the account which is linked to FASTag.
Integration of E-way bill with FASTag will help revenue authorities track the movement of vehicles and ensure that they are travelling to the same destination as the transporter or the trader had specified.
It will also help the suppliers locate the goods through the E-way bill system. Transporters, too, would be able to track their vehicles through SMS alerts that would be generated at each toll plaza.
5. E-way Bill Post E-invoicing
The e-invoice mandate came into force from 1st October 2020 Under the e-invoicing mandate, invoices that the taxpayers generate need to be registered on the official e-invoicing portal set up by the Government called as Invoice Registration Portal (IRP) in response of which an Invoice Registration number (IRN) is generated unique to every invoice. As a step ahead, the Government has streamlined the generation of E-way Bill with E-Invoicing. And IRP can be used to generate not only IRN but also E-way bills, for the documents which qualify. Thus, depending on the data sent, the IRP system will return IRN or E-way Bill Number or both.
With E-invoicing-E-way Bill pairing, E-way Bill management has become far too complex.
E-way Bill Generation under specific scenarios
1. Generating E-way Bills under Bill To and Ship To scenario
‘Bill-to and Ship-to’ is a common business scenario wherein the party to whom invoice is billed is different from the party actually receiving the goods or services. While reporting in GST returns and also for seamless transfer of Input tax credit, there are two invoices generated in the transaction. But the physical movement of goods is happening only once. Thus, E-way bill needs to be created only once and could be ideally generated by Bill-to party as this party might have charged different to Ship-to party on the invoice, so E-way bill and invoice details should match accordingly. Read to know more about bill to and ship to in e-way bill
2. Consolidated E-way Bill
There are two categories of E-way Bill- Individual E-way Bill and Consolidated E-way Bill.
Individual E-way Bill – It is mandatory to generate an individual E-way bill for each consignment having goods value more than Rs. 50,000 except for goods specified earlier.
Consolidated E-way Bill – At times, there are multiple consignments transported through a single vehicle. In such cases, a consolidated E-way Bill (Form EWB-02) can be prepared which is a single document that contains details of all individual E-way Bills related to the various consignments.
It is optional to generate a Consolidated E-way bill. Consolidated E-way Bill does not have any independent validity period. However, individual E-way bills in CEWB should reach the final destination as per their validity period. Read here to know more about Consolidated E-way Bill
3. Multi-Vehicle Option for E-way Bill
Multi vehicle option comes into picture when after trans-shipment, the goods related to one consignment is moved in more than one vehicle. This option is available at the place of trans-shipment and not from the supplier’s place. Earlier, separate delivery challans had to be raised first for consignment moving in multiple-vehicles, followed by generation of separate E-way bills for the same. Now, using the multi-vehicle option, the multiple conveyance details can be filled in after generating the E-way bill.Read here to know more about Multi-Vehicle Option for E-way Bill
4. E-way Bill for CKD/SKD
- Huge consignments cannot be transported in a single-vehicle.
- Goods are moved in parts rather than an entire lot in a single-vehicle
- Need to raise a single invoice for the supply of goods, even though consignment is split into multiple vehicles.
- Need to raise delivery challan for each of the vehicles
- Each vehicle to carry delivery challan along with the invoice copy
- E-way bill to be generated for every delivery challan generated for every vehicle and original invoice to be sent along with the last consignment
5. E-way Bill Rules and Requirements for Import Transactions
Import means bringing goods to India from a place outside India. After goods reach India, certain procedures for clearance of imported goods are required to be followed as defined under the Customs Act until the goods are delivered to the destination place in India. Read here to know the treatment of Import transactions for E-way Bill Generation.
6. E-way Bill Rules and Requirements for Export Transactions
After goods reach from the business place of the exporter to port/airport or warehouse, certain procedures for clearance of exported goods are required to be followed as defined under the Customs Act till the goods are delivered to the destination place outside India. As there is movement of goods, E-way Bill needs to be created under specific scenarios . Read here to know more about E-way Bill Rules for Export Transactions
7. Rejection of Goods
There are cases where the recipient may reject to take the delivery of the consignment due to damaged goods or wrong supplies. A delivery challan needs to be issued for Sales Return. A delivery challan is a document that is issued for transporting goods from one place to another when the transaction is not considered as a ‘supply’. Supplier issues a Credit Note to the recipient in such a situation.
How to generate an E-way Bill when the goods are rejected by the recipient? There can be two cases here – A. The goods are in the warehouse of the transporter and are rejected by the recipient event before receiving them. Here, the goods will have to be transported back to the supplier’s godown. B. The goods have reached the recipient and then they get rejected due to say some damage or ‘faulty products received’ or some ‘other consignment is received’ mistakenly. In this case, the goods again have to be transported back to the supplier. Read here to learn all about generating eway bill for goods rejected returned.
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