E-Way Bill System: Transforming Goods Movement in the GST Era

In the era of GST, the removal of check posts nationwide aimed to streamline the movement of goods within India. To uphold tax compliance, the E-Way Bill system was introduced, necessitating taxpayers to pre-inform the tax department about transaction details before the conveyance of goods. The system issues an acknowledgment number, serving as a vital accompanying document for the transported goods. This article explores the critical role of the E-Way Bill system in enhancing tax transparency and facilitating efficient, obstruction-free logistics across the country.

E-Way Bill and Statutory Requirements:

The statutory framework governing the movement of goods under the GST regime is enshrined in Section 68 and Rule 138. Section 68 empowers the Government to mandate that the person in charge of a conveyance carrying goods exceeding a specified value must carry prescribed documents and devices. Rule 138, in line with this provision, designates the E-Way Bill as the requisite document for consignments in specific cases.

An E-Way Bill, essentially a digital waybill, serves as a vital receipt issued by the carrier. It contains comprehensive details such as the consignor`s and consignee`s names, the consignment`s point of origin, destination, and the designated route. Functioning as a compliance mechanism, the E-Way Bill is generated through a digital interface on the GST portal. This electronic document not only facilitates the seamless movement of goods but also acts as tangible evidence of the consignment`s journey, ensuring transparency and adherence to statutory regulations.

Who are required to generate E-Way Bill and Process

E-Way Bills, crucial in facilitating the seamless movement of goods under the GST regime, are electronically generated through Form GST EWB 01 on the Common portal at www.ewaybillgst.gov.in  This digital documentation can be generated via various modes, including Web (Online), Android App, SMS, Bulk Upload Tool, and API-based site-to-site integration.

To engage in the generation, cancellation, updation, and assignment of E-Way Bills, the supplier, recipient, or transporter must be a Registered person on the GST portal and additionally register on the E-Way Bill portal using their GSTIN.

For unregistered transporters, mandatory enrolment on the E-Way Bill portal is required, resulting in the issuance of a 15-digit Unique Transporter ID called TRANSIN. This unique identifier is akin to GSTIN and is generated based on the State code, PAN, and a checksum digit. Registered transporters with GSTIN in multiple states under the same PAN can opt for a common enrolment process. By submitting details through any one of their GSTINs, they receive a unique common enrolment number, which streamlines the use of a single registration number for E-Way Bill purposes nationwide.

Rule 138(1) :

An E-Way Bill is required for the movement of goods exceeding Rs. 50,000 in value,  

• in relation to a supply; or

• for reasons other than supply; or

• due to Inward supply from an unregistered person,

The Registered person or the transporter has the option to generate and carry the e-way bill even if the value of the consignment is less than Rs. 50,000 [First proviso to Rule 138(3)].

The Registered person initiating the movement must furnish the necessary information specified in Part A of Form GST EWB-01 before the commencement of such movement. It is noteworthy that this information must be provided before the commencement of goods movement, regardless of whether it is for supply or other reasons.

Who causes movement of goods?

If supplier is registered and undertakes to transport the goods, movement of goods is caused by the supplier. If recipient arranges transport, movement is caused by him. If goods are supplied by an unregistered supplier to a registered recipient, movement shall said to be caused by such recipient , if the recipient is known at the time of commencement of the movement of goods.

Consignment Value of Goods:

The determination of the consignment value of goods is a critical aspect. It is based on the value determined in accordance with the provisions of section 15, declared in relevant documents like invoices or delivery challans, and includes applicable taxes. For movements due to reasons other than supply, a delivery challan must accompany the goods, specifying their value. The value declared in the delivery challan is crucial for the E-Way Bill documentation. These statutory requirements play a pivotal role in ensuring transparency and compliance in the movement of goods under the GST framework.

Special Scenarios Requiring E-Way Bill Generation for Consignments Under Rs. 50,000:

In certain unique situations, the generation of E-Way Bills becomes mandatory even when the consignment`s value is less than Rs. 50,000. These scenarios are outlined in specific provisos to Rule 138(1) under Chapter XVI of the CGST Rules, 2017. Following are the cases:

Inter-State Transfer of Goods by Principal to Job-Worker:

When goods are dispatched from a principal located in one State or Union territory to a job worker situated in any other State or Union territory, the generation of an E-Way Bill becomes imperative. In this case, the responsibility for generating the E-Way Bill lies with either the principal or the job worker, provided they are registered, regardless of the consignment`s value.

Inter-State Transfer of Handicraft Goods by a Person Exempted from Registration:

This scenario applies to the transportation of handicraft goods from one State or Union territory to another by an individual exempted from mandatory registration under clauses (i) and (ii) of section 24. In such cases, the exempted person is required to generate the E-Way Bill, irrespective of the consignment`s value.

Handicraft goods are the goods specified in Notification No. 56/2018 CT dated 23.10.2018 which exempts the Casual taxable persons making inter-State taxable supplies of such handicraft goods from obtaining registration upto specified turnover limit

E-way Bill in case of ‘Bill To Ship To’ Model

It has been clarified via press release date 23.04.2018, that in case of “Bill to Ship to Model” in which goods are sent to a third party on the instruction of recipient. For example A bought goods from B and instructed B to deliver the goods to C. In this scenario B will make the invoice in the name of A but it will ship the goods to C on behalf of A. Here, 2 invoices will be generated, One B will generate to A and another invoice, which A will generate to C.

It is clarified that as per the CGST Rules, 2017, for the movement of goods which is taking place from “B” to “C” on behalf of “A”, either A or B can generate the e-way bill but it may be noted that only one e-Way Bill is required to be generated.

Information to be furnished in e-way bill:

An e-way bill, Form GST EWB-01, comprises two distinct parts, each serving a specific purpose:

Part A:

This section encompasses crucial details furnished by the Registered person causing the movement of goods. The information includes:

• GSTINs of both the supplier and recipient.

• The delivery location (including the PIN Code).

• Document details (such as Tax invoice, Bill of Supply, Delivery Challan, or Bill of Entry).

• The value of goods, HSN code, and reasons for transportation.

This section is mandatory when the consignment`s value exceeds Rs. 50,000.

Part B (Transport Details):

This part involves the transporter and includes details like Transporter document number (Goods Receipt Number, Railway Receipt Number, Airway Bill Number, or Bill of Lading Number) and Vehicle number in the case of road transport.

While Part B is typically furnished by the person transporting the goods, the first and second provisos to Rule 138(1) allow the transporter, e-commerce operator, or Courier agency to fill in Part A under certain authorizations.

Once the consignor/consignee completes all Part-A details, a temporary Part-A slip with a unique number is generated. This slip serves as a preliminary document, sharable with the transporter or used later by the supplier to input details in Part-B and generate the complete e-way bill. This sequential approach is particularly helpful when the supplier has invoice details ready but lacks transportation specifics.

Who is Mandatorily Required to Generate E-Way Bill:

(3) Who is Mandatorily Required to Generate E-Way Bill:

The generation of an e-way bill is contingent upon the nature of transportation and the entities involved. The following rules, as outlined in Rule 138, delineate the responsibilities:

1. Road Transport by a Registered person (Consignor/Consignee):

If the transportation is by road and conducted in an own/hired conveyance or a public conveyance, the responsibility falls on the Registered person, whether acting as the consignor or the recipient (consignee).

2. Road Transport Handed Over to Transporter:

In scenarios where neither the consignor nor the consignee generates the e-way bill, and the value of the goods exceeds Rs. 50,000, the responsibility shifts to the transporter.

The Registered person must provide information about the transporter in Part B on the Common portal, and the e-way bill is then generated by the transporter based on the furnished details in Part A [Rule 138(3)].

3. Transport by Railways, Air, or Vessel:

If goods are transported by railways, air, or vessel, the e-way bill is the responsibility of the Registered person, either the supplier or the recipient.

The Registered person must furnish information in Part B, specifically the transport document number (Goods Receipt Number, Railway Receipt Number, Airway Bill Number, or Bill of Lading Number), on the common portal, either before or after the commencement of movement [Rule 138(2A)].

For railway transport, the requirement to carry the e-way bill with the goods is waived. However, railways must carry the relevant invoice, delivery challan, or bill of supply with the goods. The e-way bill generated for the movement must be produced at the time of goods delivery. Railways are prohibited from delivering goods unless the requisite e-way bill is presented at the time of delivery [Proviso to Rule 138(2A)].

When is it Not Mandatory to Furnish Details of Conveyance in Part-B:

E-way bills are valid for road transport only when information in Part-B is provided. However, exceptions exist for goods transported within a state or union territory for a distance of up to 50 km. In such cases, conveyance details in Part-B are not mandatory when moving from the consignor`s business to the transporter`s business or from the transporter`s business to the consignee`s business.

Cancellation of e-way bill

Where an e-way bill has been generated, but goods are either not transported or are not transported as per the details furnished in the e-way bill, the e-way bill may be cancelled electronically on the Common portal within 24 hours of generation of the e-way bill [Rule 138(9)].

However, once an e-way bill has been verified in transit according to the provisions of Rule 138B, cancellation is not permissible. [First proviso to rule 138(9)].

Conclusion:

The E-Way Bill system, integral to India`s GST framework, streamlines the movement of goods, replacing check posts. Detailed generation processes, varied mandates based on transportation mode, and nuanced scenarios like the `Bill To Ship To` model showcase its adaptability. Special provisions, cancellation options within 24 hours, and a 15-day validity for updates emphasize the system`s dynamic nature. The E-Way Bill system not only ensures efficient logistics but also promotes tax compliance and transparency, aligning with India`s goal of a simplified and digitized tax regime.