Everyone’s talking about Goods and Services Tax and how best to get used to the new taxation system. To make transporting goods easier, the government introduced the E-Way Bill. The document, which is generated online, is required for the movement of goods across India. Here’s what you need to know to be compliant with the new rules.
E-Way Bill Explained
Typically, goods move between a seller and a buyer. In some cases, companies move goods between their various branches. As of April 1, 2018, all goods being transported, in or outside of your state, valued at ₹50,000 or more require an E-Way Bill. That applies to both business-to-business and business-to-consumer transactions. The E-Way Bill is usually generated by the seller of goods and carried by the transporter to show authorities, when asked, that the transaction is in compliance with GST.
For example, say a manufacturer of goods in Jaipur sells a product wholesale to a customer who sells it at their shop in New Delhi. Under the new GST system, the manufacturer must register on the GST E-Way Bill portal, and they must generate the E-Way Bill to transport the goods to New Delhi. The manufacturer gives the document to the transporter in case they’re stopped along the way. If the manufacturer in Jaipur isn’t registered on the E-Way Bill portal, the business person in New Delhi should generate this document, or the transporter if neither party is registered.
What’s on an E-Way Bill?
The E-Way Bill contains details about the shipment including a list of the goods being transported, their harmonised system of nomenclature codes, and their value. It also should include details about the business that is sending the goods, such as their business name and GST Identification Number. Then, it should list the destination, invoice number, and the reason for transport. The transport document number and the vehicle number also need to be noted.
Why Is the E-Way Bill Required?
The government introduced the E-Way Bill to simplify taxation, discourage tax evasion, and speed up delivery, all of which are good things for businesses. In the past, transporters spent as much as 20% of their time at various check points on their journeys. Delays figured into the cost of goods and had a negative impact on customer service. Fast forward to 2018 and E-Way Bill data can be accessed easily by authorities, meaning checks can be done quickly and transporters can be on their way to their destinations without hassles.
Are There Any Exemptions?
Some goods are exempt from the E-Way Bill, including fresh fruits and vegetables, some raw materials like wool and silk, gold and silver jewellery, and precious stones and metals. Goods transported less than 10 kilometres also don’t need an E-Way Bill. The electronic document is not needed for goods transported in non-motorised forms of transportation. But even when you’re exempt, it’s a good idea to carry any documentation you have showing the goods are in compliance.
What if You Don’t Have Access to a Computer?
You need a computer if you generate multiple E-Way Bills at a time, which might be the case if you run a busy retail store that offers deliveries. If you don’t have access to a computer, which might happen if you’re on site buying goods from another business for delivery to your location, you can generate a single E-Way Bill by SMS. You can register to create E-Way Bills on your computer and mobile phone on the same portal.
Getting used to the GST E-Way Bill system may take some time. But eventually, you might find yourself spending less time worrying about how and when your goods will reach your customers and more time thinking about ways to grow your business. To make the transition as easy as possible, you may want to check out GST-ready cloud-based accounting software such as QuickBooks.