The government introduced the E-Way Bill system under GST on February 1, 2018. However, the system failed on account of technical glitches in the bill generation. Hence, the government deferred the launch of E-Way Bill System and successfully rolled out the same on April 1, 2018.
Initially, E-Way Bill system was applicable only for inter-state movement of goods. Later, the system was introduced for intra-state movement of goods as well. However, the system was rolled out in a phased manner for intra-state or within state movement of goods, .
Thus, there has been a steady increase in the number of E-Way Bills generated on the GST E-Way Bill platform. The number of bills created on the platform surpassed the 10 Crore figure within less than three months of the roll out of new E-Way Bill system. So, the government introduced this system in order to reduce tax evasion. Eventually, the marked improvement seen in the June 2018 tax collections saw the government’s belief turning into reality.
So, let’s understand what is GST e-way bill, how it is generated and the rules pertaining to E-Way bill generation.
What is an E-Way Bill?
Every person is required to furnish E-Way Bill if he meets the following conditions as per Rule 138 of CGST Rules 2017:
- The person should be a registered person
- Such registered person must cause movement of goods
- The movement of goods must be a part of supply or for any reason other than supply and
- Value of such a supply must be more than Rs 50,000
E-Way Bill is basically an electronic document that is generated on the GST portal and is a proof of physical movement of goods. This document is in Form GST EWB-01. It comprises of two components, that is, Part A and Part B.
Part A of the E-Way consists of the following details:
- GSTIN of the recipient
- Place of delivery (Pincode)
- Invoice or Challan Number and Date
- Value of Goods
- HSN Code
- Transport document number (This could include goods receipt number, railway receipt number, airway bill number or bill of lading number)
- Reasons for transportation
On the other hand, Part B of the E-Way Bill consists of the transporter’s details such as the vehicle number.
Further, person causing movement of goods is required to upload all the necessary information on the portal in order to generate E-Way Bill This information is to be uploaded prior to the commencement of movement of goods.
Who Should Generate E-Way Bill?
Following persons are required to generate E-Way bill under different circumstances:
1. Registered Person
A registered person causing the movement of goods over Rs 50,000 in value generates the E-way bill. This registered person can be a supplier or a recipient of goods. Furthermore, the registered person or the transporter can choose to generate E-Way Bill even if goods transported are less than Rs 50,000 in value.
Thus, the registered person causing the movement of goods exceeding Rs 50,000 furnishes Part A of the Form GST EWB-01. This information must be uploaded prior to the commencement of movement of such goods.
However, there are cases where a registered person causes the movement of goods, either acting as a consignor (seller) or a consignee (buyer). And the movement of these goods is undertaken either in his own or leased vehicle. Therefore, in such, the supplier or the recipient generate the E-way Bill. And such a person furnishes all the information in Part B of Form GST EWB-01 in order to generate the Bill. However, this information must be uploaded before the commencement of movement of goods.
Then, there are cases where E-Way bill is not generated by the registered person, whether a supplier or a recipient. Instead, goods are handed over to the transporter. Therefore, in such cases, the registered person furnishes the information relating to the transporter in Part B of GST EWB-01. But the transporter generates the E-Way bill based on the information furnished by the registered person in Part A of Form GST EWB-01.
2. Unregistered Person
There are cases when an unregistered person causes the movement of goods either using his own conveyance or using the services of a transporter. Thus, the unregistered person or the transporter himself generate the E-way Bill in such cases. This means that the unregistered person or the transporter have to generate the E-Way Bill even if the unregistered person is causing the movement of goods.
Further, there are cases where the unregistered person supplies the goods to a registered person. Provided, the registered person is known at the time of commencement of movement of goods. Thus, it is considered that the movement of goods is caused by the registered person in such cases. And either the registered person or the transporter shall complete the formalities with regards to the GST Bill in such cases.
Cases Where E-Way Bill Is Not Generated
Following are the scenarios where it is not mandatory to generate E-Way Bill:
- Goods transported from the transporter’s place of business to the recipient’s place of the business. Provided the distance is less than 10 Km within the same state.
- The goods transported from supplier’s place of business to the transporter’s place of business in order to undertake further transportation. Provided, distance is less than 10 Km within the same state.
- Goods transported via non-motorized conveyance
- The goods transported from airport, air cargo complex and land customs station to an inland container depot or a container freight station. Provided goods are transported for clearance by customs.
- Cases with regards to specified goods such jewelry, personal and household effects etc. These goods are prescribed in the list of items for which E-Way Bill is not needed.
- Movement of goods within areas specified under clause (d) of Sub-Rule (14) of Rule 138 of the State or Union Territory GST Rules of that State or Union Territory.
However, there are also scenarios where goods are transported for a distance more than 10 Km but less than 50 Km. In such cases, E-Way Bill is generated compulsorily. But, it is not necessary to mention or specify the details of the conveyance in the E-Way Bill.
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Validity of E-way Bill
The validity of an E-way Bill or a consolidated E-way Bill depends on the distance for which the goods have to be transported.
Accordingly, E-Way Bill would be valid for a day from the relevant date if goods are transported for a distance less than 100 Km. Thereafter, for every additional 100 Km or part thereof , the validity of the E-Way Bill shall be one additional day from the relevant date.
The “relevant date” here means the date on which the E-Way Bill is generated. Further, the period of validity shall be counted from the date on which the E-Way Bill is generated. And each day would comprise of 24 hours.
Normally, the validity of the E-Way Bill cannot be extended. However, the Commissioner may choose to extend the validity period only by issuing a notification for specific categories of goods.
Additionally, there might be situations where goods cannot be transported within the specified validity period due to some extraordinary circumstances. In such cases, the transporter can generate another E-Way Bill after revising the information in Part B of Form GST EWB-01.
Cancellation of E-Way Bill
There are situations where E-Way Bill is generated but due to some reason:
- goods are either not transported or
- are not transported according to the details specified in the E-Way Bill
In such cases, E-Way Bill can be cancelled electronically on the common portal. This can be done either directly or via a Facilitation Centre notified by the Commissioner. Provided it is done within 24 hours of generating the E-Way Bill. However, an E-Way Bill cannot be cancelled if it has been verified in transit according to the provisions of Rule 138 (B) of the CGST Rules 2017.
Penalty Under E-Way Bill
The rules get breached when the E-Way Bill is required but is not generated according to the provisions of Rule 138 of the CGST Rules 2017.
Therefore, a taxable person transporting taxable goods without carrying the specified documents including the E-Way Bill is liable to penalty. The penalty is levied according to Section 122 of the CGST Act 2017 for such an offence.
This penalty is higher of :
- A sum of Rs 10,000 or
- The amount of tax evaded
Furthermore, there are situations when a person transports or stores goods in transit in a manner that is against the provisions of the Act. In such cases, following would be liable for seizure:
- goods transferred
- conveyance used to transport such goods and
- documents relating to such goods and conveyance
To understand the concept of E-Way Bill in a simple way, consider the following infographic on What is GST E-Way Bill?