Understanding the E-Way Bill System – What It Means for India

Individuals, entrepreneurs and business concerns who are registered under GST need an additional electronic way bill for their product invoice and delivery challan when the total value of the products cross a certain threshold. Electronic way bills were introduced as part of the GST comprehensive taxations law and came into effect from 1^st March 2018.

What is an electronic way bill?

Electronic way bill is an acronym for electronic way bill and it is a signed document that needs to be generated when the transferred goods or service products exceed Rs 50,000 within state boundaries or interstate boundaries. An electronic way bill is an unique identifier which displays consignment status on the goods that are being moved.

Methods of E-way bill generation:

• There are also other multiple avenues under which e-way bill can be generated. For example Android apps, SMS from registered mobile numbers and website integration through API are some of the alternative-ways through which electronic way bill is generated.
• After the electronic way bill number is generated, the next step is its allocation and the same is made available to the goods recipient, goods supplier and the intermediary transporter.

Under what circumstances an E-way bill should be issued?

All movement of goods above Rs 50,000 should be followed by electronic way bill generation. Certain individual states like Tamil Nadu have increased the limit to Rs 1 Lakh.

Important point

• Business concerns should generate all the electronic way bills under the same platform be it a smartphone app or website integration.
• Some cases require that the electronic way bill is to be generated even when the goods consignment invoice is less than Rs 50,000.

These cases are:

• Goods which are sent by the principal to the individual job worker through interstate boundaries
• Handicraft goods which undergo inter-state transportation and which are carried out by a dealer who is exempted from GST registration

What is the importance of generating an electronic way bill in the GST regime?

Any electronic way bill generation is seen as a significant instrument of reform under the GST auspices. It was met with opposition in its earlier stages, but it was successfully rolled out for effectively tracking goods movement from April 1st 2018 under the GST regime.

The previous name of the electronic way bill was road permit. Just like a road permit, the electronic way bill is an amazing administrative tool to check and prevent tax evasion. The purpose of an electronic way bill is to ensure proper documentation in the successful accompaniment of goods during their movement from the supplier to the buyer.

In other words any movement of goods between consignor and consignee requires the application of electronic way bill. An electronic way bill is a vital part of the state government’s tax administrative agenda. Under the new GST umbrella, the electronic way bill takes a new birth and is enforced by the uniform application of laws across the country.

Electronic way bill system integrates a complaint system which offers the facility for transporters to lodge a complaint in case the vehicle undergoes detention in excess of 30 minutes. However, the electronic way bill system is not without its teething troubles. Small businesses are not welcoming some measures such as indicating GSTIN on the electronic way bill and the limited validity of the generated bill.

What are the goals of Electronic way bill system?

Broadly the government has brought out a comprehensive electronic way bill system for the below anticipated outcomes.

Elimination of check posts

• Unhindered passage of goods within the premises of a state and also across various state borders
• To reinforce the logistics ecosystem of India, resulting in increased traffic on important transportation gateways
• Decreasing lead time and cost of transportation by substituting the physical check post with mobile GST squads

Important point

Before the goods transport takes place, the consignment should include an authentic electronic way bill that displays the details of the transporters, recipients, consignor and details of the goods.

On feedback from the various stakeholders and respective state governments, the central government is working on the below steps:

• Updating the functionality of the electronic way bill platform so that the recipient’s acceptance rate is increased
• Any extension of validity is leading to the generation of multiple e-way numbers, which is leading to duplication.
• The time window of four hours extending the validity is seen as too short.
• Introducing a new mechanism to track delivery of goods and process of case closure of goods transportation on the website, once the delivery is complete
• The government is looking to update the GST electronic way bill software so that the subcontractors of small businesses are able to reconcile their purchases

What are the objectives of electronic way bill?

• Hassle-free movement of goods across states of India using a streamlined and robust method of transportation of goods without discretionary interpretation of rules at checkpoints.
• Elimination of the requirement of evaluating the cost of goods at every state checkpoint
• Replacement of bureaucratic policing model to the self-declaration model which ensures that the goods movement takes place in an atmosphere of integrity and electronic credential verification
• Both the transporters and individual taxpayers are saved a precious amount of time as the new model does not involve running around the tax offices waiting for the generation of the required documents for effective goods movement.
• The waiting time at the check post is drastically reduced. The speed of goods transport is increasing thereby flexing the economic engines to their maximum extent.
• The previous wastage of time under the road check system has been eliminated and the optimum usage of human resources and vehicle resources is taking place under the new GST rate from March 2018.
• The user-friendliness of the software platform of electronic way bill system ensures that people are not excluded from enjoying the convenience of electronic administration
• GST taxation system is reinforced with checks and balances due to the swift generation of electronic way bill.
• The quality of tax administration has increased and the resultant simplification of procedures has helped both taxpayers and businessman to verify their data and conduct their business in a stress-free-way.

What are some of the distinctive features of the e-way bill portal?

The introduction of the master list of customers, contractors, vendors and suppliers has helped the business to categorize the generation of electronic way bills. Bills can be tracked by the user during the period of movement of the goods which are done on his or her behalf.

The new electronic way bill platform has multiple modes which decrease the probability of bill rejection and improves transparency. Various sub-user profiles can be created and roles can be assigned for the generation of electronic way bills.

Strong technological integration with the mobile carriers ensures that SMS alerts and email alerts are sent instantaneously on the registered user credentials. The details of the vehicle number and other identifiers can be transferred by the recipient of goods to the supplier and in some cases the transporter is also given the option.

Integration of QR code on the electronic way bill and shows that there are no efforts of duplication Transport logistic systems comprising of multiple consignments are offered a unified electronic way bill for increased convenience.

What are the different methods for generating an electronic way bill?

• The portal – https://docs.ewaybillgst.gov.in/ can be accessed on a desktop, smartphone app or laptop using the supported browsers of Chrome, Mozilla and Internet explorer.
• Using SMS process from the GST registered mobile number.
• Integration of API software on the users dedicated system for online generation of electronic way bill.
• Bulk generation of bills using different tools provided by the GST department
• Introduction of Suvidha providers as third party vendors to generate a consolidated electronic way bill

Different categories of persons who can generate and e-way bill

• For a Registered user, in cases when the total goods worth is less than Rs 50,000, a person or specified transporter can decide to generate an electronic way bill.
• In case of a supply happening from an unregistered person, it is the responsibility of the receiver to ensure that all regulatory provisions are complied with.
• In case of generation of bills from an unregistered person, the receiver will fill in the shoes of the supplier for all regulatory requirements.
• Transport of goods through rail and road mechanisms also requires the generation of an electronic way bill.

Important points

If multiple consignments are happening through a singular conveyance, then the transporter can make use of GST electronic to generate a consolidated bill.

Scenarios where e-way bill is not required under GST law

• If a non-motor vehicle is used as a transport mode, there is no need for an electronic way bill.
• Any transportation of goods that takes place between customs ports, air cargo and land customs station to the internal destinations of container freight station and inland container depot for closer inspection by customs authorities.
• Goods transported under customs bond and customs supervision from one station to the other.
• Transportation of goods to or from Bhutan or Nepal
•  In the case of goods transportation by rail where the consignor of the goods is the central government or state or any municipal authority.

What is the present implementation status of the e-way bills across India?

The introduction of the electronic way bill resulted in the increased and highly flexible goods movement from April 1st, 2018. Various states are responding impressively to the uniform requirements of the electronic way bill. According to GST provisions, certain states can exempt their people from the generation of the electronic way bills up to a monetary limit of Rs 1,000,00.

To understand the differences in such rules and know more about the financial relief structures that are being offered by the states, the small business owners are encouraged to visit the commercial tax websites.

How can an e-way bill be generated?

E-portal login – https://docs.ewaybillgst.gov.in/ credentials are required to generate the electronic way bill on the government portal. In the case of smartphone and API integration on other websites, a detailed step-by-step guide has been provided by the government so that seamless integration of the database can take place.

Under what circumstances electronic way bill considered valid?

The validity of an electronic way bill depends on the travelled distance by the goods. That date and time of electronic way bill generation is taken into account and then the validity is arrived at. Extension of validity of electronic way bill can also take place. The supplier has a maximum of 4 hour time window before and after expiry to extend the validity of electronic way bill.

Documentation required in generating an electronic way bill

The documents related to the consignment such as bill of supply, invoice and supply challans. In the case of road transport, the vehicle number along with the VIN number and the transporter ID. The documents ensure that the identification of the transfer is uniformly applied across India and there are no hindrances in the movement of goods. The transporter should make sure that those who are operating the vehicle should have in possession, the electronic way bill number so that their identity can be verified at the time of inspection of mobile GST squads.

Summary

In India, the Electronic Way Bill was introduced under the GST regime in March 2018. Every time an individual or a company transports goods worth over Rs 50,000 from one place to another or even within the state boundaries, they have to prepare an electronic waybill for that. It is unique and ensures proper tracking of the movement of goods so that tax evasion is also prevented. This is generated through different methods including mobile applications, SMS or website integration. The main aim of the system has been to smoothen transportation, reduce check post delays and enhance the logistic efficiency. It has received several criticisms, such as limited validity and small business concerns. However, this is a crucial tool which simplifies the movement of goods and enhances tax compliance.

E Way Bill FAQs:

E Way Bill News

E-Way Bill Under GST Not Required For The Intra-City Movement Of Goods- Allahabad High Court

The Allahabad High Court upheld a judgment that the e-way bill will not be essential for the transportation of goods within the city. An e-way bill permits local deliveries within one kilometer with a value of Rs 50,000 or more. However, the states can change the restriction or offer exemptions for interstate product transportation or citywide movement. The appeals decision made by the Additional Commissioner Customs, GST, and Central Excise was in the case of Lucknow-based Bushrah Export House. In February 2020, the company requested a CGST refund of more than Rs 1.84 crore.

News Updated Date: 06th October 2022

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