What is E-way bill?
An e-way bill is a document issued by the party transporting goods with details of the type of goods being shipped, details about the transporter of the shipment and who it is being sent to, and details on where the journey is beginning from and where it is sent to.
As per the GST rules, a GST registered person cannot transport goods without an e-way bill if the value of goods exceeds Rs 50,000 (single invoice/bill/delivery challan). E-way bills are generated on the eWay Bill Portal.
Every E-way bill consists of 2 parts. Part A and Part B. Part A consists of all the details of the shipment that were mentioned above and a few more that include GSTIN of the receiver, Invoice, the approximate estimation of the value of the goods that are being shipped, HSN code, Airway bill number, and the reason to justify the transport of said goods.
Part B consists of the details of the vehicle that is being used to transport the shipment.
Ex: Vehicle number etc.
When an e-way bill is generated, a unique Eway Bill Number (EBN) is generated and is sent to the supplier, transporter and recipient.
Why are e-way bills necessary?
E-way bills aim to smoothen the VAT based billing system that was traditionally in use. The introduction of GST – a centralized structure, brings in uniformity and eliminates any bottlenecks that were earlier created at check posts.
Any person who is transporting a shipment whose worth is more than Rs 50,000 should generate an e-way bill.
An e-way bill ensures that all the goods that are transported are in line with the GST rules and no party involved is evading from paying tax to the government.
How to generate an e-way bill
Here are a few prerequisites for any person to create an eway bill:
- Should be registered on EWB portal
- Invoice of the shipment should be handy. Bill or challan can also be used here.
- Registration documents of the vehicle used for transportation (If being transported by road)
- Transporter ID, Transport Document Index and date on the document should be present if the shipment is being sent by railways or by air transport.
To create an e-way bill online, you can log in to http://ewaybill.nic.in/ with your registered User ID.
Alternatively, you can use their SMS option to create an e-way bill. There are certain preset SMS codes you will have to use to either generate, modify, or delete e-way bills.
Examples of SMS codes:
EWBG/EWBT for Eway Bill Generation
EWBV for updating vehicle registration details
When should eWay Bill be issued?
Generally, an eway bill is generated when the value of the goods that are being shipped is more than Rs 50,000 and –
1) Any sender, receiver or transporter should generate an e-way bill if the transport of goods/shipment is being done on their own transport vehicle or through hired transport vehicles.
2) Any unregistered person who is sending a shipment of goods to a GST registered person. Here, however, it is the registered recipient who will have to initiate the e-way bill as the sender is not registered under GST.
3) If neither the sender nor the receiver generates an e-way bill, then it is the responsibility of the transporter to generate a bill. This, however, is only valid when the shipment is being transported via road travel.
But in a few cases, an e-way bill will have to be registered even when the value of the shipment is under Rs 50,000. Those conditions are:
1) Inter-state movement of goods by the Principal to the Job worker.
2) When handicraft goods are being transported from one state to another and when the supplier, in this case, is exempted from GST registration.
Different parts of an e-way bill explained
The e-way bill consists of 2 parts. Part A and Part B. Everything that the sender/receiver/ transporter should fill out while raising a GST bill in Part A:
- GSTIN of sender and receiver or the receiver if the sender is not registered
- Place of origin (from where the shipment is being sent)
- Place of delivery
- Value of the shipment
- HSN code
- Reason for sending the goods
If the shipment is sent by an e-commerce supplier, then the e-commerce operator will have to raise an e-way bill.
Part B of the e-way bill is to be filled out when the supplier is shipping the goods either through their own vehicle or through hired modes.
Part B consists of the transporter number and the registration number of the vehicle carrying the shipment.
Cases when eWay bill is not required
The consignee, consignor, or the transporter is exempted from producing an e-way bill when:
- The value of the shipment is less than Rs 50,000
- When the goods that are being shipped are exempted from GST (Live animals, meat, Fruits & vegetables, plants, milk products, unprocessed tea leaves and coffee beans, unprocessed wheat, unprocessed rice, unbranded rice, materials related to education like books, stationery etc.)
- When goods are being sent to destinations inland after being cleared by the customs department at ports and airports.
- Transport of goods as specified in Annexure to Rule 138(14) of the CGST Rules, 2017.
- When the goods are transported using non-motorized means. For example: Bullock carts, horse carts, or hand-pulled carts.
- When the sender transports goods accompanied with a delivery challan to or from the place the business and a weigh-bridge at a distance of 20 kms.
- Goods being transported by rail where the sender of goods is the Central Government, State Governments or a local authority.
- When goods are being transported from one customs depot to another one.
- When empty cargo containers are being transported.
- When the transported goods carry a custom’s seal.
- When the point of origin of a shipment is either in Nepal or Bhutan.
- When the ministry of Defence is either the sender or the receiver of the shipment.
Please note that the Part B of the eway bill is not required for Intra-state transport where the distance between the sender or receiver and the transporter is less than 50 km.
Documents required to generate eWay Bill
When using road transport:
- Invoice of the shipment (a bill or delivery challan)
- Transporter ID or vehicle number
- The transporter should be able to produce a copy of the e-way bill number upon request at check posts. They can either show a physical copy of the e-way bill or they can map the eway bill number to the RFID.
When using Rail/Air/ship:
- Invoice of the shipment (a bill or delivery challan)
- Transporter ID, the transport document number and date on the document
How long is an e-way bill valid?
Eway bill’s validity depends on the nature of shipment that is being transported. The main variations that affect the validity of an eway bill are:
1) Cargo that is not Over Dimensional
2) Over Dimensional Cargo
Cargo that is not Over Dimensional:
If the distance that it is being shipped for is less than 100 km, the validity of the bill is for 1 day.
In cases where the distance is more than 100km, for every 100km of distance or part thereof, 1 day’s validity gets extended for the eway bill.
Over Dimensional Cargo:
If the distance that it is being shipped for is less than 20 km, the validity of the bill is for 1 day.
In cases where the distance is more than 20km, for every 20km of distance or part thereof, 1 day’s validity gets extended for the bill.
Penalties when e-way bills are not generated?
The government relies on E-way bills to ensure that all the transported goods are accounted for, and the tax-related to it is properly paid for by the taxpayers. When goods are being moved without the bills, the goods might be seized and the tax department might levy charges.
When the movement of goods is without an e-way bill, the penalty levied is higher of the following – the tax amount that was attempted to be evaded or a flat fine of Rs 10,000
When the shipment is inspected and a valid eway bill is not found, the goods could be seized by the inspecting authorities until the fines are fully paid. The goods will remain seized until the owner of the goods pays 100% of the fine or 50% of the value of the goods.
There are cases where the goods in the shipment and the vehicle used for transporting the shipment could be detained for a significant amount of time.
EWay Bill Frequently Asked Questions (FAQs)
1) Where can I register with the Eway bill system?
You can go to https://ewaybillgst.gov.in/ to register and generate e-way bills
2) Do all transporters need to be part of the eway bill system?
Transporters who are not under the GST act will have to register in the eway bill portal to get a unique 15-digit transporter ID when transporting goods.
3) Can I modify my e-way bill? I have entered an incorrect delivery address.
Once an e-way bill is created, it cannot be changed. You will have to create a new e-way bill with the right information.
4) What is the validity of e-way bills?
The validity of the e.way bills depends on the nature of the goods that are being shipped. Please refer to the ‘How long is an e-way bill valid for?’ section in the article to get more insights on this.
5) Can I send goods to a person who is not registered under GST?
Yes, you can. When creating the eway bill, ensure that you mention “URP” in the GSTIN column. URP stands for Unregistered Person