Understanding e Way Bill and GST Compliance Rules
The Indian government has implemented a new system for tracking the movement of goods called the E-way Bill. This system, which is mandatory under the Goods and Services Tax (GST) regime, aims to increase transparency and reduce tax evasion. This article will provide a comprehensive overview of the E-way Bill and GST compliance rules and how businesses can ensure compliance.
What is e-Way Bill?
E-way bill is an electronic document under GST regime used for tracking goods in transit. It’s generated on the E-way Bill Portal and is mandatory for transportation of goods.
e-Way Bill Process
- Begin E-way bill registration by having your GSTIN and mobile number ready.
- Access the E-way Bill Registration page and input your GSTIN before clicking “Go.”
- Once your request is submitted, you’ll be taken to the registration form, where key details will be pre-filled, including your name, trade name, address, and mobile number.
Why is an e-Way Bill Required?
An e-Way bill permits the movement of goods worth more than Rs. 50,000, both inter-state and intra-state. It’s mandatory for all goods except those exempt under specific rules or notifications. In Delhi, an e-Way bill is required for goods exceeding the value of Rs. 1 Lakh. This electronic document ensures the seamless transportation of goods and facilitates better tax compliance monitoring.
How to Generate an e-Way Bill?
An E-way Bill is an electronic document generated on the GST Common Portal. Businesses can also create E-way Bills through the SMS or mobile app provided by the National Informatics Centre (NIC). Before generating an E-way Bill, businesses need to provide certain details about the goods being transported and information about the transporter, consignor and consignee. These details include information such as the type and quantity of goods, the vehicle number, and the GSTIN of the parties involved.
GST e-Way Bill Rules?
In addition to the E-way Bill, businesses must comply with various GST compliance rules. These include:
Filing GST returns:
Businesses will need to file GST returns regularly. At the same time, It will include the GST paid and collected on sales and purchases.
Maintaining proper records:
Businesses will need to maintain proper records of all transactions related to GST. It will include invoices, bills, and other relevant documents.
What’s the validity of e-Way Bill in India?
The validity of an e-way bill is determined by the distance the goods will be travelling, as outlined below. The validity calculation begins from the date and time the e-way bill is generated.
In India, the validity of an e-way bill is determined by the distance the goods will be travelling, as outlined by the GST council. The validity calculation begins from the date and time the e-way bill is generated.
For non-over dimensional cargo, an e-way bill is valid for:
- Less than 200km: 1 day
- For every additional 200km or part thereof: an additional day
For over-dimensional cargo, an e-way bill is valid for the following:
- Less than 20km: 1 day
- For every additional 20km or part thereof: an additional day
It’s important to note that an e-way bill is a document required to be carried by the person in charge of the conveyance carrying any consignment of goods exceeding INR 50,000 in road, rail, air or vessel transport. And it ‘sit’s mandatory to generate an e-way bill for the movement of goods exceeding INR 50,000.
To generate an e-way bill, you can use the e-way bill portal provided by the GSTN or software that provides an e-way bill online generation facility. You’ll need to provide details of the goods being transported, the vehicle used for transport, and the consignor and consignee information.
Obtaining GST registration:
Businesses must obtain GST registration if their annual turnover exceeds INR 20 lakhs.
Who Should Generate an E-way Bill in India?
A registered person, or the transporter, must generate an E-way Bill when there is a movement of goods of more than INR 50,000 to or from a registered person. However, even if the value of goods is less than INR 50,000, a registered person or the transporter may choose to generate and carry an E-way Bill.
Unregistered persons are also required to generate an E-way Bill. However, when an unregistered person makes a supply to a registered person, the receiver must ensure all the compliance is met as if they were the supplier.
Transporters who transport goods by road, air, rail, etc., must generate an E-way Bill if the supplier is also required to generate one. However, there is an exception for transporters carrying consignments whose individual value (single document) is less than or equal to INR 50,000. But if the total value of all the documents combined exceeds INR 50,000, then the transporter will have to generate an E-way Bill. Unregistered transporters can obtain a Transporter ID by enrolling on the E-way Bill portal. Once they have the ID, they can then generate E-way bills.
- Every registered person under GST must fill out Part A of Form GST EWB-01 before the movement of goods.
- A registered person who is a consignor or consignee (mode of transport may be owned or hired) or is the recipient of goods must fill out Part B of Form GST EWB-01 before moving goods.
- A registered person who is a consignor or consignee and goods are handed over to the transporter of goods must fill out Part B of Form GST EWB-01 before the movement of goods and furnish the information relating to the transporter.
- Transporters of goods must generate an E-way bill based on the information shared by the registered person in Part A of Form GST EWB-01 before the movement of goods.
- An unregistered person under GST and the recipient is registered must comply with the rules as if they were the supplier.
Note: If a transporter is transporting multiple consignments in a single conveyance, they can use Form GST EWB-02 to produce a consolidated E-way Bill by providing the E-way Bill numbers of each consignment. If both the consignor and the consignee still need to create an E-way Bill, then the transporter can do so by filling out Part A of Form GST EWB-01 based on the invoice/bill of supply/delivery challan.
Cases When an E-way Bill is Not Required
An E-way Bill is not required in the following cases:
- Transporting goods by non-motor vehicle
- Transporting goods from a Customs port, airport, or land customs station to an Inland Container Depot or Container Freight Station
- Transporting goods under Customs supervision or seal
- Transporting goods under Customs Bond from one station to another
- Transit to or from Nepal or Bhutan
- Movement of goods by defence formations under the Ministry of Defense
- Transporting empty cargo containers
- Transporting goods to or from a weighbridge within 20km with a Delivery challan
- Transporting goods by rail with Central Government, State Government, or local authority as a consignor
- Transporting goods that are exempt from E-way bill requirements in GST Rules of the State/Union territory
- Transporting certain specified goods, including exempt supply of goods, goods treated as no supply and certain schedules to Central tax Rate notifications -Note: When the distance between the consignor or consignee and the transporter is less than 50 km, and the transport is within the same state, Part B of the E-way Bill is optional.
In India, State-wise E-way Bill Rules and Limits
The implementation of the E-way Bill system for the inter-state movement of goods has seen a rise in numbers since its implementation began on April 1, 2018. Each state and union territory has implemented the E-way Bill system to move goods within the state or union territory.
However, some states have provided relief to their residents by exempting them from generating an E-way Bill in cases where the monetary limit of the items falls below a certain threshold amount or for certain specified items.
In conclusion, the E-way Bill and GST compliance rules aim to increase transparency and reduce tax evasion. Businesses can ensure compliance by generating E-way Bills, filing GST returns, maintaining proper records, and obtaining GST registration. By following these rules, businesses can ensure compliance with GST laws and avoid penalties.