E Way Bill

By nadeem

Simplifying the Complexities of E-Way Bill & the need for the same.

Chapter 1:

What is Eway Bill & why is it required?

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Intro: E-Way Bill

E-Way Bill is the abbreviation form of Electronic Way Bill. It is a unique document/bill, which is electronically generated from GST Common Portal by registered persons or transporters for the movement of specific consignment/movement of goods within or between the states and of value more than INR 50,000, as required under the current GST regime.

[Note: The Limit for intra-state movement is different for different states. Please refer to the Illustration for the same.]

Why E-way Bill is Importnant:

E-way Bill is considered an extremely crucial test for avoiding tax evasion under GST. The government is also taking considerable efforts to get the mechanism working on a full-fledged basis. Thus, to avoid the detention E-way bill needs to be generated before the commencement of movement in case of transportation of goods through road.

Who should Generate an eWay Bill?

Registered Person – A Registered person or the transporter is required to generate Eway bill when there is a movement of goods of more than Rs 50,000 in value. He may also choose to generate and carry e-way bill even if the value of goods is less than Rs 50,000.

Unregistered Persons – Even unregistered persons are required to generate e-Way Bill. In case a transportation is made by an unregistered person to a registered person, the receiver will have to ensure all the compliances are met as if they were the supplier.
Transporter – If Transporters are carrying goods by road, air, rail, etc. will also need to generate E-Way Bill if the supplier has failed to do so.

Activities relating to movement of goods usually include following three major parties:

Consignor
Transporter
Consignee

E-way Bill compliance needs to be ensured by such various parties involved in the movement of goods. It is important to understand the responsibilities and complications faced by the transporters as they play an integral role in the E-way Bill system.

Chapter 2:

Responsibilities of a transporter:

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As the person in charge of conveyance, a transporter has to follow the following responsibilities:

Enroll: In order to become part of the workflow on the government portal and undertake e-way bill compliance, it is mandatory for every transporter to get enrolled and obtain a transporter ID.
Carry specified documents: The documents like Tax invoice/bill of supply/delivery challan or bill of entry depending on the transaction, copy of the e-way bill or the e-way bill number generated from the government portal are to be carried along with the goods for any verification.
Generate e-way bill and consolidated e-way bills: In some cases, the transporter is required to generate E-way Bill, If the consignor has not raised the same. The transporter has the option to generate a consolidated e-way bill. In case of multiple consignments in the same conveyance, instead of carrying multiple e-way bills for each consignment.
Ensuring details before entering in the E-way bill: The transporter is required to verify the details entered in the e-way bill before dispatching goods. In addition to it, the transporter has to ensure the details entered about the vehicle before dispatch and, in case of any change in the mode of transport/vehicle, the transporter required to update in Part B of the e-way bill (contains vehicle information) before such change to be done.
Track validity: The transporter is required to supply the goods to their destination within the validity period of the e-way bill. In case of any delay in the duration of transportation, he can/has to extend the e-way bill through the facility available on the government portal or intimate the consignor/consignee to take necessary action.
Reporting detention of vehicle: If transporter’s vehicle gets intercepted for a period exceeding 30 minutes by field officers, the transporter can upload this information on the government portal.
Furnishing vehicle numbers in an invalid format
Failing to furnish a transporter ID
No optimum utilization of the bulk generation facility
Unable to maintain a record of e-way bills generated by the counterparty
Issuing a single e-way bill against multiple invoices

Errors usually made by businesses on the e-way bill portal:

A Validity of e-way bill is based on the distance traveled by the goods which are listed in the table below. Calculation of validity is done from the date and time of generation of the e-way bill;

An option for extending the validity of e-way bill is also available. The generator of e-way bill can either four hours before expiry or within four hours after its expiry extend the validity of e-way bill.

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Chapter 3:

Implication for business in case of non-compliance with e-way bill provisions

As per the provisions of the GST law, not generating and carrying an e-way bill is considered as non-compliance and can result in both monetary as well as non-monetary losses to the taxpayer, as the tax authorities have already started issuing notices to businesses.

Monetary implications

Since the e-way bill is a document that associates with compliance, also an additional requirement after the issuance of an invoice, if tax has already been paid on the basis of an invoice raised then there is no tax-related implication for non-generation of the e-way bill. However, may be the authorities can levy a penalty of 10,000 INR in such case.

If goods are transported without an e-way bill, the authorities can allege that the consignor of the goods sought to evade payment of GST and consequently levy a penalty that is equivalent to the amount of tax payable on the particular consignment or Rs. 10,000 (whichever is higher).

Non-monetary implications

The goods and the vehicle conveying them can be detained or seized if in case, found that goods are being transported without an e-way bill and will be released only on payment of the appropriate tax and penalty specified by the concerned officer.

Non-compliance with the e-way bill provisions may also lead to confiscation of goods and the vehicle conveying the same, in case the person transporting the goods or the owner of goods/conveyance fails to pay the tax and penalty within seven days of detention or seizure.

In short, non-compliance with the e-Way bill provisions can lead to the following consequences:

Working capital blockage

Supply chain disruption

Impact on other GST assessments

Dent to Business Reputation

Linkage of e-way bill with GST Returns:

Curbing revenue leakage is one of the main objectives of the e-way bill provision. Hence, businesses can be expected to receive notices/queries seeking explanations for discrepancies in the data reported in the GST returns vis-à-vis the e-way bill portal, in the near future.

The following points should be considered while reconciling e-way bill data with GST returns:

There is a need to address the differences in the details populated on both the portals based on back-up documentation.
The e-way bills are required to be generated only if the movement of goods are over and above the threshold limit, whereas the data declared in GSTR-1 includes all the supplies regardless of any threshold.
There may be cases where e-way bills are required to be generated, such as for movement of goods on delivery challans; however, the details of such supplies are not reported in GSTR-1.
There is no requirement to issue e-way bills in case of supply of services, whereas the same needs to be duly reported in GSTR-1.
The other concern, apart from the linking of data from the movement perspective, is the reconciliation of the value of supplies considering the credit notes (tax or financial) issued later by the supplier to factor the discounts, deficiency, etc. for the customer.
Lastly, the possibility of linking e-way bills data getting linked with the turnover of a business by the authorities cannot be ruled out.

FAQs:

How many e-way bills are required to be generated to ship a consignment to a customer involving multiple transporters (having different Transporter IDs) in between? How will the one invoice-one e-way bill validation be complied here since the end customer is only one?

One e-way bill needs to be generated against the Invoice. The above situation is known as “Transshipment”. A transporter can also re-assign another transporter by updating the transporter ID on the e-way bill portal. Once transporter re-assigns another transporter, seller cannot make any changes to the assigned transporter. So, the user has to generate different delivery challans against the invoice based on the different Transporter ID, because different e-way bills against a single invoice are not possible and will also cause the problem in populating the data in the GSTR-1.

Is e-Way bill required, if the value of shipment per customer per day exceeds Rs 50,000? How will we take multiple invoices under the single e-way bill?

Here, it depends whether the supplier himself is the transporter or not. If he is the transporter, then he is required to generate the e-way bill for all the invoices but if not, then the transporter will be required to generate the e-way bill against all the invoices in the Vehicle.

Summary:

In view of the significance and importance of E-way Bills and their complexity, businesses need to carefully plan for their proper implementation and execution. They need to bear in mind that seizure of goods or detention of vehicles during transit could lead to disruption in their supply chains.