E-way bill

The system of E-way bills will play a crucial role in making GST an effective weapon and make strong its positive impact on the Indian economy. The credo of ‘One Nation, One Tax and One Market’ is the target of the system.

What Is E-Way Bill?

E-way bill refers to Electronic Way Bill. It is a document needed to be carried by transporters while moving consignments costing value of over Rs. 50,000 from one place to another. The

E-way bill can be generated on the E-way Bill portal by the transporter or a registered person.

On the generation of E-way bill, a unique E-way Bill number will be generated that is available to the transporter, supplier, and recipient.

When Is E-Way Bill Required?

E-way bills have to be issued when the value of goods to be transported is over Rs.50,000. E-way bills will be issued in case of 1) supply of goods, 2) the return of goods or 3) when receiving supplies from an unregistered person.

For certain specific goods, the E-way bill must be generated compulsorily, even if the value of the consignment is less than Rs.50,000. Examples are:

• Interstate movement of goods to job workers
• Interstate transport of handicraft goods by a dealer exempt from GST registration

E-way bills are needed for both interstate and intrastate transport. But intrastate movement value for E-way bill may vary from state to state. For instance, the limit for the e-way bill for intrastate movement is Rs.1 lakh in the state of Delhi.

 Who Issues An E-Way Bill?

The e-way bill can be issued by registered receiver/supplier and transporter or unregistered person in case the receiver or supplier are not registered.

• Registered Receiver/ Supplier

It is mandatory to generate an e-way bill when there is a movement of goods of more than Rs. 50,000 in value. A transporter or supplier may generate an e-way bill even if the consignment is worth less than Rs. 50,000.

• Unregistered persons

It is necessary to generate an E-way bill when supply is made by an unregistered person to a registered person provided that the receiver will have to ensure the meeting of all compliance needs.

• Transporters

Transporters who are carrying goods by air, rail or road are also required to generate E-way bills if the supplier has not done so.

 When Is E-Way Bill Not Required?

E-way bill is not needed in several situations:

• Case of goods transported from the airport, port, air cargo complex or terrestrial customs station to Container Freight Station (CFS) or ICD (Inland Container Depot) for customs clearance.
• Transit cargo from or to Bhutan and Nepal.
• Goods moved with Customs bond from ICD to any customs port.
• If the mode of transport is a non-motor vehicle.
• Goods transported as per customs seal or under customs supervision.
• Transport of empty cargo containers.
• Goods being transported by rail where the sender of goods is the local authority, state government or central environment.
• Case of movement of goods as a result of defence formation by the Ministry of Defence as receiver or sender.
• Case of goods moved to a weighbridge inside 20 km and returned to the business place by which is covered through a delivery challan.
• Transport of specific goods, including a list of exempt supply of goods as per Annexure to Rule 138 (14) and goods treated as no supply as per Schedule III.
• Goods exempt from E-way bill needs as per GST rules of respective State/ Union Territory.

How E-Way Bill Will Impact GST

When GTS was launched in July 2017, it was surrounded by confusion and chaos. Many doubted its ability to enhance the ease of doing business in India.

Despite such uncertainties, GST has entered its 3rd year of implementation. Taxpayers are becoming familiar with GST provisions.

In April 2018, the government rolled out the E-way bill system for inter-state transactions. Soon after, the government-mandated E-way bills for intra-state supplies also.

E-way bill system has been showing positive impact as GST revenue (Centre and State) rose to Rs. 96, 483 crores in July 2018 as compared to Rs. 95, 610 crores in the previous month.

Purpose Behind E-Way Bill

The government introduced the E-way bill as a masterplan for curbing tax evasion and to bring more transparency to the taxation system. Transporters are mandated to carry E-way bill number and invoice copy during the transport of goods.

While many taxpayers were filing GST returns, taxpayers were under-reporting the sales and avoiding taxes. Because the E-way bill is mandatory not just in supply but in the movement of goods, the government can monitor all transactions where goods moved, but taxpayers did not report in GST returns.

The Future

With the steady progress in the E-way bill system, GST regime is all set to travel at maximum speed on a robust digital pathway.

The government has incorporated needed checks at different places, to match the data between E-way bills and GST returns filed by the taxpayers (GSTR 3B and GSTR1), every quarter/ month.

Because taxpayers have to fill E-way bills electronically and hand over a copy to the transporter, the whole process will be quicker and error-free.

One of the major drawbacks of the VAT and service tax regime was the role of tax inspectors in the physical inspection of vehicles and goods. The vehicles would be stopped at checkpoints for inspection during movement, which would enhance delivery time and overall cost of production.

Under the GST regime, the government has promised minimum physical interference which will ensure seamless movement of goods around the country. This implies that vehicles

would not be stopped at checkpoints or while in transit to inspect documents or goods.

Benefits

Some of the major benefits of the E-way bill system are:

• Effective dissolution of state borders
• Reduction in documentation
• Reduction in logistics costs

Conclusion:

E-way bill payment system will play a crucial role in making GST a powerful weapon and strengthen its positive impact on the economy. India is fast approaching the horizon of ‘One Nation, One Tax, One Market.