When a person is registered under GST, they must generate an eWay Bill to transport products in a vehicle that exceeds INR 50,000 in a single invoice/bill or a delivery challan.
The primary objective of the eWay Bill is to provide a common permit for the movement of products across the country.
You issue an eWay Bill or an Electronic Way bill when there is an intra-state and inter-state transportation of products worth more than Rs. 50,000.
An eWay bill contains details of the consignor, goods, the transporter, and the recipient. You can generate the bill through the government portal.
When you generate an eWay bill, you get a unique eWay Bill Number, also known as EBN, which is available to the recipient, transporter, and supplier.
The eWay Bill has been mandatory for inter-state transportation since April 1st, 2018, and for intra-state supplies since April 25th, 2018, in certain states like Madhya Pradesh, Meghalaya, Sikkim, Puducherry, and Arunachal Pradesh).
The eWay Bill was introduced to replace the Way Bill, a physical document that existed during the VAT regime for the movement of products across the country.
Following are the objectives of the eWay Bill under GST –
eWay Bill reduces tax evasion with proper invoicing of the products and stops the bogus invoicing of the products.
With an eWay Bill, tracking goods is possible with robust technology like Radio Frequency Identification Devices (RFID).
Normal eWay Bill
You generate a Normal eWay Bill when there is the transportation of goods with one type of HSN.
Bulk eWay Bill
Bulk eWay Bill is generated when there is the transportation of a variety of goods with multiple HSN codes.
You can generate an eWay Bill electronically once you have completed the form GST EWB-01.
eWay Bill comprises two parts – Part A and Part B.
Part A of the eWay Bill collects the details of the consignment. Following details must be filled in Part A of the eWay Bill –
GSTIN of Recipient
The recipient of the products will have to provide a GST Identification Number.
Place of Delivery
You must provide the pin code of the place where the consignment is to be delivered.
Invoice or Challan Number
You will have to fill in the challan number or your GST Invoice number of the supplied goods. You can learn more about GST Invoice in our Blog post on “All about the GST Invoice”
Value of Goods
You are required to fill in the total value of the consignment of the goods in the form.
HSN Code, also known as Harmonized System of Nomenclature code of the transported consignment of goods, must be filled in eWay Bill. If the turnover is up to Rs. 5 crores, then you must mention the first two digits. However, if the turnover is over Rs. 5 crores, then you can mention the first four digits of the HSN code in the form.
Reasons for Transportation
You will have to select the appropriate reason for transporting a consignment of goods from the list of predefined reasons.
Transport Document Number
You will have to fill in the Airway Bill Number / Railway Receipt Number / Bill of Loading Number / Goods Receipt Number.
In Part B of the eWay Bill, you will have to enter the vehicle number to transport the goods. The transporter can complete this information in the common portal.
You generate an eWay Bill when there is a movement of products conveying a value of more than 50,000 INR.
You can issue an eWay Bill under the following situations –
When there is a supply
Reasons other than a supply (return of goods)
Because of inward supply from an unregistered person
A supply can be of the following –
Supply of goods made for a payment in the course of business.
Supply of products for payment which may not be for a business transaction.
Supply of goods without charges.
Supply usually means –
Sale – sale of goods in exchange for payment
Barter/Exchange – Where both the parties exchange goods instead of money
Transfer – When the branch transfers products
You generate an eWay Bill for non-supply transactions like the return of goods, job work, line sales, export/import, sale on approval basis, semi or completely knocked down supply, supply of goods for exhibition, and goods used for personal consumption.
eWay Bill should be generated where there is a movement of products worth more than Rs. 50,000 across the country. A registered person or transporter can choose to generate an eWay bill even if the value of goods is less than Rs. 50,000.
Unregistered people also have to generate an eWay Bill. When an unregistered person makes a supply to a registered person, the receiver must ensure that all the compliances are considered as if they were the suppliers themselves.
Transporters who carry goods by air, rail, road, etc., also have to generate an eWay Bill if the supplier has not generated one.
If the transporters are unregistered, they get a Transporter ID when they enroll on the eWay Bill portal post, which they can generate eWay Bill.
When a transporter is transporting several consignments in a single-vehicle, they can use GST EWB-02 form to produce a consolidated eWay Bill; they can do that by providing the individual eWay Bill numbers to each consignment.
If both the consignee and the consignor have not produced an eWay Bill, they can fill out the details in Part A of form GST EWB-01 based on the bill/invoice of delivery/supply challan given to them.
In the following cases, you need not generate an eWay Bill-
When the mode of transportation is a non-motor vehicle, the generation of eWay is not required.
You need not generate an eWay Bill when goods are transported under customs seal or customs supervision.
When transit cargo is being transported to or from Bhutan and Nepal, the generation of the eWay Bill is not required.
The eWay Bill is not needed when products are transported under customs bond to a custom port from IC or one customs station to the other.
Transportation of goods caused by defense formation under the Ministry of Defence as a consignee or consignor does not require the generation of an eWay Bill.
Some goods that are specified as exempt from eWay Bill requirements in the Union/State territory GST rules do not need an eWay Bill.
Empty cargo containers being transporters do not require eWay Bills.
Consignor transferring goods to or from a place of business at a distance of 20kms, accompanied by a delivery challan, does not require the generation of an eWay Bill.
Goods transported by rail when the consignor is local government, state government, and the central government does not require an eWay Bill.
You need not fill Part B of the eWay Bill where the distance between the consignee or consignor and the transport is less than 50km, and the transportation is within the same state.
The validity of an eWay Bill is based on the distance traveled by the consignment of the goods. You can calculate the validity from the time and date of the generation of the eWay Bill.
For Over Dimensional Cargo
When the distance is less than 20kms, the eWay Bill will be valid for one day.
For every additional 20kms or part thereof, the validity of the eWay Bill increase by each day.
Other than Over Dimensional Cargo
When the distance is less than 100kms, then the eWay Bill will be for one day.
For every additional 20kms or part thereof, the validity of the eWay Bill will increase with each day.
Following are the documents/details that are required to generate eWay Bill –
Bill of Supply / Invoice / Challan concerning the goods being transported.
If the transport is by air/rail/ship, the documents required are transport document number, transporter ID, and date on the document.
If the transport is by road, the documents and details needed are vehicle number or transporter ID.
If the eWay Bill is generated; however, if the goods are not yet transported or goods are not transported according to the details in the Bill, then the eWay Bill can be canceled through the GST facilitation center or on GST Portal.
You can cancel a GST eWay Bill within 24 hours of its generation. Although you can’t cancel a GST eWay Bill if you had it verified in transit.
If there is a consignment without an eWay Bill, the concerned person must pay a penalty of 10,000 INR or the equal amount of the tax evaded (whichever is the greater of the two).
The system of eWay Bill has come a long way with its new amendment on April 1st, 2019, of auto-populating the route based on the pin code of the recipient and the supplier. The facility to extend the eWay Bill while goods are in transit has made the system more user-friendly.
The core aim of this mechanism is to offer an integrated facility across the nation which would ease the transportation transactions amongst recipients and suppliers, which was successful to a great extent.
Despite the several cons that come along with this system, the eWay Bill system has helped the administrative authorities greatly to keep an eye on the value of the consignment of goods being transported across the nation, especially when there is an interstate transaction. The system has vastly helped many tax evasions that were prevalent before this system.