Oct 20,2022 | 12 min read

All you need to know about E-way bill

Introduction:

 

This bill is also known as an electronic way bill. It is a document which is required under the new GST regime when the products valued more than Rs 50,000 are moved or shipped within or across states. It is a kind of bill number which is specific for one specific consignment involving the transportation of goods. The e-way bills can be issued for the sale, exchange of goods, supply and transfer etc.

 

Under the GST portal, an individual has to generate the E-way bill. Those who are  registered GST persons and the sender of the goods or transporter can generate this bill. In case where the supplier forgets to generate the bill the transporter in that case can do so. An unregistered person can also generate the bill. 

 

The creation of e-way bills can be done using a single interface. The bill can be created in two different ways.

  1. Through the unique number provided when registering for the GST, the GSTIN.

  2. The next approach is for unregistered taxpayers. They must enter a URP for them in the GSTIN column of the GSTIN. Before the movement of goods, an e-way bill is generated.

 

There are several circumstances in which the E-way is not necessary, such as when items are transported by non-motorized vehicles, if commodities are transferred from the airport, through customs, to an inland container depot or container freight station for customs clearance and are then moved under their watch or seal, carried to Nepal or Bhutan as transit cargo, goods that the ministry of defence transports or receives, when a local, state, or federal agency is responsible for the transportation of products, merchandise exempt from E-way bill under state/union regulations. These are the situations in which E-way is not necessary.

 

E-way bills have a validity period, and that validity depends on the distance. When creating the electronic waybill, the distance must be mentioned. If the distance is less than 100 km, the bill is valid for one day starting on the day it is generated. Thereafter, for every 100 km, the bill's validity is increased by one day, and so on. Four hours before or within four hours after the e-way bill expires, the bill's validity may also be extended.

 

Financial losses and the impoundment or seizure of the vehicle are the repercussions if the e-way will is not prepared or issued when required. It is illegal to transport products from one state to another without an invoice and an e-way bill. A person is responsible for the Rs. 10,000 fine and the tax that is being attempted to be dodged. If a vehicle is moved without an e-way bill, it may also be held or seized and released only after paying the applicable tax and penalty.

 

Once an E-way bill has been created, it cannot be changed or amended. On the other hand, an e-way bill that was generated using false information can be cancelled. A bill can only be cancelled twenty-four hours after it is produced. Once it has been cancelled, the e-way bill cannot be used again. A bill that has been confirmed by an authorised official cannot be cancelled.

 

Before the GST way bill was included in the VAT, each state set its own requirements for generating the way bill and made it challenging to follow them. E-way bills are accepted throughout India. It creates uniformity. The quantity of interstate goods transportation has increased after the e-way bill's implementation. Some people are excused from creating e-way bills in order to provide relief when a financial threshold is not reached or on a certain list of goods.

 

Penalties: 

 

Wherever required, e-way bills must be issued in accordance with the provisions of Rule 138 of the CGST Rules, 2017, otherwise they will be considered to be in breach of the rules. According to Section 122 of the CGST Act of 2017, a taxable person who transports any taxable goods without the cover of specific papers (an e-way bill is one of the listed documents) is subject to a fine of Rs. 10,000 or the tax intended to be evaded (where applicable), whichever is greater.

 

Any person who violates the provisions of this Act or the rules made thereunder by transporting or storing goods while they are in transit is subject to detention or seizure of all such goods and any conveyance used to transport the said goods, as well as documents relating to such goods and conveyance, in accordance with Section 129 of the CGST Act, 2017.

  

Consequences of Non- Generation of  E-way bill-

Both monetary and non- monetary loss can be a result of not generating and carrying e-way bills. Therefore, the goods that move without carrying an e-way bill may face the following consequences-

  • Monetary Penalty-

On goods travelling without cover of an e-way bill, a minimum penalty of 10,000 or the tax that can be evaded, depending on which penalty is greater, may be levied.

  • Detention and seizure-

Any moving vehicle that isn't covered by an e-way bill can be stopped and held; it can only be released after the officer has collected the fine or tax that was specified. There are two possible outcomes: first, if the owner is more inclined to pay the penalty, he must pay the full amount of the tax due; second, if the tax is not paid, the amount of the penalty will be equal to 50% of the value of the items. If the fine is not paid within the allotted time, it is possible that the owner and the vehicle carrying the items will both be impounded

  • Increased attention from the GST authority-

The movement of such taxpayers is traced when the GST authorities seize the taxpayer who has disregarded the e-way bill's requirement, in order to prevent a repeat offence. The officers of the GST department have the right to request a reconciliation statement outlining the purchases listed in the GST return and an e-way bill. Any discrepancy between the two sets of data may cause the GST registration to be cancelled or suspended.

  • Supply – Chain Obstruction-

If the e-way bills requirement is not followed, the supply chain may become impeded, which could have an indirect impact on the production system because raw materials may not be available.

  • Fall in Business Revenue-

This is one of the main effects of the lack of e-way bill creation. As the lack of raw resources will have an impact on the production system. The ineffective production system will cause the business's income to plummet.

  • Impact on Goodwill-

If an owner regularly violates an e-way bill provision, the GST authorities will have to take action against that owner, and as a result of the litigation the GST authorities conduct, the owner's reputation and goodwill would be adversely impacted.

 

Persons who should generate an eway bill-

  • Registered person- A registered person must generate an e-way bill whenever goods worth more than Rs.50,000 are moved. The transporter or the registered person may decide to generate and carry the e-way bill even if the value of the commodities in motion is less than Rs.50,000.

  • Unregistered person- The unregistered person necessarily generates  and carries the e-way bill. However, when an unregistered person supplies anything to a registered person, it is the receiver's responsibility to make sure that all compliance requirements are followed, just as if they were the supplier.

  • Transporter- It is the responsibility of the transporter who is transporting the products by road, air, or train to generate and carry the e-way bill in the event where the goods' supplier has not produced one.

 

Cases where e way bill is not required-

  • When non motor vehicle is used as a mode of transport

  • When the cargo is transported to or from Nepal or Bhutan

  • When the goods are transported under the seal of  custom or supervision of custom

  • Transportation of empty cargo containers

  • Those goods that are transported from ICD to Customs under customs bond or from one custom station to another

  • Transportation of goods from Custom port, airport, air cargo complex or land custom station or Inland Container Depot (ICD) or Container Freight Station (CFS)  for clearance by Custom.

  • When the defense formed under ministry of defense causes the movement of goods

  • When the transportation of goods is done by the central government , state government or local government through rail,

  • Goods that have been exempted from the requirement of the e-way bill according to the state/union territory GST rules.


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ABOUT THE AUTHOR


Jigar Shah

Mr. Jigar Ramesh Bhai Shah is qualified as a Lawyer, Chartered Accountant (Intermediate) and company secretary (Intermediate) with an immense professional experience. Wide experience of Income tax and accounts since the year 2002 from income tax return filing to litigations to court, everything is included. Handle notice issue and advice issue especially for income tax, financial cases, commercial, account, GST, Land, property matters, General assistance for litigation and non litigation matter.

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