Businesses will soon face the next big regulatory upheaval since the launch of the Goods and Service Tax (GST) Manufacturers and suppliers that engage in the movement of goods valued at more than Rs. 50,000 or a distance greater than 10 kilometers will have to start generating e-Way bills. The e-Way bill replaces the old way bill that was a nightmare for suppliers in the pre-GST era. The e-Way bills system for intra-state movement of goods will be implemented from 1st June 2018. Globally, businesses continue to rely on an invoice for transporting goods, which is mostly in an electronic format. This invoice, issued by the seller, acts as proof of sale and the transporter is required to carry a copy of it.
In the pre-GST era, the supply of goods could not take place without obtaining these ‘Way bills’ from VAT authorities. A way bill was a physical document that allows movement of goods. Different forms had to be filled for transporting goods to different states. Manual issuance of way-bill booklets resulted in harassment by tax authorities and boosted corruption, so a few years ago states like Karnataka and Andhra Pradesh computerized it. That is how the way-bill became electronic. Under GST, the way bill will be replaced by an e-Way bill which aims at mitigating, the problems caused by way bill compliance as this will be digital.
Some of the major differences, between the way bill and the e-Way bill include:
- Relevant details in Form GSTR-1 gets auto populated on the basis of details furnished in the e-Way bill generation process. This was not possible with the old way-bill.
- Harmonized system of nomenclature (HSN) to be mentioned on e-Way bill, resulting in additional compliance. There was no requirement for HSN codes in the old way bill system.
- Recipient’s acceptance of the e-Way bill is required within 72 hours of generating the bill. No such requirement needed in the way bill.
- It is mandatory for transporters to register themselves in the e-Way bill system, while it was optional for them to do so in the old way-bill.
A key positive, is that businesses, will now have to deal with a standardized e-Way bill form for transporting goods across the country.
So, let’s quickly dive into some important points surrounding the e-Way bill:
Pre-requisite to generate e-Way bill: e-Way bill will be generated when there is a movement of goods of value more than Rs. 50,000.
- In relation to a ‘supply’
- For reasons other than a ‘supply’ (say a return)
- Due to inward ‘supply’ from an unregistered person
- For this purpose, a supply may be either of the following:
- Sale of goods and payment made
- Transfer – branch transfers for instance
- Barter/Exchange – where the payment is by goods instead of in money
Therefore, e-Way bills must be generated on the common portal for all these types of movements.
Who can generate an e-Way bill: The e-Way bill can be generated by the following entities
- Registered Person – e-Way bill must be generated when there is a movement of goods of more than Rs 50,000 in value to or from a Registered Person. A Registered Person or the transporter may choose to generate and carry e-Way bill even if the value of goods is less than Rs 50,000.
- Unregistered Persons – Unregistered persons are also required to generate e-Way Bill. However, where a supply 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 – Transporters carrying goods by road, air, rail, or ship need to generate e-Way Bill if the supplier or receiver has not generated an e-Way bill.
When e-Way bill is not required: In the following cases, it is not necessary to generate e-Way bill:
- Transport of specified goods as mentioned in Annexure t Rule 138(14) of CGST Rules, eg. Vegetables, food items, used personal and household effects etc.
- The mode of transport is non-motor vehicle
- Goods being transported from port, airport, and air cargo complex or land customs station to Inland container depot (ICD) or container freight station (CFS) for clearance by customs.
- Transport of certain specified goods.
- Consignment value less than Rs. 50,000
e-Way bill format: The e-Way bill format in GST comprises of 2 parts
- Part A: The Part A of the e-Way bill aims to collect details of consignment which include the following:
- Details of GSTIN of recipient, place of delivery (PIN Code), invoice or challan number and date, value of goods, HSN code, transport document number (Goods Receipt Number or Railway Receipt Number or Airway Bill Number or Bill of Lading Number) and reasons for transportation.
- Part B comprises transporter details (Vehicle number in which goods are transported).
e-Way bill validity: An e-Way bill is valid for periods as listed below, which is based on the distance travelled by the goods. Validity is calculated from the date and time of generation of e-Way bill.
|Distance||Validity of EWB|
|Less Than 100 Kms||1 Day|
|For every additional 100 Kms or part thereof||additional 1 Day|
Updating Vehicle Number on e-Way bill: Vehicle number is an optional field when generating e-Way Bill. But, e-Way Bill without a vehicle number is not valid for movement of goods. The e-Way bill portal provides an option of updating vehicle number on the document.
Cancelling an e-Way bill: If the goods were never transported or are not transported as per the details in the e-Way Bill, then the generator of the e-Way bills can cancel it as below:
- The time-limit to cancel is within 24 hours of generating the e-Way bill.
- Once canceled, it is illegal to use the e-Way bill.
- If the e-Way Bill is verified by any empowered officer it cannot be canceled.
Modes of generating an e-Way bill: An e-Way bill can be generated by a registered person using the following methods:
- Web based system, bulk upload facility, SMS based facility, Android App, site-to-site integration & Goods and Services Tax Suvidha Provider.
“Bill to” and “Ship to” Model: Only one e-Way bill is required if the legal entity on the “Bill to” and “Ship to” is the same even if the addresses for billing and shipping are different. However, if the legal entity in the “Bill to” and “Ship to” are different then two e-Way bills need to be generated. This is required to complete the cycle of transactions. Taxes will change for inter-state transactions.
Consequences for non-compliances of e-Way Bill:
Penalty of Rs. 10000/-
An amount equivalent to the tax evaded
Handling the Change: While there is little doubt that the e-Way bill is a step towards streamlining the cumbersome erstwhile processes, it also enforces a degree of compliance and change management on manufacturers and suppliers. An ERP, plays an important role in managing this new change. What’s needed is an ERP solution that is robust and simple enough, to tackle the e-Way bill related aspects. EPPS ERP can manage the complexities of e-Way bill easily. With EPPS ERP, it is easy to create, update and cancel an e-Way bill. Our solution supports, easy integration with the e-Way bill portal through the e-Way bill API thus making it convenient for you. While generating sales invoice, purchase returns our solution provides all relevant e-Way bill related fields/inputs to the user in our application, to facilitate the e-Way bill transaction be it creation, updation or cancellation. While this might sound complicated, generating an e-Way bill within the EPPS system is as easy as this-
- Step 1: Select your Transporter -> Add Truck No -> Add Distance
- Step 2: Click to Generate e-Way Bill
Click here if you are looking for a simple and integrated solution that can help you, embrace the new change efficiently with ease.