E-way Bill – Value of Individual Bill or Aggregate of Bills- HC judgment Analysis

An analysis on the Judgment of the Hon’ble High Court of Kerala in the case of Bon Cargos Private Limited Vs Assistant State Tax Officer, W.A. No. 1735/2020 and 1736/2020 Dated 21/12/2020 on the issue of Value of Invoice for E-Way bill.

The general impression on this judgment is one to the effect that “E-Way Bill is mandatory where value of each Invoice individually is lower than ₹ 50k but in aggregate it exceeds ₹ 50k”.

But, I think it is not correct for all types of transactions. The present case is where the transporter had not raised E-Way Bills while transporting goods from the same consignor to the same consignee on the same date with different Tax Invoices, with an aggregate value of more than Rs. 50,000/-, whereas the individual invoices were of value less than Rs. 50,000/-. Hence the judgment.

If we take the crux of the judgment as mentioned in the general scenario, it shall be over-riding the intension of the legislation as well as the Rules framed thereunder.

The Judgments says “…When goods of the same consignor covered by different invoices are consigned together in one vehicle, the value will be the total of that in the multiple invoices…”.

This may adversely affect the transport of goods in a vehicle, in which the same consignor has raised different Tax Invoices intended for different consignees.

Imagine a case, where a whole-sale trader or a distributor, has raised 30 Tax Invoices on different traders, out of which a few are registered and the rest are unregistered, the aggregate value of all the 30 Tax Invoices comes to, say, Rs. 3 lakhs. Among the Tax Invoices, there are two Tax Invoices, which are of value higher than Rs. 50,000/-individually, and all the others are of value less than Rs. 50,000/- individually. He hires a vehicle and carries the goods in a vehicle. Instead of generating E-way Bills for the two Tax Invoices of which the value is higher than Rs. 50,000/- individually, is this consignor (wholesale trader/distributor) expected to generate 30 E-way Bills before dispatch of the goods covered under the 30 Tax Invoices, including for the ones whose value is less than Rs. 50,000/-? I am of the opinion that it is not intended by the legislation.

Let us go through the Rule 138, related to E-Way Bill.

138. Information to be furnished prior to commencement of movement of goods and generation of e-way bill.-

(1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees—

(i) in relation to a supply; or

(ii) for reasons other than supply; or

(iii) due to inward supply from an unregistered person,

shall, before commencement of such movement, furnish information relating to the said goods as specified in Part A of FORM GST EWB-01, electronically, on the common portal along with such other information as may be required on the common portal and a unique number will be generated on the said portal:

Explanation 2.- For the purposes of this rule, the consignment value of goods shall be  the value, determined in accordance with the provisions of section 15, declared in an  invoice, a bill of supply or a delivery challan, as the case may be, issued in respect of the  said consignment and also includes the central tax, State or Union territory tax,  integrated tax and cess charged, if any, in the document and shall exclude the value of exempt supply of goods where the invoice is issued in respect of both exempt and  taxable supply of goods.

From the explanation 2 above, it is clear that the consignment value is as declared in an Invoice, which means that the E-way Bill has to be raised only on such Tax Invoices which are of higher value than Rs. 50,000/-. And, it also has to be interpreted that each consignment is based on each Invoice, since the words used is ‘the consignment value of goods shall be the value, declared in an Invoice’.

The Notes prepared by the Tally Solutions, a major player in supplying Accounting and Invoicing Software under GST, on E-way Bill generation, read as follows:

At the 26^th meeting of the GST Council, the decisions, with regard to generation of E-way bill have been as follows:

• E-way bill is required to be generated only where the value of the consignment exceeds Rs. 50000/-. For smaller value consignments, no e-way bill is required.
• The provisions of sub-rule (7) of Rule 138 will be notified from a later date. Therefore, at present there is no requirement to generate e-way bill where an individual consignment value is less than 50,000/-, even if the transporter is carrying goods of more than Rs. 50,000/- in a single  conveyance.
• Value of exempted goods has been excluded from value of the consignment, for the purpose of e-way bill generation.

But as the judgment says, “…But when goods of the same consignment covered by multiple invoices exceed the limit of Rs. 50,000/-, necessarily there should be generation of e-way bill. Otherwise the mandate for generation of an e-way bill would be defeated and rendered redundant enabling the consignors to issue any number of bills having value below Rs. 50,000/- and consign them in one vehicle…”. This aspect Is true when the consignor and the consignee are the same.

But if the consignor is one and the consignees are different, and there are goods of consignment-value less of than Rs. 50,000/- including Taxes and Cess, covered by separate Tax Invoices, there is no need to generate E-way Bills on such Tax Invoices, though the total value of goods carried in the vehicle is above Rs. 50,000/-.

But at the same time, as per the judgment, if one Consignor transports goods to the same consignee, in one vehicle, under different Tax Invoices, and the total value of all the Tax Invoices raised on that consignee in that vehicle crosses the value of Rs. 50,000/-, E-way bill will have to be generated, considering the consignment value as being the total value of all the Tax Invoices.