CA Abhay Tulsian

CA Abhay Tulsian

In the era of series of reforms and GST implementation, the government is all set to introduce E-Way Bill for movement of goods across the country. The free movement of goods across the nation without any barriers in between is one of the main aims of GST. E-way bill is one of the major reforms in GST regime and would bring a ground – breaking change in the way, the movement of goods are governed in the country. E-Way bill is set to be implemented from February 1, 2018. In the above background, this article intends to throw light on the E-way bill rules and procedures.

The E-way bill systems gets it birth from Section 68 of the Central Goods and Services Tax 2017, which empowers the Government to require the person-in-charge of a conveyance carrying any consignment of goods, exceeding the value, as may be specified to carry with him documents and such devices that may be prescribed. Thus, the E Way bill is just the beginning and the Government has powers where they can very well prescribe much more than the E Way Bill in future.

Furnishing the details of the Supply:

The documents the person-in-charge of a conveyance must carry has been prescribed under rule 138 of the CGST Rules 2017 as amended by Notification No. 3/2018. The reading of the above said rule provides that a registered person causing the movement of goods shall furnish information relating to the said goods as specified in Part A of FORM GST EWB-01 (E-way Bill) where

  • The value of such goods exceeds INR 50,000/- and
  • Such movement is
    • in relation to a supply; or
    • for reasons other than supply; or
    • due to inward supply from an unregistered person.

However, the E-way bill shall be generated irrespective of the value of the goods in the following cases;

  • Interstate Job work – to be generated by the principal
  • Handicraft goods being transported from one State to another by a person who has been exempted from the requirements of obtaining registration under clauses (i) and (ii) of section 24 – to be generated by the said person irrespective of the value of the consignment.

In a situation, where the goods are supplied by an unregistered supplier to registered person, the movement shall be said to be caused by such registered person. This may result in practical hardships to the registered person procuring materials from the unregistered persons.

In case, the goods to be transported are supplied through an e-commerce operator, the information may be furnished by such e-commerce operator or the transporter.

Furnishing the details of the Conveyance:

The details of the conveyance through which the goods are being transported shall be furnished in Part B of the E-way bill. The mode of transportation may be either own or hired conveyance or by railways or by air or by vessel. Further, where the goods are transported by railways or by air or vessel, the serial number and date of the Railway Receipt or the Air Consignment Note or Bill of Lading, shall also be furnished in Part B of the E-way bill.

Where the distance involved for movement of goods is less than 10km, Part B of the E-way bill need not be furnished, however furnishing the details in Part A of the E-way bill shall be mandatory. However, the method to compute the distance is not prescribed in the act or the rules.

Where the goods are handed over to the transporter, the registered person shall update the details of the transporter on the common portal and the transporter can update Part B of the E-way bill.

In a scenario goods are transferred from one conveyance to another, the consignor or the recipient, or the transporter shall, update the details of conveyance in Part B of the e-way bill before such transfer and further movement of goods.

Consolidated E-Way Bill:

In a scenario, where multiple consignments are intended to be transported in one conveyance, the transporter may indicate the serial number of e-way bills generated for each consignment and a consolidated E-way bill in FORM GST EWB-02 maybe generated by him prior to the movement of goods.

If the consignor or the consignee has not generated GST EWB-01 and the value of goods carried in the conveyance is more than INR 50,000/-, then the transporter shall generate Form GST EWB-01 based on invoice or bill of supply or delivery challan and may also generate a consolidated e-way bill.

Validity and Cancellation of E-Way Bill:

To calculate the validity of the e-way bill, the distance to be covered by all the modes combined must be taken into consideration. The validity provided in the rules is as under:

Sl. No. Distance Validity period
1. Up to 100 km. One day
2. For every 100 km. or part thereof thereafter One additional day

Powers has been granted to the Commissioner to extend the validity period of E-waybill for certain categories of goods as may be specified.

Further where due to some circumstances of an exceptional nature, the goods could not be transported within the validity period, the transporter may generate another e-way bill after updating the details in Part B of E-way bill.

The details of the E-way bill shall also be furnished to the recipient or supplier of the goods depending on the person who has generated the E-way bill. The supplier or the recipient shall communicate his acceptance or rejection of the consignment covered by the e-way bill within 72 hours of generation of E-way bill. If, he fails to do so, it shall be deemed that he has accepted the said details. If the E-way has been rejected it shall stand immediately invalid and goods cannot be further moved.

The E-way bill may be cancelled within 24 hours of its generation, if the goods are not transported or not transported as per the details furnished in the e-way bill. The common portal does not allow the modification of details mentioned in Part A of the E-way bill once generated. Thus, incase details furnished in the E-way bill are incorrect the same can be modified only by generating a new E-way bill and cancelling the E-way will generated earlier. However, if the E-way bill is verified during transit it cannot be cancelled.

Exemption from E-way bill:

E-way bill shall not be required in the following cases;

  • Goods being transported are specified in Annexure to rule 138 of CGST and the SGST rules;
  • Goods are being transported by a non-motorized conveyance
  • Goods are being transported from the port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs
  • Goods, other than de-oiled cake, being transported are specified in the Schedule appended to notification No. 2/2017- Central tax (Rate) dated the 28th June, 2017
  • Goods being transported are alcoholic liquor for human consumption, petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas or aviation turbine fuel; and
  • Goods being transported are treated as no supply under Schedule III of the Act.

Documents and devices to be carried by a person-in-charge of a conveyance:

The person in charge of a conveyance shall carry:

  • the invoice or bill of supply or delivery challan, as the case may be; and
  • a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency Identification Device embedded on to the conveyance.

A registered person may obtain Invoice Reference Number lieu of the tax invoice and produce the same for verification by the proper officer.

Verification, Inspection and Detention of documents and conveyances:

The proper officer authorized by the commissioner may intercept any conveyance to verify the E-way bill or the E-way bill number during the movement of goods.

On receipt of specific information on evasion of tax and obtaining necessary approval from Commissioner, physical verification of a specific conveyance can also be carried out by any other officer.

Proper officer shall record online, a summary report of every inspection of goods in transit in Part A of FORM GST EWB-03 within 24 hours of inspection and the final report in Part B of FORM GST EWB-03 within three days of such inspection.

No physical verification of the conveyance shall be carried out, if verification of goods being transported has been done during transit at one place within the State or in any other State, unless a specific information relating to evasion of tax is made available subsequently.

If a vehicle has been intercepted and detained for a period exceeding thirty minutes, the transporter may upload the said information in FORM GST EWB-04.

Mandatory Information to be Furnished in E-way bill:

Part A Part B
GSTIN of Recipient Vehicle Number
Place of Delivery Distance in KM
Invoice or Challan Number
Invoice or Challan Date
Value of Goods
HSN Code
Reason for Transportation
Transport Document Number

Conclusion:

A very short span of time is given to understand the intricacies of this new way bill system and there may arise many practical challenges in the beginning. There are few practical issues and lack of clarity in E-way bill rules and it is likely that the law makers would come out with appropriate explanations so that the purpose of the introduction of E-Way bill and the fundamental goal of “One Nation-One Tax” is achieved and it does not cause any hardships in ease of doing business.

Compiled by GSTstreet for #GSTManthan

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