Introduction to E-Way Bills
E-way bill is an electronic way bill for movement of goods which can be generated on the GSTN. A registered person has to generate an E-way bill if the value of goods is greater than Rs. 50,000/-. Hence, movement of goods of more than Rs 50,000 in value cannot be made by a registered person without an e-way bill.
From when to use E-way Bills
For all inter-state transactions that require transportation of goods, e-way bills would have to be generated from February 01, 2018 in all the states. E-way Bills for intra-state transactions will be required from June 01, 2018. The last date for roll out of intra-state e-way bills is June 01, 2018. That means all states will have to implement intra state e-way bills prior to June 01, 2018. Intra state transactions are those transactions which are done within the state. Here the location of the service provider and the place of supply are the same.
Why did the Government introduce E-way Bills?
The logic behind the e-Way bill is to track the movement of goods above Rs 50,000 within the state, and from one state to another. It is supposed to check GST evasion and put to rest the worries of different states that they were losing out on GST revenues. The central government was equally keen to shorten the mismatches and delays in matching invoices that is taking place at the moment. One possible reason for the advancement of the e-way bill implementation is that the government got spooked by the October GST collections, which had slowed to Rs 83,346 crore. The e-way bill is being seen as a panacea to check GST evasion.
Who can generate an E-way Bill?
- 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 or their transporters may also choose to generate an e-way bill. This means than an e-way bill can be generated by both registered and unregistered persons. 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.
Procedure to generate E-way Bills
Any good worth Rs 50,000 or above needs an e-way bill if it has to go beyond 10 kms. Any person or firm registered under GST will can generate the e-way bill – including the transporter. E-way bill can also be generated or canceled through SMS. When an e-way bill is generated a unique e-way bill number (EBN) is allocated and is available to the supplier, recipient, and the transporter.
What is the validity of an E-way Bill?
The validity of an e way bill depends on the distance traveled by the goods. An e-way bill is valid for 1 day for up to 100 kms and for every 100 kms after that date & time at which e-way bill is generated, An extra day. Hence, for a distance of less than 100 Km the e-way bill will be valid for a day from the relevant date. For every 100 Km thereafter, the validity will be additional one day from the date of generation of e way bill. So validity is calculated from the date and time of generation of e-way bill.
The e-way bill needs to be generated before the goods are moved, and it has a limited validity period based on the distance covered. If the good fails to be shipped on the date of generation, the e-way bill can be cancelled within 24 hours. Or if a mode of transport is changed, a fresh e-way bill needs to be generated. Similarly, if some goods are sent back by the receiver, another e-way bill needs to be generated. All these are likely to only delay the smooth movement of goods from one state to another
For example, suppose a high end television or audio set that costs over Rs 50,000 is shipped by a truck from the factory to the dealer, and then sent on further by the dealer to the customer’s house, it will need two separate e-way bills. If the customer in the meantime, cancels the order before it reaches him, another e-way bill will have to be generated.
All these e-way bills will then also have to be matched with the invoices. In general, it adds a layer of complexity to the whole process of shipping goods from one state to another. It adds also to the burden of the GST Network (GSTN), which is already facing multiple problems in matching invoices.
The question is….are we prepared to handle these additional compliances?