Moving goods from one location to another involves more than just raising an invoice. Under GST, certain movements of goods also require an e-way bill to be generated before the movement begins.
An e-way bill is an electronic document generated on the GST e-way bill system for the movement of goods. The requirement generally applies where the consignment value exceeds ₹50,000, subject to the applicable rules, exemptions and specific situations where an e-way bill is required even below this value.
The requirement can arise for a sale, a purchase from an unregistered person, stock transfers, job work and certain movements that are not supplies at all.
For businesses regularly moving goods, understanding when an e-way bill is required is just as important as knowing how to generate one. The value of the consignment, nature of the movement, distance, mode of transport and applicable exemptions can all affect the requirement.
Let’s look at how the e-way bill system works and the situations businesses need to consider.
What Is an E-Way Bill?
An e-way bill is an electronic document generated before the commencement of movement of goods in situations covered by the GST rules.
It contains information about the goods being transported, the consignor, consignee and the mode of transportation. Once generated, a unique E-Way Bill Number (EBN) is made available to the relevant parties through the e-way bill system.
The person in charge of the vehicle or conveyance is required to carry the relevant invoice, bill of supply or delivery challan along with the e-way bill or e-way bill number, as applicable.
An e-way bill is therefore not a replacement for the tax invoice. The two documents serve different purposes.
The invoice records the underlying supply, while the e-way bill relates to the movement of the goods.
When Is an E-Way Bill Required?
The basic rule is straightforward.
A registered person causing the movement of goods generally needs to generate an e-way bill when the value of the consignment exceeds ₹50,000 and the movement is:
- In relation to a supply.
- For reasons other than supply.
- Due to an inward supply from an unregistered person.
The movement can be within a State or between different States, subject to the applicable provisions.
For example, a business selling goods worth ₹75,000 to a customer in another State would generally need an e-way bill before the goods begin their journey.
The same consideration can arise when goods are moved without a sale. Stock transfers, movement for repairs and certain other business movements may also fall within the e-way bill provisions.
The ₹50,000 threshold is based on the value of the consignment, not simply the value of one individual item.
Is the ₹50,000 Limit Applicable to Every Movement?
₹50,000 is the general threshold under Rule 138, but it is not the only factor to consider.
There are specific situations where an e-way bill can be required even when the consignment value is below ₹50,000. The rules specifically provide for certain movements of goods for job work and certain inter-State movements of handicraft goods, among other prescribed situations. There are also cases where an e-way bill can be generated voluntarily for consignments below ₹50,000. So, checking only the invoice value may not always give the complete answer.
The nature of the movement and the specific provisions applicable to that transaction also need to be considered.
Who Is Responsible for Generating the E-Way Bill?
The responsibility can fall on different parties depending on how the goods are transported.
A registered consignor or consignee can generate the e-way bill. A transporter can also generate it where the relevant information has been furnished by the registered person. Unregistered transporters can enrol on the e-way bill system for this purpose. For example, a supplier may generate the e-way bill before handing the goods over to the transporter. Alternatively, where the supplier has furnished the required information and the transporter is responsible for completing the transport details, the transporter may generate the e-way bill.
The important point is to have clarity within the business about who will generate the e-way bill and who will provide the transport details.
What Documents Are Needed?
The information required depends on the transaction and mode of transport, but the underlying document is generally one of the following:
- Tax Invoice
- Bill of Supply
- Delivery Challan
Transport-related information such as the transporter ID, transport document number or vehicle details may also be required when generating or updating the e-way bill. For road transport, vehicle details form an important part of the e-way bill.
This is why it is useful to have the invoice and transportation information available before the goods leave the premises.
Does an E-Way Bill Apply to Both Sales and Purchases?
Yes.
The rules cover movement of goods in relation to supplies as well as certain inward supplies from unregistered persons.
For example, a manufacturer purchasing raw materials from an unregistered supplier may need to consider the e-way bill requirement if the applicable conditions are met. Similarly, a distributor sending goods to a customer, a business transferring stock between locations or a company sending goods for job work may also need to generate an e-way bill depending on the circumstances.
The requirement is therefore broader than simply transporting goods after a sale.
Is an E-Way Bill Required for Stock Transfers?
A stock transfer does not involve a sale in the usual sense, but that does not automatically take it outside the e-way bill rules.
The rules cover movement of goods for reasons other than supply as well. For example, a business may move inventory from its warehouse in Mumbai to another warehouse in Pune. Even though there is no sale to a customer, the movement still needs to be examined under the e-way bill provisions.
The same applies to other business movements where goods are transported without a conventional sale.
E-Way Bill for Job Work
Job work is another situation where businesses need to pay attention to the rules. In specified circumstances, goods sent by a principal to a job worker in another State require an e-way bill irrespective of the value of the consignment. This is different from the general ₹50,000 threshold.
For businesses regularly sending raw materials or finished goods to job workers, this makes it important to identify the nature of the movement before deciding whether an e-way bill is required.
E-Way Bill for Imports and Exports
E-way bill requirements can also arise in connection with imported or exported goods, particularly for the movement of goods within India.
For exports, the relevant distance for e-way bill purposes is generally considered from the consignor’s place to the place from which the goods leave the country after customs clearance. For imports, the distance is considered from the place where the goods enter the country and are cleared by customs to the destination. This means that an export transaction should not be treated as automatically outside the e-way bill system simply because the final customer is located outside India.
The requirement relates to the movement taking place within the country.
E-Way Bill and E-Invoice Are Not the Same
E-way bills and e-invoices are often discussed together, but they serve different purposes.
An e-invoice is concerned with the registration of specified invoices and other documents through the Invoice Registration Portal.
An e-way bill relates to the movement of goods. A transaction may require both.
For example, a business making a taxable B2B supply of goods may need to generate an e-invoice where applicable and also generate an e-way bill for transporting the goods. On the other hand, an e-way bill requirement does not automatically mean that the transaction requires an e-invoice.
The two requirements need to be considered separately.
E-Way Bill Validity Period
Once an e-way bill has been generated, it remains valid for a specified period based on the distance covered by the goods.
For regular vehicles or conveyances, the general validity is one day for every 200 kilometres or part thereof.
For over-dimensional cargo, the validity is generally one day for every 20 kilometres or part thereof. The rules also provide for an additional day in the prescribed circumstances.
The validity period is calculated from the time at which the e-way bill is generated. For example, if the applicable distance gives a validity of three days, the goods need to reach the destination within that validity period unless the validity is extended under the applicable provisions. This makes the distance and expected travel time important when arranging transportation.
What Are Part A and Part B of an E-Way Bill?
The e-way bill contains two broad sets of information, commonly referred to as Part A and Part B.
Part A contains information relating to the goods and the underlying transaction. This can include details such as the supplier, recipient, invoice or document number, value of goods and other relevant information.
Part B contains the transportation details, such as the vehicle number in the case of road transport or other prescribed transport information.
For movement by road, the vehicle details are particularly important because the e-way bill needs to be associated with the conveyance carrying the goods. In practice, businesses should ensure that the transport information is updated before the goods begin their journey where the rules require it.
Can Vehicle Details Be Updated Later?
Yes. In certain situations, the vehicle or transport details can be updated after the e-way bill has been generated.
This is useful when the goods are transferred from one vehicle to another during transportation or when the vehicle originally entered in the e-way bill changes.
The relevant Part B information needs to be updated through the e-way bill system. For example, goods may initially leave a warehouse in one vehicle and later be transferred to another vehicle because of a breakdown or a change in the transport arrangement.
The e-way bill should reflect the relevant vehicle details for the movement.
What Happens When Goods Are Transferred Between Vehicles?
Vehicle changes are fairly common during transportation, particularly when goods are moved through different transporters or when a vehicle breaks down.
The transporter or person responsible for the movement needs to update the e-way bill with the new vehicle details as required. The objective is to keep the transportation information in the e-way bill aligned with the actual movement of the goods.
This is particularly important during transit checks, where the details available in the e-way bill may be compared with the documents and vehicle actually carrying the goods.
Can an E-Way Bill Be Cancelled?
Yes. An e-way bill can be cancelled in the circumstances permitted under the GST rules.
For example, cancellation may become necessary when the goods are not transported at all or when the details of the transaction require the original e-way bill to be withdrawn.
An e-way bill can generally be cancelled within 24 hours of generation, subject to the applicable provisions. It cannot be cancelled if it has already been verified in transit by the relevant authority. Businesses should therefore avoid generating e-way bills prematurely and then leaving them unused.
If an e-way bill has been generated but the movement is subsequently cancelled, the person responsible should check whether cancellation is required and whether it is still within the permitted time.
Can an E-Way Bill Be Edited?
An e-way bill cannot simply be edited in the same way as a draft document.
Certain transportation details, such as vehicle information, can be updated where permitted. However, if important invoice or transaction information is incorrect, the original e-way bill may need to be cancelled and a fresh e-way bill generated, depending on the circumstances. This is why the invoice and other underlying information should be checked before generating the e-way bill.
A small mistake in the source document can otherwise result in additional work for the accounts and logistics teams.
What Is a Consolidated E-Way Bill?
A consolidated e-way bill can be useful when a transporter is carrying multiple consignments in the same conveyance.
Instead of having to carry multiple individual e-way bill numbers as the only reference for the movement, the transporter can generate a consolidated e-way bill containing the relevant individual e-way bills. The consolidated document is identified by a separate number. Importantly, the consolidated e-way bill does not replace the individual e-way bills. It brings multiple e-way bills together for the purpose of managing the movement of goods in a single conveyance.
This can be particularly useful for transporters handling several consignments on the same route.
What Are the Main E-Way Bill Exemptions?
The GST rules provide several situations where an e-way bill is not required.
These include certain specified types of movement and circumstances covered under Rule 138(14) and the relevant annexure. Examples include certain movements involving customs, certain non-motor vehicle transport, specific defence-related movements and certain notified areas or goods. There are also specific exemptions for particular types of transport and transactions. Because the exemption list is detailed, businesses should refer to the applicable notification and rules rather than relying on a general assumption that a particular type of movement is exempt.
The exemption may depend on the exact nature of the goods, the location, the mode of transport and the reason for movement.
Is an E-Way Bill Required for B2C Sales?
A B2C transaction is not automatically exempt from the e-way bill requirement.
The e-way bill rules are primarily concerned with the movement of goods, rather than simply whether the recipient is registered under GST. For example, if a registered business sells goods worth more than ₹50,000 to an individual consumer and the applicable conditions for e-way bill generation are met, an e-way bill may be required. The GST registration status of the customer is therefore only one part of the overall picture.
The value of the consignment, nature of the movement and applicable exemptions also need to be considered.
What Happens If the E-Way Bill Expires During Transit?
An e-way bill is expected to remain valid for the period prescribed under the rules.
If the goods cannot reach the destination within the validity period, the situation needs to be addressed in accordance with the applicable provisions. The rules provide for extension of validity in specified circumstances, including exceptional circumstances such as law and order issues, natural calamities, trans-shipment delays, accidents of the transporter and other reasons beyond the control of the transporter.
The transporter or person responsible for the movement should therefore monitor the validity rather than waiting until the e-way bill has already expired.
What Happens If the Vehicle Is Detained?
During transportation, the relevant GST authorities can verify the documents and information relating to the goods.
The person in charge of the conveyance may be required to produce the invoice, bill of supply, delivery challan and the e-way bill or e-way bill number.
Where discrepancies are identified, the authorities may take action under the applicable GST provisions.
For businesses, this is one reason why the information in the invoice, e-way bill and actual transportation documents should remain consistent.
A mismatch in the vehicle number, document number, goods or other important information can create avoidable complications during transit.
What Are the Consequences of Moving Goods Without a Required E-Way Bill?
Failure to comply with the e-way bill requirements can have financial and operational consequences.
Where goods are transported in contravention of the GST provisions, the authorities can take action under Section 129 of the CGST Act, which deals with detention, seizure and release of goods and conveyances in transit. Depending on the circumstances, this can result in tax and penalty consequences as prescribed under the law.
There can also be a practical impact. Goods may be detained during transit, resulting in delays in delivery and additional administrative work.
For businesses that transport goods regularly, maintaining a proper e-way bill process is therefore not merely an administrative formality.
Common E-Way Bill Mistakes
Most e-way bill problems are fairly avoidable.
Some of the common issues businesses encounter include:
- Incorrect GSTIN of the supplier or recipient.
- Incorrect invoice or document number.
- Wrong taxable value or invoice value.
- Incorrect HSN information.
- Incorrect vehicle number.
- Failure to update vehicle details after a vehicle change.
- Generating the e-way bill after the movement has already started.
- Allowing the e-way bill to expire during transit.
- Generating an e-way bill but not cancelling it when the movement is abandoned.
- Assuming that every transaction below ₹50,000 is automatically outside the e-way bill rules.
The best way to reduce these errors is to make e-way bill generation part of the normal dispatch process rather than treating it as something to be completed after the goods have already left.
E-Way Bill for Different Types of Movement
The requirement can arise in several different situations, not just ordinary sales.
Businesses should consider e-way bill requirements when goods are:
- Sold to customers.
- Purchased from suppliers.
- Transferred between business locations.
- Sent to job workers.
- Returned to suppliers or customers.
- Moved for repairs or other business purposes.
- Transported for export.
- Received after import clearance.
The exact requirement varies with the circumstances.
This is why the reason for movement should be identified before deciding how the transaction needs to be documented.
E-Way Bill for Returns and Repairs
Goods moving back to a supplier or customer can also require an e-way bill where the applicable conditions are satisfied.
Similarly, goods sent to another location for repairs, testing or other business purposes may need to be considered under the provisions relating to movement for reasons other than supply. A delivery challan may be used as the underlying document in appropriate cases.
The business should therefore look at the actual reason for movement rather than assuming that an e-way bill is relevant only when an invoice is issued for a sale.
E-Way Bill and Transporters
Transporters play an important role in the e-way bill system.
Where the supplier or recipient has furnished the required information, the transporter may be responsible for completing or generating the e-way bill as applicable.
Transporters also need to ensure that the vehicle carrying the goods is correctly associated with the relevant e-way bill. For businesses using third-party logistics providers, it is useful to establish a clear responsibility matrix. The business should know whether it is generating the complete e-way bill or whether the transporter is expected to complete the transport-related information.
This avoids situations where everyone assumes that someone else is responsible for completing the process.
E-Way Bill for Export Shipments
Export shipments deserve particular attention.
The fact that the customer is outside India does not by itself remove the e-way bill requirement for the movement of goods within India. Where an export consignment is being transported from the supplier’s premises to the port, airport, customs station or other applicable place from which the goods leave India, the e-way bill provisions need to be considered for that domestic movement. The relevant distance and transportation details are then considered in accordance with the e-way bill rules.
This is separate from the export documentation and customs process.
E-Way Bill for Imports
Imported goods can also involve e-way bill requirements once the goods have entered India and are being transported after the relevant customs clearance.
For example, goods imported through a port may need to be transported from the port to the importer’s warehouse. The e-way bill requirement for this movement should be examined based on the applicable GST rules.
The import documentation and customs process remain separate from the e-way bill requirement.
E-Way Bill Checklist for Businesses
Before dispatching goods, a simple checklist can help prevent most common problems.
- Confirm Whether an E-Way Bill Is Required.
- Check the Invoice, Bill of Supply or Delivery Challan.
- Verify Supplier and Recipient GSTINs.
- Check the Consignment Value.
- Confirm the Correct HSN and Description of Goods.
- Enter the Correct Transport Details.
- Verify the Vehicle Number.
- Check the Validity Period.
- Monitor Any Vehicle Changes During Transit.
- Cancel Unused E-Way Bills Within the Permitted Time.
For businesses moving goods regularly, these checks can be incorporated into the dispatch or invoice approval process.
Frequently Asked Questions About E-Way Bills
What is the e-way bill limit under GST?
The general threshold is ₹50,000 for the movement of goods covered by the e-way bill provisions. However, there are specific situations where an e-way bill may be required even below ₹50,000.
Is an e-way bill required for every invoice above ₹50,000?
Not necessarily. The nature of the movement, applicable exemptions and other conditions under the GST rules also need to be considered.
Is an e-way bill required for B2C sales?
A B2C transaction can require an e-way bill when the applicable conditions for movement of goods are met. The fact that the customer is an individual does not by itself remove the e-way bill requirement.
Is an e-way bill required for exports?
An e-way bill may be required for the movement of export goods within India, subject to the applicable rules and exemptions.
Is an e-way bill required for imports?
It can be required for the movement of imported goods after they enter India, subject to the applicable provisions.
How long is an e-way bill valid?
For regular vehicles, the general rule is one day for every 200 kilometres or part thereof. Different rules apply to over-dimensional cargo.
Can an e-way bill be cancelled?
Yes. An e-way bill can generally be cancelled within 24 hours of generation, provided it has not already been verified during transit.
Can an e-way bill be edited?
Certain transport details can be updated where permitted. Transaction information generally cannot simply be edited after generation. Depending on the error, cancellation and fresh generation may be required.
What is a consolidated e-way bill?
It is a document generated by a transporter carrying multiple consignments in one conveyance. It brings together the individual e-way bills for that movement.
Is an e-way bill the same as an e-invoice?
No. An e-invoice relates to the registration of specified invoices through the IRP, while an e-way bill relates to the movement of goods. A transaction can require both.
Conclusion
The e-way bill system is an important part of GST compliance for businesses that move goods.
The basic ₹50,000 threshold is a useful starting point, but it is not the only factor that determines whether an e-way bill is required. The reason for movement, type of transaction, distance, mode of transport and applicable exemptions also need to be considered.
Businesses should pay particular attention to stock transfers, job work, returns, imports and exports, as these movements can involve e-way bill requirements even when there is no conventional sale to a customer.
Once the requirement is established, the process itself is relatively straightforward. The key is to ensure that the invoice or delivery document, transportation information and e-way bill remain consistent throughout the movement.
For businesses that regularly dispatch goods, integrating e-way bill generation into the normal invoicing and dispatch workflow can make compliance much easier.
In our next article, we’ll look specifically at Zoho Books E-Way Bill, including how the feature works, the setup process, generation of e-way bills from Zoho Books and how it can fit into the day-to-day invoicing and dispatch process.
Need Help With GST Compliance?
E-way bills are only one part of a business’s GST compliance process. Businesses also need to consider invoicing, e-invoicing, returns, reconciliations and other GST requirements based on their transactions.
We can help businesses review their GST processes, configure accounting systems such as Zoho Books and build practical workflows for day-to-day compliance.