GST GST Advisory

What is the E-Way Bill System under GST?

Under the GST regime, for quick and easy movement of goods within states in India without any hindrance, all the check posts across the country are abolished. However, in order to monitor the movement of goods for controlling any tax evasion, e-way bill system has been introduced – for inter-State movement of goods with effect from 01.04.2018 and for Intra- State movement of goods in a phased manner. This article describes the E-Way Bill System under GST.

How E-Way Bill System Works?

Under this system, a registered taxable person prior to movement of goods via a conveyance would inform each transaction’s details to the tax department. After this, you will obtain an acknowledgement number for having thus informed, and then use this acknowledgement number as a valid document accompanying the conveyance carrying goods. The idea is that the taxpayer is made to upload the details of each transaction to a common portal through the Internet, and once uploaded; the common portal would automatically generate a document which can be tracked and verified easily by any concerned persons.

What is E-Way Bill?

An Electronic Way Bill (E-Way Bill) is a receipt or a document issued by a registered person giving details and instructions relating to the movement of goods and details include the name of the consignor, consignee, the point of origin of consignment, its destination, and route.

What is the Pr-requisite to the generation of E-Way Bill?

The Pre-requisite for the generation of E-Way Bill is that the person who generates E-Way Bill should be a registered person on GST Portal and he should register on the E-Way Bill portal.

If the Transporter is not a registered person under GST, it is mandatory for him to get enrolled on E-Way Bill portal generation of the E-Way Bill.

What are the benefits of E-Way Bill?

When to generate E-Way Bill?

Whenever there is a movement of goods of consignment value exceeding Rs. 50,000:

• In relation to a supply; or
• For reasons other than supply; or
• Due to inward supply from an unregistered person,

The registered person causing such movement of goods shall furnish the information relating to the said goods as specified in Part A of Form GST EWB-01 before the commencement of such movement.

Who causes movement of goods?

If the supplier is registered and undertakes to transport the goods, movement of goods is caused by the supplier. If the recipient arranges transport, the movement is caused by him. If goods are supplied by an unregistered supplier to a registered known recipient, the movement shall be caused by such recipient

When does information need to be submitted?

It is important to note that “information is to be furnished prior to the commencement of movement of goods” and is to be issued whether the movement is in relation to supply or for reasons other than supply. In many cases, goods transit through another State while moving from one area in a State to another area in the same State.

It is important to note that E-way bill generation is not dependent on whether a supply is inter-State or not, but on whether the movement of goods is inter-State or not. Therefore, if the goods transit through a second State while moving from one place in a State to another place in the same State, an e-way bill is required to be generated [Circular No. 47/21/2018 GST dated 08.06.2018]

What is the meaning of the consignment value of goods?

Consignment value of goods shall be the value:

• Determined in accordance with provisions of Section 15 of CGST Act( Transaction Value),
• 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 less 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.

As discussed, in case of movement of goods for reasons other than supply, the movement is occasioned by means of delivery challan which has necessarily contained the value of goods. The value given in the delivery challan should be adopted in the E-Way Bill

Value of Consignment less than 50000, whether E-Way Bill required? Any such cases?

The answer to the above question is yes. In the following situation even if the value of consignment is less than Rs50000, E-Way Bill will be required:

• Inter-State transfer of goods by the principal to job-worker

Where goods are sent by a principal located in one State or Union territory to a job worker located in any other State or Union territory, the e-way bill shall be generated either by the principal or the job worker, if registered, irrespective of the value of the consignment [Third proviso to rule 138(1)].

• Inter-State transfer of handicraft goods by a person exempted from obtaining registration

Where handicraft goods are transported from one state or union territory to another state or union territory by a person who has been exempted from the requirement of obtaining registration, the E-Way Bill shall be generated by the said person irrespective of the value of the consignment.

E-Way Bill in case of ‘Bill to Ship to ‘Model

In this model of supply, there are three persons involved in a transaction, namely:

‘A’ is the person who has ordered ‘B’ to send goods directly to ‘C’

‘B’ is the person who is sending goods directly to ‘C’ on behalf of ‘A’

‘C’ is the recipient of goods

In the complete scenario, two suppliers are involved and accordingly, two tax invoices are required to be issued:

Invoice 1 which would be issued by ‘B’ to ‘A’.

Invoice-2 which would be issued by ‘A’ to ‘C’

It is clarified that as per the CGST Rules 2017^[1], either A or B can generate the E-Way Bill but it may be noted that only one E-Way Bill will be generated.

Also Read:

• 24th GST Council Meeting – An Overview
• 25th GST Council Meeting – Highlight of the Key Decisions
• GST Returns to be Filed by Different Taxpayers