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What is an e-way bill?

An e-way bill is a permit required for interstate and intrastate movement of goods. Learn more about its regulations, advantages and processes in this blog.

To decrease and eradicate tax fraud in the country, the Government of India introduced the e-way bill (EWB) system in 2018. When transporting high value goods, the GST regime requires carriers to procure an e-way bill – a permit for transportation. This is a compliance method where anybody transporting goods needs to upload appropriate information before the start of the process and create an e-way bill on the GST portal.

What is an e-way bill?

An e-way bill is a permit required for interstate and intrastate movement of goods worth INR 50,000 or more from one location to another within the country. It can be generated through the e-way bill portal and usually contains information on products, consignor, recipient and transporter. E-way bills can also be created or canceled through an SMS or android application by entering the GSTIN of the parties involved^1.

When should an e-way bill be issued?

When goods worth INR 50,000 or more are transported in a vehicle across the country, an e-way bill is created, concerning a ‘supply’.

A supply might be any of the following:

• A supply made for a payment in the course of business.
• A supply made for a payment that may not be in the course of business.
• A supply without consideration (without payment).

In simpler terms, the term ‘supply’ usually means:
• Sale of goods and payment made
• Transfer like branch transfers
• Barter/exchange (a method of payment in which goods are exchanged for money)

E-way bills for any of the above-mentioned cases must be created on a single platform.

Who can generate an e-way bill?

A registered individual (consignor, consignee, receiver or transporter) can create an e-way bill if the transportation is done by them or through hired means of transportation (air, rail, or road). If both the consignor and consignee do not create an e-way bill, the transporter must generate it².

How to generate an e-way bill?

The supplier or transporter can generate an e-way bill through any of the following ways³:
1. E-way bill portal
2. SMS
3. Android pp
4. GST Suvidha providers
5. Site-to-site integration (through an API)

The first step for any of these options is to visit the portal and register.

Steps to generate e-way bill on the portal

• Go to the e-way bill generation page and enter your login information.
• To generate a new e-way bill, go to the e-way bill main menu and select ‘Generate New’.
• A new EWB bill generation form appears. Fill in the necessary information.
• Choose outward if you are the supplier and inward if you are a receiver. Enter required information.
• Choose document type from invoice, challan, credit note, Bill of Entry or others if not listed.
• Add document or invoice number.
• Choose date of invoice, challan or document.
• Fill in product name and description.
• Enter the HSN code for the product, quantity and value of along with the tax rate.
• Add IGST or CGST rates as applicable.
• After entering relevant information, click the ‘Submit’ button to generate an EWB – a unique 12-digit number and QR Code, which provides information in a digital format.

A printed copy of the bill must be given to the transporter.

Steps to generate e-way bill on mobile via SMS

Before generating an e-way bill on SMS, it is important for the individual to ensure they have registered their mobile number on the GST e-way bill portal. Once done, below steps can be followed:
• Select ‘SMS’ from the ‘Registration’ drop-down menu on the e-way bill portal.
• An OTP will be sent to the registered phone number and email address.
• Enter the OTP and submit a request to create an e-way bill.

Documents required to generate an e-way bill

• Invoice, bill of supply or challan of consignment of goods
• In case of road transportation, transporter ID or vehicle number
• In case of transport via rail, air or ship, transporter ID, transport document number and documentation date

Format of an e-way bill

An e-way bill is divided into two parts:
Part A provides invoice information such as GSTIN of the supplier and receiver, delivery address, HSN codes, invoice number, etc.
Part B includes transporter information such as vehicle number, transporter ID, etc.

Under the current method, a taxpayer can generate both portions from the e-way bill. The information in Part A of Form GST EWB-01 must be filed before the start of transportation of goods. Part B (i.e., transportation information) can be filed later by the transporter⁵.

E-way bill rules

E-way bills are usually procured for transportation of consignment of goods that is worth INR 50,000 or above. If an e-way bill is issued and the products are not transported as indicated, the bill must be canceled. When many consignments are transported in a single transit, the transporter must create an e-way bill for each of the consignments individually on the platform.

E-way bill penalties

If a shipment is found to be without an e-way bill, the individual responsible must pay penalty. In the absence of an e-way bill, the departmental officer may hold or confiscate goods and vehicles used.

Modification, cancellation and rejection of an e-way bill

Cancellation

A new e-way bill cannot be created against an invoice until the old e-way bill has been canceled. If the products are not delivered or transported as per the information provided, the e-way bill can be canceled online on the portal within 24 hours of its production. Below is a step-by-step procedure to cancel an EWB:

• Select e-way bill option on the portal and click the ‘cancel’ button.
• Add the bill number and press ‘go’.
• Choose a reason for cancellation like duplication, canceled orders or data entry errors.
• If your reason for cancellation is not covered in the predefined options, you can type it and click ‘cancel’.

Modification:

Except for Part B, which can be modified with transportation details, an e-way bill cannot be modified once it has been created. If incorrect information has been entered while creating it, the bill can be canceled within 24 hours of being generated.

Rejection:

On the site, a recipient of goods can check the details of the e-way bill created against them. An e-way bill may be rejected by the recipient of goods within 72 hours after its creation. If an e-way bill is not canceled or rejected within the time-frame indicated, it is considered accepted.

Cases when an e-way bill is not required

E-way bills may not be required in the following situations:
• Consignment value is less than INR 50,000
• When the products being transported are GST-free
• Transportation is provided by a non-motorized vehicle
• Goods are transferred to the Inland Container Depot (ICD) or Container Freight Station (CFS) for customs clearance from a customs port, air cargo complex, airport or land customs station
• Goods moved under customs control or with a customs seal
• Goods are transported less than 10 kilometers within the same state
• Cargo traveled to or from Nepal or Bhutan en route
• Empty cargo containers are transported
• Goods are carried by rail and the consignor is the central, state or local governments
• Goods excluded from e-way bill requirements under GST rules of a particular state or union territory

Advantages and disadvantages of an e-way bill

Advantages:

• Reduces logistical costs by improving accuracy and eliminating tax evasion
• Accessible to carriers is the installation of an RFID device in the vehicle used to convey consignments regularly. The person in charge of the vehicle will no longer need to deliver paper copies since the device is attached to the vehicle and the e-way bill can be mapped and confirmed through the device.
• Quick and hassle-free transportation
• Reduces number of checkpoints located across state borders and on major roadways
• Lower turnaround time for transport vehicle
• Eliminates the need to contact e-way bill department through paperless transaction

Disadvantages:

• In areas with restricted internet connectivity, generating an e-way bill becomes challenging
• Businesses with daily product transfers might face compliance issues
• Bill extension generates numerous e-way bill numbers from a single dispatch or invoice, resulting in duplication

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Frequently Asked Questions

What is the validity of an e-way bill?

The validity of an e-way bill depends on the distance traveled by the goods and date and time of bill generation.

What are the penalties for not carrying or presenting an e-way bill?

If a shipment is found to be without an e-way bill, the individual responsible must pay penalty.

Can an e-way bill number be assigned to another transporter?

The authorized transporter may assign an e-way bill to any enrolled or registered transporter for onward carriage of goods. The new transporter can only update Part B of the EWB. If the supplier of goods wishes to change the transporter or reassign the e-way bill, they can do so by selecting the option ‘Change/Re-assign another transporter’ on the portal.

Published on November 29, 2022.

Sources:
1. https://www.cbic.gov.in/resources//htdocs-cbec/gst/E%20Way%20Bill%20Provisions%20in%20GST_Web.pdf
2. https://docs.ewaybillgst.gov.in/documents/usermanual_ewb.pdf
3. https://icmai.in/TaxationPortal/upload/IDT/Article_GST/64.pdf
4. https://www.indiafilings.com/learn/e-way-bill-consolidation-rejection-and-cancellation/
5. https://cbic-gst.gov.in/pdf/18062019-FAQs-EwayBill-Faq.pdf
6. https://www.srcc.edu/sites/default/files/GST.pdf
7. https://ewaybillgst.gov.in/
8. https://cbic-gst.gov.in/pdf/18062019-FAQs-EwayBill-Faq.pdf
9. https://gst.kar.nic.in/latestupdates/Ewaybillprovisions.pdf
10. https://www.business-standard.com/article/economy-policy/gst-e-invoicing-must-for-entities-with-rs-10-cr-turnover-from-oct-1-122080200553_1.html

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*Map not to scale. The map has been used for design and representational purpose only, it does not depict the geographical boundaries of the country. These do not conform to the external boundaries of India recognized by the Survey of India.