Navigating E-Way Bill Regulations: A Business Guide

The e-way bill system came into effect on April 1, 2018, under the Goods and Services Tax (GST) regime. It replaced the earlier system dependent on waybills, statutory forms, and state permits.

Earlier, businesses had to generate and maintain several documents that were physically checked at various checkpoints. This led to additional paperwork and increased transit time.

However, now with the e-way bill system, there is no need to produce multiple documents. A valid e-way bill is valid across all states and acts as proof that goods are being transported legally.

Since there are many rules about using e-way bills, businesses must learn when and how to create e-way bills, documents required, exemptions, validity period, and non-compliance penalty. In this article, let’s find answers to all these important questions.

When to generate e-way bills

Source: margbooks.com

As per the latest GST rules, an e-way bill is required when goods worth more than Rs. 50,000 are being moved, whether within the same state (intra-state) or between different states (inter-state). You need to generate an e-way bill before starting the transport of goods.

What documents are required to generate e-way bills

To create an e-way bill, you need the following two sets of information:

Evidence of sale Transport details
A document that proves the sale or movement of goods, such as:

●       An invoice

●       A bill of supply

●       A challan

Information about how the goods will be transported, such as:

●       The ID of the transporter (if using a transport service).

●       The vehicle number (if using your own or hired vehicle).

●       A transport document number (given by the transporter) if goods are sent by air, rail, or other transport services.

How to generate e-way bills

The process of generating e-way bills is 100% digital and can be done using the official EWB web portal – www.ewaygst.gov.in. To use the EWB portal, businesses and transporters must first register by providing their GSTIN (Goods and Services Tax Identification Number) and other business details.

Once registered, they can log in to the portal to create and cancel e-way bills as per their requirements.

Generate e-way bills in bulk

Source: vakilsearch.com

For high-frequency sellers, like those operating on online marketplaces, the EWB portal provides a ‘bulk generation feature’. Using this feature, businesses can create multiple e-way bills at once.

Besides saving time, this feature also reduces the chances of making mistakes as you do not have to do manual entries for each transaction.

What is the validity period of an e-way bill

The e-way bill is valid for a certain number of days based on how far the goods need to travel:

Up to 100 km For every extra 100 km or part of it
The e-way bill is valid for 1 day. You get an additional day of validity.

If there are unexpected delays, like traffic jams or bad weather, you can also extend the e-way bill’s validity. However, you must request an extension before the current validity period ends.

What are some e-way bill exemptions

To reduce the compliance burden, the government has specified the following situations where an e-way bill is not required:

1. The value of goods is less than Rs. 50,000

No e-way bill is required unless it’s for special cases like handicraft goods or interstate job work.

2. Government or defence transportation

If government agencies or the Ministry of Defence are moving goods by rail, they do not need an e-way bill.

3. Non-motorised transport

If goods are moved using traditional methods like horse carts or manual carts, an e-way bill is not needed.

4. Transport within a notified area

If goods are being transported within a specific area defined by the government, an e-way bill is not required.

5. Goods moved under customs clearance or customs bond

An e-way bill is not required when:

  • Goods are transported from ports, airports, or land customs stations to inland container depots (ICD) or container freight stations (CFS) for customs clearance.
  • Goods are moved between these locations under a customs bond.
  • Customs officers are supervising or sealing the goods during transport.

6. Transit to or from Nepal or Bhutan

If goods are in transit to or from these countries, an e-way bill is not needed.

7. Transport to a weighbridge

If goods are moved within 20 km to a weighbridge and back to the business location under a Delivery Challan (DC), no e-way bill is required.

What are the penalties for non-compliance

e-way bill rules
Source: commercialtutor.com

To follow the e-way bill rules properly, businesses must:

  • Generate e-way bills whenever required.
  • Ensure all details are correct, such as:
    • Invoice numbers
    • Transporter details
    • Value of goods
    • HSN codes, and more.
  • Keep records of all e-way bills, including those that were generated, extended, or cancelled.

If the above e-way bill rules are not followed, penalties can be imposed. The fine can be the higher of these two limits:

  • 10,000
  • An amount equal to the tax avoided.

Conclusion

The e-way bill system makes it easier for businesses to transport goods legally across India. It reduces paperwork and eliminates the need to produce multiple documents.

To remain compliant, businesses must have a clear understanding of when to create an e-way bill, what documents are needed, and the validity rules. Also, they must be aware of some specific cases when an e-way bill is not required, like transporting goods within a short distance or using non-motorised transport.

Following the rules is important to avoid scrutiny from the GST department and penalties. Also, strict compliance enhances your creditworthiness and makes you eligible to secure funds from leading banks and NBFCs.

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