E-Way Bill is an effective tool to track movement of goods

Source: The Hitavada      Date: 05 Jan 2018 11:13:23


By CA Satish Sarda,

The much feared E-Way Bill is going to implemented with effect February 1, 2018. E-Way Bill is a mechanism to ensure that goods being transported comply with the GST Law and is an effective tool to track movement of goods and check tax evasion.

What is E-Way Bill.?
Electronic Way Bill (E-Way Bill) is basically a compliance mechanism wherein by way of a digital interface the person causing the movement of goods uploads the relevant information prior to the commencement of movement of goods and generates E-Way Bill on the GST portal. 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 a supply or for reasons other than supply.’

What is Effective date of for roll-out of E-Way Bill.?
The nation-wide E-Way Bill system will be rolled out on a trial basis latest by January 16, 2018 and will be mandatorily implemented by February 1, 2018 for inter-state movement of goods. Trade and transporters can start using E-Way Bill system on a voluntary basis from January 16, 2018. The states may choose their own timings for implementation of GST E-Way Bill for intra-State movement of goods on any date before June 1, 2018.

Who should generate the E-Way bill under GST?
By the consignor or consignee himself: If the transportation is being done in own/ hired conveyance or by railways by air or by vessel. By the transporter: If the goods are handed over to a transporter for transportation by road. (Part A information shall be furnished by registered person). By the transporter: Where neither the consignor nor consignee generates the E-Way Bill and the value of goods is more than Rs 50,000. Transporter shall be responsible to generate it.

By the recipient: If he is registered and the supplier is unregistered under GST.
By the principal: Where goods are sent by a principal located in one State to a job worker located in any other State, the E-Way Bill shall be generated by the principal irrespective of the value of the consignment.

How to generate E-Way Bill?
An E-Way Bill contains two parts- Part A and Part B . Part A is to be furnished by the person who is causing movement of goods of consignment value exceeding Rs 50,000 and part B (transport details) to be furnished by the person who is transporting the goods. A registered person may obtain an invoice reference number from the common portal by uploading, on the said portal, a tax invoice issued by him in Form GST INV-1 and produce the same for verification by the proper officer in lieu of the tax invoice and such number shall be valid for a period of thirty days from the date of uploading. In the above case, the registered person will not have to upload the information in Part A of Form GST EWB-01 for generation of E-Way Bill and the same shall be auto populated by the common portal on the basis of the information furnished in Form GST INV-1. Upon generation of the E-Way Bill on the common portal, a unique E-Way Bill number (EBN) generated by the common portal, shall be made available to the supplier, the recipient and the transporter on the common portal.

What is the validity period of E-Way Bill under GST?
The validity of E-Way Bill depends on the distance to be traveled by the goods. For a distance upto 100 km the E-Way Bill will be valid for one day (24 hours) from the relevant date. For every 100 km thereafter, the validity will be additional one day from the relevant date.

Can E-Way Bill be cancelled?
Where an E-Way Bill has been generated under this rule, but goods are either not transported or are not transported as per the details furnished in the E-Way Bill, the E-Way Bill may be cancelled electronically on the common portal. The facility of generation and cancellation of E-Way Bill will also be made available through SMS.

Which documents/devices to be carried by a person-in-charge of a conveyance ?

The person in charge of a conveyance shall carry the invoice or bill of supply or delivery challan, as the case may be; (a) Copy of the E-Way Bill or the E-Way Bill number, either physically or mapped to a radio frequency identification device embedded on the conveyance in such manner as may be notified by the Commissioner or a delivery challan, where the goods are transported other than by way of the supply.

Consolidated E-Way Bill: For multiple consignments being carried in the same vehicle, the transporter to prepare a consolidated E-Way Bill by indicating serial number of each E-Way Bill, on the common portal before commencement of transport of goods.

When should an E-Way Bill be generated?
E-Way Bill is to be generated irrespective of whether the movement of goods is caused by reasons of supply or otherwise. In respect of transportation for reasons other than supply, movement could be in view of export/ import, job-work, SKD or CKD, recipient not known, line sales, sales returns, exhibition or fairs, for own use, sale on approval basis etc.

In which cases E-Way Bill is not required?:
E-Way Bill is not required to be generated in the following cases. (a) Transport of goods as specified in Annexure to Rule 138 of the CGST Rules, 2017. E- Way Bill is not required in case of transportation of exempted goods such as live animals, unfrozen meat, fish, fresh milk, curd, lassi, unbranded paneer ,fresh fruits, vegetables, unbranded rice, flour etc.

All goods of seed quality, salt, bread, firewood, newspaper, mannnually operated or animal driven agri implements, handloom etc.

Also it is not required for goods for personal use, household effects, jewellery and jewellery articles, precious or semi-precious stones, corals, currency, LPG for supply to household and non domestic exempted category and kerosene oil .
(b) Goods being transported by a non-motorised conveyance;
(c) goods being transported from the port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs;
(d) Consignment value less than Rs 50,000;
(e) Where goods are transported for a distance of less than 10 km within the state from the place of business of consignor to the place of business of the transporter for further transportation.

What are the consequences of non-compliances to E-Way Bill rules under GST.?
If E-Way Bills, wherever required, are not issued shall be liable to a penalty of Rs 10,000 or tax sought to be evaded (wherever applicable) whichever is greater. Where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made there under, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure.

What are the benefits of E-Way Bill?
It is hoped that the e-way bill will remove the ills of the erstwhile way bill system prevailing under VAT in different states, which was a major contributor to the bottlenecks at the check posts. Moreover different states prescribed different e-way bill rules which made compliance difficult. The E-Way Bill provisions under GST will be uniform pan India thus making it easier to comply.

It will be boon for honest tax payers. The digital interface will facilitate faster continuous movement of goods. It is bound to improve the efficiency of logistics industry thereby reducing the product cost.

Precautions needed before and during the implementation: E- Way Bill is much needed tool for effective implementation of GST. But it should be enforced in true spirit and should not become a medium for corruption.

As it has to be generated for every movement of goods exceeding value of Rs 50,000 even for reasons other than supply proper care should be taken that innocent people are not harassed.

E-way Bill system should be operationalised only after successful dry runs , otherwise it will again create a mess GSTN is infamous for.

(The author is Past Chairman of ICAI, Nagpur Branch and practising chartered accountant.)