Introduction
As per the advisory issued on 5 January 2023, all the B2B and exporters must provide the six-digit HSN code for all transactions while generating the e-way bills through the web. The government also released an e-way bill portal on 1 June 2024 for easy generation of e-way bills. Let us learn about the new e-way bill system’s implications for various businesses.
What is an e-way bill?
Any GST-registered business cannot transport goods valued at more than Rs 50,000 without an E-Way Bill. An E-Way Bill is an electronically generated document by the supplier to facilitate the movement of goods to the buyer. It is like an identification for the goods and includes information like HSN code, invoice number, supplier’s GST number, etc.
What is an EBN?
When an e-way bill is generated through the e-way bill portal, a unique identifier, also known as an e-way bill number(EBN), is generated. The supplier, recipient and transporter have access to this number. It is advisable to validate GSTIN using the GST search tool to help prevent errors during transportation and compliance.
What does an e-way bill include?
- The e-way bill has details of the sender and the receiver of the goods.
- It includes information about the transporter.
- It also includes information like Invoice number, the date of dispatch and the value of goods being transported.
- It also has a 4-digit HSN code (Harmonised System of Nomenclature code) for the goods.
- The e-way also has information on the transport document number, such as railway receipt number, airway bill number, railway receipt, bill of lading number, and goods receipt number.
- The e-way bill also includes reasons for transportation, for example, supply and return.
Why do you need an e-way bill?
- As per Section 68 of the GST Act, when transporting goods valued at or above fifity thousand an e-way bill is required.
- Any GST-registered business should generate an e-way bill before dispatching goods.
- This e-way bill should be carried by the transporter and produced when asked. The e-way bill is an integral part of the GST framework, ensuring easy compliance and smooth movement of goods.
- For certain specific goods, even if valued at less than Rs 50,000, the e-way bills need to be mandatorily generated.
Who should generate the E-WayBill?
A GST-registered person
A GST-registered person should generate an e-way bill before dispatching goods valued over Rs 50,000. The person can use the e-way bills portal to generate the e-way bill, which the transporter should carry. A GST-registered person should fill out Part A of the e-way bill. The supplier should fill out part A of the GST EWB-01 form to obtain the e-way bill. If the registered person acts as a consignor, consignee, or recipient of goods should fill out Part B of the Form GST EWB-01 under the e-way bill.
An Unregistered person
An e-way bill should be generated even if the supplier is unregistered and the buyer is GST-registered. In this situation, an unregistered person should meet all the regulatory requirements as if they were a supplier.
Transporter
The transporter of the goods who is given the task of transporting the goods can also generate the e-way bill in case the supplier is unable to do so. A transporter can also complete the PART-A of the e-way bill on behalf of the supplier upon receiving authorisation from the supplier. However, if the transporter generates the e-way bill as the transporter of goods, they should fill out PART-B of the FORM GST EWB-01 before the actual movement of the goods.
Cases where it is mandatory to generate an e-way bill regardless of the consignment value
- When the principal supplies the goods to a job worker for further processing, and the job worker is located in a different state, then the principal must generate an e-way bill regardless of the value of the consignment.
- It is mandatory to generate an e-way bill when the handicraft goods are moved across states by a supplier who is exempt from Goods and Services Tax regardless of the consignment’s value.
Benefits of an E-way Bill
Eliminates the need for extensive paperwork
The e-way bills reduce the paperwork and hassle by eliminating the need to carry physical documents like transport permits and transit passes. All the e-way bills are generated electronically through an e-way bill portal, saving the time and human resources spent generating various licenses.
Swift and faster movement of goods
The e-way bills have reduced the need for multiple checkpoints, facilitating swifter and faster delivery of goods across and within the state. The e-way bills are an essential part of the GST framework in India, allowing the government to track the movement of goods and streamline the whole tax compliance process.
Prevent tax evasion
Generating e-way bills requires details such as suppliers’ and buyers’ GSTINs, 4/6-digit HSN codes, and other information. The system of e-way bills prevents tax evasion by making the GST system more transparent and verifiable.
Promotes Compliance within the GST system
The electronically generated e-way bill makes it easy for businesses to adhere to GST regulations because the e-way bill system systemises record-keeping and documentation, reducing the risk of errors.
Creates a transparent system
The e-way bills allow the government to trace goods in real-time. This allows different transport authorities to monitor goods’ movement and quickly identify potential risks.
New updates in E-Way Bill law
According to the new update on 1 February 2024 by NIC, the generation of e-WayBill requires all businesses to share the 6-digit HSN code. All the B2B and export transactions by any taxpayer whose annual aggregated turnover or AATO is more than Rs 5 crore are required to give the 6-digit HSN code while generating the e-waybill for the transportation or export of the goods. Even if the businesses have an AATO of less than Rs. 5 crores, they must at least provide a 4-digit HSN code.
The new rule was implemented on 1 February 2024, so all businesses must change their e-way bill generation system. Companies should enter 4/6 digit HSN codes per AATO when generating their e-waybill.
Conclusion
The new update in the e-way bill system makes it easier for the authorities to track the movement of goods, ensuring they can quickly identify potentially risky goods. This update also ensures that the GST system is transparent and verifiable, making the tax filing process more efficient and equitable. Businesses must embrace the new e-waybill system quickly and swiftly to maintain operational efficiency, minimise logistics bottlenecks and create a streamlined taxation environment. By following the latest updates, businesses can ensure compliance with their tax filing process and create a robust and fair economic and tax ecosystem.
Frequently Asked Questions
Can someone have two invoices in a single e-way bill?
One can generate only one e-way bill for a single invoice. So, someone can’t have a single e-waybill for two invoices. However, one can use consolidated e-waybills to club together two or more e-waybills.
Do supply services also need an e-way bill generated?
No, e-waybill involves the transportation of goods and does not apply to service-oriented transactions.
Is generating an e-invoice mandatory for e-way bills?
E-invoice is optional for generating e-way bills unless the business makes any B2B sales and exports.
What is the minimum distance for which an e-waybill is required?
Any goods movement of 50 km or above requires the generation of an e-way bill. The maximum distance for which e-way bills must be generated is 4,000 km.
Can someone update or modify the details in the already generated e-way Bill?
Only the PART-B details filled by the transporter, such as vehicle number, can be updated, but other information, like in PART-A, cannot be modified.
