E-way Bill: Definition, System, Rules, Applicability & Process

What is eWay Bill?

The electronic way bill serves as a compliance tool to regulate the transportation of goods and commodities. The individual who starts the movement of the goods creates an eWay bill on the GST site by uploading the necessary data using a digital interface, which is the official site: ewaybillgst.gov.in. eWay bills are generated prior to the start of the items' transportation. 

Whenever an eWay bill is generated, a unique Eway Bill Number (EBN) is allocated and readily available to all three connected parties: the supplier, the recipient, and the transporter.

Why was the eWay bill introduced?

The implementation of the eWay Bill system was meant to facilitate seamless movement of goods across the nation. It serves as an important instrument for monitoring the transit of goods, thereby stopping the prevalence of fake invoices and keeping a check on tax evasion within the country.

Structure of an eWay bill

If you are wondering how to create an eWay bill, remember that the eWay bill has been divided into two parts, namely, Part A and Part B, and the details are furnished in FORM GSTEWB-01:

• Part A requires the information of the GSTIN of the supplier and recipient, place of dispatch and delivery, document number, document date, the value of the goods, HSN code, and reason for transportation.
• Part B requires a vehicle number for road transport (not for rail and or air or vessels) & document numbers like temporary vehicle registration number or defence vehicle number.
   

Every registered person under GST fills out Part A of the form to an eWay bill. Part B of the form is filled out by the recipient of the goods, the consignor, or the consignee.

If the recipient is an unregistered person, he shall generate an eWay bill and complete the rules as if he were the supplier.

Consolidated eWay bill

In cases where the transporter is moving more than one consignment through a single conveyance or vehicle, he/she needs to use Form GSTEWB-02 to produce a consolidated eWay bill. The transporter must have all the individual eWay bills of all the goods in order to create a consolidated eWay bill. 

When is an eWay bill applicable?

The eWay bill system applies within a state as well as between different states during the transportation of goods or commodities. When it is an intra-state movement, individual states have the authority to alter its implementation in accordance with GST regulations.

Under the CGST Act 2017, the definition of supply for the eWay bill mechanism includes:

- All types of transactions involving goods or services, including sale, barter, exchange, transfer, rental, lease, license, or disposal,

- Transactions conducted for consideration in the course of business,

- Transactions conducted for consideration outside the course or furtherance of business, and

- Transactions conducted without any consideration.

Who Should Generate an eWay Bill?

• An eWay bill must be generated when goods of more than Rs 50,000 in value are moved to or from a registered person. You can say the eWay bill is the said amount. However, a registered person or the transporter may choose to generate and carry an eWay bill despite the value of goods being less than Rs 50,000.
   
• Unregistered persons are also required to generate an eWay Bill. However,where an unregistered person delivers a consignment to a registered person, the receiver must ensure all the compliances have been adhered to as if they were the supplier.

• Transporters who are moving goods by road, air, rail, etc., also need to generate an eWay Bill if the supplier has not done so.

Who is Not Required to Generate an eWay Bill?

The transporters need not generate the Eway bill (as Form EWB-01 or EWB-02) where all the consignments in the conveyance :

• Individually (single document**) is less than or equal to Rs 50,000 BUT
• In Aggregate (all documents** put together) exceeds Rs 50,000

**Document means Tax Invoice/Delivery challan/Bill of supply

Unregistered Transporters will be issued a Transporter ID upon enrolling on the eWay bill portal, after which eWay bills can be generated.

Cases when eWay Bill is not required at all

eWay bill rules do not apply In the following cases:

• Transportation is via a non-motor vehicle
• When goods are being transported from a port or land customs station to either an ICD (Inland Container Depot) or a CFS (Container Freight Station) for customs clearance.
• Transit cargo transported within Nepal and Bhutan
• Transportation of goods under the Ministry of Defence as a consignor or consignee
• Movement of empty cargo containers
• The consignor transports goods to or from the source or place of business and a weighbridge for weighing at a distance of 20 km. A delivery challan is to be accompanied along with the goods.
• When the consignor is the Central/State Government or a local authority and the goods are being transported by rail.
• Goods specified as exempt from eWay bill requirements as mentioned in the respective State/Union territory GST Rules.
• Goods transported are alcoholic liquor meant for human consumption and those products which the GST Council does not recommend. These include petroleum, crude oil, petrol, diesel, natural gas, and aviation turbine fuel.

Modes of generating eWay bill

There are two options available for those wanting to create eWay bills. They can do it either through the GST portal dedicated to eWay bill generation or through SMS. Those who do not have access to the website can do it through their mobile phones via SMS. Apart from eWay bill creation, updates and modifications can be easily done through the SMS facility. 

Documents or Details required for eWay bill Generation

• Invoice/ Bill of Supply/ Challan related to the consignment of goods
• If transport is by road, then Transporter ID or Vehicle number
• If transport is by rail, air, or ship, then Transporter ID, Transport document number, and date on the document

Validity of eWay Bill

The validity of an eWay bill is listed below. It is usually calculated from the date and time of generation. 

Cancellation of eWay bill

Cancellation of an eWay bill can happen in two scenarios. If the goods are not transported at all or if the details mentioned in the bill do not match. It can be cancelled online directly via the common portal or through a facilitation center designated by the commissioner. Remember that the cancellation must occur within 24 hours of the eWay bill's generation. However, if the eWay bill has already been verified in transit by the authorities, it cannot be cancelled.

Conclusion:

The eWay bill has helped considerably in the smooth movement of goods. Let there be no doubt about eWay bill meaning or its working. All said and done, it has efficiently replaced the complex and time-consuming waybill system of the past. Now, there’s no delay at checkpoints, tax compliance is strictly maintained, and a uniform and transparent business environment is nurtured. In essence, it is a clear step forward for India’s logistics sector. 

FAQs

Q1. What is the difference between invoice and EWay bill?

Ans. An invoice is a document that records the sale of products or services to a customer, and on the other hand an e-way bill is an electronic document that's required for the transportation of goods. An E-Way Bill is specifically required when the value exceeds Rs. 50,000. 

Q2. What is the limit for an e-way bill?

Ans. The limit for an e-way bill varies from state to state and within state, so you need to consult the respective authority of your state to know the exact limit.

Q3. Is EWAY bill compulsory?

Ans. Eway bill is mandatory only when there is a movement of goods of more than Rs 50,000 in value to or from a registered person. 

Q4. What is the penalty for not having EWAY bill?

Ans. Failing to generate an invoice or e-way bill for goods transportation is a serious offense. You could face a fine of ₹10,000 or the amount of tax you attempted to evade, whichever is higher. This highlights the importance of compliance with GST regulations to avoid penalties.

Q5. How long is an EWAY bill valid?

Ans. Validity for e-way bills depends on the type of vehicle and distance traveled:

• Regular Vehicles: One day of validity for every 100 kilometers or part thereof.
• Over Dimensional Cargo Vehicles: One day of validity for every 20 kilometers or part thereof.