TaxTMI 
TaxTMI 
Introduction
E-way bill is an electronic document generated on the GST e-way bill portal for movement of goods. It is not a tax invoice. It is a movement document.
The object of e-way bill is to track movement of goods and reduce tax evasion during transportation. It helps the department verify whether goods moving on road, rail, air or vessel are supported by proper documents.
The legal basis is section 68 of the CGST Act, 2017 read with Rule 138 of the CGST Rules, 2017. Section 68 empowers the Government to require the person in charge of a conveyance carrying goods above the prescribed value to carry prescribed documents. Rule 138 prescribes e-way bill for such movement.
What is an e-way bill?
An e-way bill is required when goods of consignment value exceeding Rs. 50,000 are moved. It is generated electronically before commencement of movement.
It applies where movement is:
Type of movement | Example |
In relation to supply | Sale of goods from Delhi to Jaipur |
For reasons other than supply | Stock transfer, exhibition, job work |
Due to inward supply from unregistered person | Registered buyer receives goods from an unregistered supplier |
Rule 138 applies even when there is no sale. Therefore, the test is not only 'sale'. The test is movement of goods with prescribed value.
Basic need for e-way bill
The e-way bill system creates a digital trail of goods movement. It connects invoice, supplier, recipient, transporter and vehicle details.
It serves three purposes.
First, it helps the taxpayer prove that goods are moving under proper documents.
Second, it assists officers in checking goods in transit without relying only on manual papers.
Third, it helps the GST system compare movement of goods with returns and invoices.
However, e-way bill is not conclusive proof of tax liability. It is only one important compliance document. A mismatch between e-way bill and GST returns may require explanation, but tax demand should not be made mechanically without examining facts.
Who needs to prepare e-way bill?
The primary responsibility is on the registered person who causes movement of goods.
Situation | Who should generate e-way bill? |
Supplier transports goods himself | Supplier |
Recipient arranges transport | Recipient |
Goods handed over to transporter | Supplier/recipient may fill Part A and transporter may fill Part B |
Unregistered supplier to registered recipient | Registered recipient, if known at commencement of movement |
Unregistered transporter | Can enrol on e-way bill portal and generate e-way bill |
Own use movement by any person | Such person may enrol and generate e-way bill |
The consignor, consignee or transporter can generate the e-way bill. Even an unregistered transporter can enrol on the common portal and generate e-way bill for movement of goods for clients.
Documents required before generation
Before generating e-way bill, the person should keep basic documents ready.
Requirement | Details |
Invoice / bill of supply / delivery challan | Main document supporting movement |
GSTIN / enrolment ID | Supplier, recipient or transporter details |
Transport document number | GR, LR, railway receipt, airway bill etc. |
Vehicle number | Required for road movement |
Part A details | Invoice and goods details |
Part B details | Transport and vehicle details |
The invoice or bill of sale or delivery challan, transporter ID, transport document number or vehicle number should be available before generation.
Consignment value
Consignment value means the value declared in the invoice, bill of supply or delivery challan. It includes GST and cess, if charged.
Where one invoice contains taxable and exempt goods, the value of exempt goods is not included for this purpose. Freight charged separately by the transporter is also not included in consignment value.
E-way bill even below Rs. 50,000
Normally, e-way bill is linked with Rs. 50,000 threshold. But in two important cases, e-way bill may be required even below Rs. 50,000:
Case | Requirement |
Inter-State job work | Principal or registered job worker has to generate e-way bill irrespective of value |
Inter-State movement of handicraft goods by specified exempt person | E-way bill required irrespective of value |
For job work, Rule 138 provides that where goods are sent by a principal in one State or Union Territory to a job worker in another State or Union Territory, e-way bill is required irrespective of consignment value.
Exemptions from e-way bill
Rule 138(14) gives important exemptions. In these cases, no e-way bill is required.
Exemption | Example / remark |
Goods specified in Annexure to Rule 138(14) | LPG for household/NDEC customers, kerosene under PDS, postal baggage, currency, used personal effects etc. |
Transport by non-motorised conveyance | Handcart, cycle-rickshaw etc. |
Movement from customs port/airport/air cargo/land customs station to ICD/CFS | For customs clearance |
Movement within areas notified by State/UT | Local area exemption by State |
Goods covered under Notification No. 2/2017-Central Tax (Rate), except de-oiled cake | Exempt goods |
Alcoholic liquor, petroleum crude, HSD, petrol, natural gas, ATF | Goods outside GST levy |
No-supply transactions under Schedule III | Example: transactions treated neither as supply of goods nor as supply of services |
Goods under customs bond, customs supervision or customs seal | Customs-controlled movement |
Transit cargo to or from Nepal or Bhutan | Transit movement |
Goods exempt under Notification No. 7/2017-CT(R) and 26/2017-CT(R) | Specified exempt movements |
Movement caused by defence formation under Ministry of Defence | As consignor or consignee |
Government/local authority consignor sending goods by rail | Rail transport by Government/local authority |
Empty cargo containers | No e-way bill required |
Goods moved for weighment | No e-way bill is required where goods are transported up to 20 km from the consignor's place of business to a weighbridge for weighment, or from the weighbridge back to the consignor's place of business, subject to the condition that the movement is accompanied by a delivery challan issued under Rule 55. This exemption is specifically provided in Rule 138(14)(n) of the CGST Rules, 2017. |
Empty LPG cylinders moved for reasons other than supply | No e-way bill required |
A separate relaxation is also available for not filling Part B of Form GST EWB-01 in certain short-distance movements. This is not a complete exemption from e-way bill. It is only a relaxation from furnishing vehicle/conveyance details in Part B.
Where goods are transported for a distance up to 50 km within the same State or Union Territory from the consignor's place of business to the transporter's place of business for further transportation, the supplier, recipient or transporter may generate the e-way bill without furnishing Part B details. This relaxation is covered by the proviso to Rule 138(3) of the CGST Rules, 2017. The same principle also applies where goods are moved up to 50 km from the transporter's place of business finally to the consignee's place of business under the proviso to Rule 138(5).
Therefore, two situations should be clearly separated:
Situation | Legal effect |
Goods sent up to 20 km to weighbridge and brought back with Rule 55 delivery challan | No e-way bill required under Rule 138(14)(n) |
Goods moved up to 50 km within same State/UT from consignor to transporter for further transportation | E-way bill may be required, but Part B vehicle details need not be filled at that stage under Rule 138(3) |
Documents to be carried
The person in charge of the conveyance should carry invoice, bill of supply or delivery challan, as applicable. He should also carry the e-way bill number electronically or physically, wherever required.
In case of imported goods, the person in charge should also carry bill of entry details and mention the bill of entry number and date in Part A of Form GST EWB-01.
Cancellation and correction
If wrong details are entered in e-way bill, the bill cannot be edited. The proper course is to cancel the wrong e-way bill within the permitted time and generate a fresh e-way bill with correct details.
This is important because vehicle number, GSTIN, invoice value, HSN and destination errors may create detention issues during transit.
Conclusion
E-way bill is a basic but very important GST compliance for movement of goods. It is required mainly where consignment value exceeds Rs. 50,000, but certain cases like inter-State job work and handicraft goods require e-way bill even below that limit.
Every business should check three points before movement:
Is there movement of goods?
Is consignment value above Rs. 50,000 or covered by special rule?
Is any Rule 138(14) exemption available?
If exemption is not available, e-way bill should be generated before movement. Proper invoice, delivery challan, transporter details and vehicle details should be maintained to avoid detention, penalty and litigation.
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CA Rajender Arora