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Rule 138 Information to be furnished prior to commencement of movement of goods and generation of e-way bill.

Central Goods and Services Tax Rules, 2017

At a Glance

The e-way bill framework is built around Rule 138 of the Central Goods and Services Tax Rules, 2017, which requires prior electronic information for movement of goods in specified cases and links that requirement to documentary control, transporter responsibility, validity, cancellation, and transit safeguards. The core threshold is the consignment value exceeding fifty thousand rupees, subject to the stated exceptions and special regimes.

Background & Context

The e-way bill mechanism operates as a transit-control system under the GST framework. It functions alongside Section 68 of the Central Goods and Services Tax Act, 2017, which empowers the Government to require the person in charge of a conveyance carrying goods above the prescribed value to carry such documents and devices as may be prescribed, and to produce them for verification when intercepted.

Rule 138 gives practical content to that statutory power. It prescribes when information must be furnished before movement begins, who may furnish it, how Part A and Part B of FORM GST EWB-01 operate, and when FORM GST EWB-02 may be used for consolidated movement. The rule is therefore not merely a formality: it is the documentary basis on which lawful movement is demonstrated during transit.

The rule also works in tandem with Rule 55 of the Central Goods and Services Tax Rules, 2017, which permits a delivery challan in lieu of invoice for specified movements, including goods moved for job work or for reasons other than by way of supply. Where a delivery challan is used, Rule 55(3) requires that the movement be declared as specified in Rule 138.

A further safeguard is embedded in Rule 138A of the Central Goods and Services Tax Rules, 2017, which states what the person in charge of a conveyance must carry and how verification may be simplified or substituted in appropriate cases. This provision is essential because e-way bill compliance is ultimately judged in transit, not merely at the time of generation.

For certain high-value intra-State movements of gold, precious stones and similar goods, Rule 138F creates a special regime where a State or Union territory Commissioner mandates furnishing of information. That special rule is relevant because it shows that the e-way bill structure is not uniform in every factual setting; specific commodities may attract an added compliance layer.

Key Issues / Provisions

• When does e-way bill generation become mandatory under Rule 138?
• Who bears the responsibility to furnish Part A and Part B information?
• What documents must travel with the goods under Rule 138A?
• How do validity, cancellation and transfer of conveyance operate?
• What are the exceptions where no e-way bill is required?
• What is the legal effect of non-compliance in transit?
• How does the special Rule 138F regime operate for selected intra-State movements?

Detailed Analysis

Rule 138 begins with the main trigger. Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees, whether in relation to a supply, for reasons other than supply, or due to inward supply from an unregistered person, must, before commencement of movement, furnish information relating to the goods in Part A of FORM GST EWB-01 electronically. The rule further states that a unique number is generated on the common portal once the information is furnished.

The expression consignment value is defined in the Explanation to Rule 138. It means the value determined under section 15, as declared in the invoice, bill of supply or delivery challan issued for the consignment, and it includes central tax, State or Union territory tax, integrated tax and cess charged, if any. The rule also states that where one invoice covers both exempt and taxable goods, the value of exempt supply of goods is excluded. This definition is important because the threshold is not applied on a bare commercial price alone; it is tied to the statutory valuation framework.

The first proviso to Rule 138(1) allows a transporter, on authorisation from the registered person, to furnish Part A. The second proviso allows an e-commerce operator or courier agency, on authorisation from the consignor, to furnish Part A where the goods are transported through such operator or agency. These provisos matter because the rule recognises that the practical logistics of movement may be handled by intermediaries, but the legal responsibility remains anchored to an authorised compliance pathway.

The third proviso to Rule 138(1) creates a special rule for principal-to-job-worker movement. Where goods are sent by a principal located in one State or Union territory to a job worker located in another State or Union territory, the e-way bill must be generated either by the principal or the job worker, if registered, irrespective of the value of the consignment. The fourth proviso separately covers handicraft goods transported inter-State by a person exempted from registration under clauses (i) and (ii) of section 24; in such cases the person must generate the e-way bill irrespective of value.

Rule 138(2) deals with movement by the registered person as consignor or the recipient as consignee, whether in own conveyance, hired conveyance or public conveyance, by road. In that case, the person concerned generates FORM GST EWB-01 electronically after furnishing information in Part B. Rule 138(2A) extends the scheme to railways, air and vessel. The registered supplier or recipient generates the e-way bill and may furnish Part B either before or after commencement of movement, but where transport is by railway, the railways shall not deliver the goods unless the required e-way bill is produced at the time of delivery.

Rule 138(3) addresses the common transporter scenario. If the e-way bill is not generated under sub-rule (2) and the goods are handed over to a transporter for road transport, the registered person must furnish transporter details on the common portal and the transporter generates the e-way bill on that basis. Two practical qualifiers follow from the text. First, the registered person or transporter may choose to generate and carry the e-way bill even if the consignment value is less than fifty thousand rupees. Second, where movement is caused by an unregistered person, the person or the transporter may, at their option, generate the e-way bill in FORM GST EWB-01.

Part B is central to road movement. Explanation 2 to Rule 138(3) provides that the e-way bill shall not be valid for movement of goods by road unless the information in Part B of FORM GST EWB-01 has been furnished, except in the specified cases covered by the third proviso to sub-rule (3) and the proviso to sub-rule (5). This is a major compliance safeguard because it prevents a partially filled e-way bill from being treated as complete.

The rule also covers special logistical situations. Where the goods are transported for a distance of up to fifty kilometres within the State or Union territory from the place of business of the consignor to the place of business of the transporter for further transportation, the supplier, recipient or transporter may not furnish the conveyance details in Part B. Likewise, where goods are transferred from one conveyance to another, the consignor, recipient or transporter must update the conveyance details before transfer and further movement, subject to the fifty-kilometre local movement exception from the transporter's place of business to the consignee's place of business.

Rule 138(5A) permits assignment of the e-way bill number to another registered or enrolled transporter for updating Part B for further movement of the consignment. The proviso is important: once the conveyance details have been updated by a transporter in Part B, the consignor or recipient who furnished Part A cannot assign the number to another transporter. This prevents repeated reassignment after operational control has already shifted.

Rule 138(6) recognises consolidated movement. Where multiple consignments are intended to be transported in one conveyance, the transporter may indicate the serial numbers of the e-way bills for each consignment and generate FORM GST EWB-02 on the common portal prior to movement. This is a practical facility, but it does not replace the need for individual e-way bills where the rule requires them.

Rule 138(7) is the transporter-generated fallback. Where neither consignor nor consignee has generated FORM GST EWB-01 and the aggregate of the consignment value of goods in the conveyance exceeds fifty thousand rupees, the transporter shall generate FORM GST EWB-01 on the basis of the invoice, bill of supply or delivery challan, as the case may be, and may also generate FORM GST EWB-02. This provision ensures that the movement is not left without an e-way bill merely because the primary parties did not act first.

The rule also links the e-way bill data to return compliance. Rule 138(8) states that Part A information is made available to the registered supplier on the common portal and may be used for furnishing details in FORM GSTR-1. Where the information is furnished by an unregistered supplier or recipient, electronic intimation is to be given if mobile number or e-mail is available. This creates a reconciliation trail between transport documentation and outward supply reporting.

Cancellation is addressed in Rule 138(9). If an e-way bill has been generated but goods are not transported, or are not transported as per the details furnished, the e-way bill may be cancelled electronically within twenty-four hours of generation. The rule also states that cancellation is not available if the e-way bill has been verified in transit under rule 138B. In the current text, the unique number generated under sub-rule (1) is valid for fifteen days for updation of Part B.

Validity is governed by Rule 138(10). For goods other than over-dimensional cargo and multimodal shipment involving at least one leg by ship, the validity is one day for up to two hundred kilometres and one additional day for every additional two hundred kilometres or part thereof. For over-dimensional cargo and the specified multimodal shipment, the validity is one day for up to twenty kilometres and one additional day for every further twenty kilometres or part thereof. The Commissioner may extend validity by notification for specified categories of goods, and in exceptional circumstances, including trans-shipment, the transporter may extend validity after updating Part B, if required. The rule also states that the validity may be extended within eight hours from the time of expiry.

Rule 138(11) and (12) provide an important transactional safeguard. The details of the e-way bill are made available to the supplier or recipient, as the case may be, on the common portal, and the supplier or recipient must communicate acceptance or rejection of the consignment. If no communication is made within seventy-two hours of the details being made available or by the time of delivery, whichever is earlier, acceptance is deemed. This protects the registered recipient from silent burden while also preventing indefinite uncertainty for the consignor.

Rule 138(13) gives the e-way bill nationwide effect: an e-way bill generated under the rule, or under the corresponding rule of any State or Union territory, is valid in every State and Union territory. That feature is essential in a destination-oriented transport regime because it prevents the need for fresh transit documentation at each border.

Rule 138(14) contains the non-applicability carve-out. No e-way bill is required where the goods are specified in the Annexure, transported by a non-motorised conveyance, moved from customs port or airport-linked locations to an inland container depot or container freight station for customs clearance, moved within notified local areas, or are among the specified exempt or excluded categories. The rule also excludes alcoholic liquor for human consumption, petroleum crude, high speed diesel, motor spirit, natural gas and aviation turbine fuel, supply treated as no supply under Schedule III, goods under customs bond or customs supervision/seal, transit cargo to or from Nepal or Bhutan, movement by defence formations, transport by rail of goods where the consignor is the Central Government, State Government or local authority, empty cargo containers, and short movement up to twenty kilometres to and from a weighbridge subject to a delivery challan under Rule 55. The separately listed Annexure includes, among others, LPG for household and NDEC customers, PDS kerosene, postal baggage, pearls and precious stones, jewellery, currency, used personal and household effects, and coral.

Rule 138A complements Rule 138 by specifying what must be carried by the person in charge of a conveyance. The person must carry the invoice or bill of supply or delivery challan, as the case may be, and either a copy of the e-way bill in physical form, the e-way bill number in electronic form, or a form mapped to RFID where notified. In case of imported goods, a copy of the bill of entry must also be carried, and the bill of entry number and date must be indicated in Part A of FORM GST EWB-01. The rule also allows the Commissioner to require certain transporters to obtain a unique RFID device and map the e-way bill to it.

Rule 138A further recognises that, where invoice is issued in the QR code with embedded IRN format under Rule 48, the QR code may be produced electronically in lieu of the physical tax invoice, and Part A of FORM GST EWB-01 may be auto-populated from FORM GST INV-1. This is a documentary safeguard because it aligns invoice verification with e-way bill data rather than treating them as isolated documents.

For a special class of goods, Rule 138F creates an intra-State compliance system for goods specified against serial numbers 4 and 5 of the Annexure to Rule 138(14), namely pearls, precious stones, precious metals and jewellery-related items. The rule applies only where the Commissioner of State tax or Union territory tax mandates furnishing of information and the consignment value exceeds such amount, not below rupees two lakhs, as may be notified in consultation with the jurisdictional central tax authority. In such a case, every registered person causing intra-State movement of the specified goods must furnish Part A before commencement of movement and a unique number is generated. Part B is not required for that special category, and the provisions of Rule 138(10), (11) and (12) and Rules 138A to 138E apply mutatis mutandis. The rule also permits e-commerce operator or courier agency authorisation and provides a cancellation window of twenty-four hours, subject to transit verification limitations.

Enforcement flows through Section 129. Where goods are transported or stored in transit in contravention of the Act or the rules, the goods, conveyance and related documents are liable to detention or seizure. Release follows payment of the prescribed penalty or furnishing of security. Where the owner comes forward, the penalty is equal to two hundred per cent of the tax payable on such goods; for exempted goods, it is two per cent of the value of goods or twenty-five thousand rupees, whichever is less. Where the owner does not come forward, the penalty is fifty per cent of the value of the goods or two hundred per cent of the tax payable, whichever is higher; for exempted goods, it is five per cent of the value of goods or twenty-five thousand rupees, whichever is less. The proper officer must issue notice within seven days of detention or seizure, pass an order within seven days of service of notice, and give an opportunity of hearing. If the amount is not paid within fifteen days from receipt of the order, the goods or conveyance may be sold or otherwise disposed of to recover the penalty.

Practical Implications

• Before movement begins, identify whether the trigger is supply, movement for other reasons, inward supply from an unregistered person, or a special category such as job work or handicraft movement.
• Ensure the correct document is chosen at the outset: invoice, bill of supply or delivery challan under Rule 55, as the case may be.
• Check whether Part A alone is enough at the planning stage, or whether Part B must be completed before road movement becomes valid.
• Use transporter authorisation carefully, because responsibility may shift to the transporter for filing or continuation of Part B.
• Keep the person in charge of the conveyance equipped with the invoice or challan and the e-way bill copy, number, or permitted electronic substitute under Rule 138A.
• For rail, air and vessel movement, remember the separate mechanics under Rule 138(2A), including the railways' obligation not to deliver without production of the required e-way bill.
• Use the cancellation facility within twenty-four hours only where the goods are not moved or are not moved as declared, and only if transit verification has not occurred.
• Track validity by distance and cargo type, especially where over-dimensional cargo or multimodal shipment involving ship transport is involved.
• Where gold, precious stones or jewellery are moved intra-State in a notified regime, verify whether Rule 138F applies and whether the notified threshold has been crossed.
• Do not overlook the penalty and detention consequences under Section 129, because documentary defects in transit can escalate quickly into seizure and monetary exposure.

Key Takeaways

• Rule 138 is the core e-way bill provision and the central compliance gateway for movement of goods above the prescribed threshold.
• The system is document-led: Part A, Part B, the correct invoice or challan, and the conveyance details all play distinct roles.
• Part B is especially critical for road movement, because an e-way bill is not valid for road transport unless Part B is furnished, subject to the stated exceptions.
• Rule 138A and Rule 55 are practical companions to Rule 138, because they determine what the transporter carries and when delivery challans may replace invoices.
• Rule 138F introduces a special compliance regime for notified intra-State movement of precious goods with a higher value threshold and limited procedural variation.
• Section 68 authorises inspection, while Section 129 supplies the enforcement consequence; together they make e-way bill compliance a substantive transit obligation rather than a clerical formality.

Full Text:

Rule 138 Information to be furnished prior to commencement of movement of goods and generation of e-way bill.