An E-way bill is an electronic receipt that tracks the transfer of goods from one place to another. Generated on the GST portal, E-way bills are necessary permits for the inter and intra-state transport of goods valued over ₹50,000.
Every E-way bill outlines essential details about the consignment, including the goods present, the consignor, the recipient, and the transporter. The corresponding unique bill number generated is specific for each consignment or shipment and can thus be used to track the same.
How does an E-way Bill Work?
Introduced in April 2018, the E-way bill system ensures that the movement of goods complies with GST regulations and prevents tax evasion practices. The E-way bill system essentially simplifies the goods transportation and compliance mechanism. Apart from easing tracking issues, E-way bills help solve many supply chain monitoring issues making the process more transparent.
As per GST rules, E-way bills must be generated before the consignment or shipment is dispatched to preserve all these benefits. E-way bills need to be generated under the following circumstances:
- When goods are being supplied.
- When there is an inward supply of goods from an unregistered person.
- When goods are being transported for non-supply transactions like import/export, return, supply for exhibition/fair, consumption, etc.
When it comes to shouldering the burden of E-way bill generation, the following rules are to be followed:
- The registered consignor or consignee will be responsible for the E-way bill generation if the transport is through own or hired means (road/rail/air/vessel).
- The transporter must generate the E-way bill if the transport happens through a transporter (by road), and both the consignee and consignor fail to generate it.
- The registered recipient must complete the E-way bill generation procedure if the supplier is unregistered.
How to Generate an E-way Bill?
E-way bill generation happens through the GST E-way Bill Portal. You will need your GSTIN and other login details to initiate the E-way bill generation process. Unregistered transporters can enrol on the E-way Bill System to generate a Transporter ID that can be used to create E-way bills. For the non-supply-related movement of goods, regular citizens can also enrol on the portal and generate E-way bills.
After successfully logging into the portal, under the ‘E-way Bill’ section, you will find options to generate new E-way bills. Upon clicking the option, you then need to fill in the relevant details for the bill, specifying the transaction type (inward/outward), document type (bill/invoice/challan), etc. Here, you will also have to fill in details about the goods being transported, transportation mode, and distance travelled.
Once the system verifies the details, your E-way bill will be ready. This E-way bill number (EBN) will be a 12-digit number unique to the consignment in question and available to both the supplier and recipient. You can also generate and cancel E-way bills through SMS, Android App, GSP (Goods and Services Tax Suvidha Provider), or site-to-site integration. Moreover, through the Bulk Generation facility, large-sized logistic operators can generate multiple E-way bills at once, saving both time and effort.
Validity and Penalties
The validity of an E-way bill depends on the distance travelled and the size of the cargo. Here’s how the validity periods are determined:
| Type of Cargo | Validity* (Calculated from the Date of Generation) |
| Normal Cargo | 1 day for up to 200 Km; Additional 1 day for every 200 Km thereafter. |
| Over-Dimensional Cargo** | 1 day for up to 20 Km; Additional 1 day for every 20 Km thereafter. |
*As per the latest amendment in 2020.
**Cargo exceeding dimension limits prescribed in Rule 93 of the Central Motor Vehicles Rules, 1989.
The validity of E-way bills can also be extended if the consignment doesn’t reach the destination on time. As per the latest extension rules, extension requests can be made anywhere between 8 hours before and 8 hours after the expiry time.
If your E-way bill expires or you fail to generate one when transporting goods valued over ₹50,000, you will face certain penalties. As penalty, the concerned individual will have to pay ₹10,000 or the total tax evaded, whichever is greater. Non-payment of the amount can lead to the seizure and detainment of the vehicle.
Exceptions to E-way Bill Generation
Under the following circumstances, you don’t need to generate an E-way bill:
- When the consignment value is less than ₹50,000.
- When the goods being shipped are GST exempt.
- Goods are transported using non-motorised conveyance modes.
- Goods are transported from an airport, cargo complex, port, and land customs station to an inland container depot or freight station for customs clearance.
- Goods specified under rule 138(14)(d) of the concerned state’s SGST Rules, 2017.
- Goods covered under the Annexure to Rule 138 of the CGST Rules, 2017.
You should also note that the ₹50,000 valuation limit doesn’t apply under the following two cases:
- When the goods are being transported from a principal to a worker in an inter-state transaction.
- When handicrafts are being transported by a supplier, who is exempted from GST registration.
The Bottom Line
E-way bills streamline the transportation and taxation systems, simplifying the corresponding compliance and regulation procedures. The digital E-way bill system helps the country do away with state border checkposts, ensuring faster movement of goods and better turn-around time.
E-way bills have also become a metric for measuring business activity in the country. GST officers are using these digital receipts to detect tax evasions faster. With lesser tax evasions and improving GST revenue, the possibility of the government pursuing disinvestment measures for revenue generation also lowers.
