Update: At the 26th GST Council meeting, it has been decided to implement he inter-state e-way bill from 1st April, 2018. For intra-state movement, the e-way bill will be rolled out in a phased manner starting from 15th April, 2018, such that all states are covered by 1st June, 2018

As per the 22nd GST Council meeting held on the 6th of October, 2017, it was decided to introduce the e-way bill in a staggered manner from the 1st of January, 2018, with a nationwide roll-out being done from the 1st of April, 2018. Thus businesses initially had the time till the end of the financial year, to get prepared for the right systems to welcome the e-way bill, and also to get adjusted to the various changes being brought in to make GST simpler. However, at the 24th GST Council meeting held on the 16th of December, 2017, it was announced that e-way bill will go live from 1st of February, 2018, 2 months in advance from the original plan.

India being a federal nation, the Central Government is empowered by the Constitution to levy duties and taxes on the manufacturing and rendering of services. The government in the states are empowered to levy tax on intrastate sale of goods, in which movement of goods happen within state jurisdictions. When the sale of goods involves movement of goods between different states, the Centre is empowered to levy tax on such sales, and the revenue so collected, will be shared by the Centre and the State.

While the constitution clearly stipulates the powers to the governments at the Centre and the states, the biggest challenge especially for the states is to monitor the movement of goods – within the state and outside the state.

There was rampant evasion of taxes and leakage of revenue to the states. Thus, in order to tackle the tax evasion and misuse of the system, most of the states have multiple check-post along their national highways and borders. These check-posts mainly monitor the movement of goods and ensure that the relevant duties/ taxes have been paid on goods.

A person causing movement of goods has to be equipped with various documents like invoice, challan, road permits, way bill, and so on which need to be produced at the check-post for inspection.

Current regime

Today, various state governments have devised their own system to track the movement of goods within and to outside their borders. For example, some states have necessitated the registered dealer to declare the details of the goods based on the consignment value or as designated/notified goods when they are transported. The documents like the permit form, way bill, among others have to be  obtained. Apart from these, certain states mandate the transporter of goods to obtain the transit pass or declaration form.

With evolution of technology, there are significant efforts by various states to digitalize the procedures involved in the movement of goods, like the e-Sugam introduced by Karnataka. Under e-Sugam, a registered dealer transporting goods worth Rs.20,000 or more has to upload the details of the consignment and obtain a unique reference number. This is shared with the transporter and he can then simply quote the number to the officer at check-post.

In other states too, a similar mechanism has been introduced which facilitates the registered dealer to electronically declare the details of the consignment and obtain the required forms for the movement of goods.

Under GST

Under GST, the process and procedural aspects for the movement of goods are prescribed in the e-way bill rules. E-Way bill stands for Electronic Way Bill. It is usually a unique bill number generated for the specific consignment involving the movement of goods. Under GST, a registered person who intends to initiate a movement of goods of value exceeding Rs 50,000 should generate an e-Way bill.

Under GST, a registered person who intends to initiate a movement of goods of value exceeding Rs 50,000 should generate an e-Way bill.CLICK TO TWEET

Applicability and generation of e-way bill

Questions Answers
When is the e-way bill applicable? It is applicable for any consignment value exceeding Rs.50,000. Even in case of inward supply of goods from unregistered person, e-way bill is applicable.
When should I generate the e-way bill? The e-way bill  needs to be generated before the commencement of movement of goods.
Who should generate the e-way bill? When goods are transported by a registered person, either acting as a consignee or consignor in his own vehicle, hired vehicle,railways,by air or by vessel, the supplier or recipient of the goods should generate the e-way Bill.
When the goods are handed over to a transporter, the e-way bill should be generated by the transporter. In this case, the registered person should declare the details of the goods in a common portal.
In case of inward supplies from an unregistered person, either the recipient of supply or the transporter should generate the e-way bill.
What is the form applicable for generating e-way bill? Form GST EWB-01 is an e-way bill formIt contains Part-A, where the details of the goods are furnished, and Part-B contains vehicle number.
Can the e-way bill be generated for consignments of value less than Rs.50,000? Yes, either a registered person or a transporter can generate an e-way bill although it maynot be mandatory.
What happens if multiple consignments are transported in one vehicle? The transporter should generate a consolidated e-way bill in the Form GST EWB-02 and separately indicate the serial number of e-way bills for each of the consignment. 
On generation of e-way bill, will there be any reference number generated? Upon generation of the e-way bill, on the common portal, a unique e-way bill number called ‘EBN’ will be made available to the supplier, the recipient and the transporter.
What happens if goods are transferred from one vehicle to another vehicle in the course of transit? Before transferring the goods to another vehicle and making any further movement of such goods, the transporter needs to update the details of conveyance in the e-way bill on the common portal in FORM GST EWB-01Note: If goods are transported for a distance of less than ten kilometres within the State or Union territory from the place of business of the transporter finally to the place of business of the consignee, updating the details of conveyance in the e-way bill is not mandatory.
What happens if the consignor does not generate the e-way bill even though the value of consignment is more than Rs.50,000? The transporter then needs to generate the e-way bill in Form GST EWB 01 on the basis of the invoice, bill of supply or the delivery challan. However, even if that does not happen, and the consignor transports any taxable goods without generating the e-way bill, he shall be liable to a penalty of Rs.10,000/- or tax sought to be evaded (wherever applicable) whichever is greater.
What happens if e-way bill is generated but goods are not transported? The e-way bill can be cancelled electronically on the common portal within 24 hours of its generation. The e-way bill cannot be cancelled if it has been verified by an officer during transit.
Will the e-way bill be made available for acceptance to the recipient of goods? Yes, the details of the e-way will be made available for the recipient of goods only if he is registered.  The recipient of goods should communicate acceptance or rejection of the consignment covered by the e-way bill within 72 hours of the details being made available.
What happens if recipient of goods does not communicate the acceptance of rejection within 72 hours? If the recipient of goods doesn’t communicate acceptance or rejection within 72 hours, it will be deemed as accepted by the recipient.
Is there a facility to generate or cancel the e-Way through SMS? The facility of generation and cancellation of e-Way bills will be made available through SMS.

Let us understand the process involved in the generation of e-way bills with an example.

Rana Traders, a registered dealer located in Maharashtra, agreed to make an outward supply of goods worth Rs.75,000 to Shiva Traders, a registered dealer in Karnataka. To deliver the goods to Shiva Traders, Rana Traders handed over the goods to Speed Transports.

Generation of e way bill

Validity of e-Way Bill

Distance Validity Period
Less than 100 km 1 Day
Every 100 km or part thereof there after One additional day

The validity period will be counted from the time of generation of the e-way bill. The validity period of the e-way bill may be extended by the commissioner for certain categories of goods, as specified in the notification issued in this regard.

Documents, inspection and verification

The transporter or the person in charge of a conveyance should carry the following documents:

  • The invoice or bill of supply or delivery challan, and
  • A physical copy of the e-way bill or the e-way bill number.

At the place of verification, the officer may intercept any vehicle to verify the e-way bill or the e-way bill number in physical form for all interstate and intrastate movement of goods

To avoid verification of the physical copy of the e-way bill, a device Radio Frequency Identification Device (RFID) can be fixed to the vehicle and the e-way bill is mapped to the device. At the place of verification, the e-way bill mapped to this device will be verified through RFID readers. For certain class of transporters, fixing of RFID devices to the vehicle and mapping of e-way bill to device will be mandated. This will be notified by commissioner.

On the ground of suspicion of tax evasion, a physical verification of the vehicle can be carried out by an officer after obtaining necessary approval from the commissioner or an officer authorized on his behalf. If the physical verification of vehicle is done at one place –within the state or in any other state, no further physical verification will be carried out again during the transit, unless specific information of tax evasion is made available subsequently.

After every inspection, the officer needs to record the details of the inspection of goods in Part- A of Form GST EWB-03 within 24 hrs of inspection and the final report must be recorded in Part B of Form GST EWB 03 within 3 days of inspection. If the vehicle is detained for more than 30 minutes, the transporter has an option to complain by uploading the details in Form GST EWB 04.

With GST, all the existing state-wise documentation required for movement of goods will be eliminated and the e-way bill will be made common across the nation. Also, the removal of number to check-posts across state borders and national highways will result in ease of movement of goods.

Credits: Tally Solutions

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