What is the GST Bill and How Does it Work?
With the GST rollout, several things have changed in the way manufacturers now deliver goods and services to their customers. The Waybill from the VAT regime has made way for the GST E-Way bill that is mandated where the value of the shipment is more than a certain amount.
What is the GST E-Way bill?
The Electronic Waybill is a document that the person in charge of moving goods or any consignment that values more than INR 50000 must carry. This unique bill or document is created online for a specific shipment or delivery within the state or outside the state. Carrying the E-way bill is mandatory under the terms and conditions of Section 68 of the Goods and Services Tax (GST) Act. This e-Way bill rule was applicable from the 1st April 2018. However, implementation would be done in phases where states would be segregated into 4 different lots for execution of this bill.
An E-Way bill can be created using the GST Portal for e-Way bill system i.e. waybill.nic.in. However, this is possible only if the transporter or you are registered users on the government website. You can also generate or cancel the E-way bill through SMS, using the Android App and or through the site-to-site integration using an API. When the E-way bill is created, a unique EBN – E-way Bill Number is assigned and made available to the transporter, supplier, and the recipient.
There’s a lot involved in its creation and the rules that must be adhered to. So, let’s look at what a GST E-way bill entails and how it works.
When is an E-way bill issued?
Now that you understand what an E-way bill is, here are the instances when you need one generated. When a single invoice or total invoice value of a shipment delivered in a vehicle or delivered using a transporter exceeds Rs. 50000 an E-Way bill will be generated. It is created in relation to supply or when the consignment is a return or there is an inward from an individual not registered with the business.
Supply can be one of the following:
When supply is done in the course of business for payment
When supply is done for payment but not in the course of your business
A supply without payment typically means
a) Sale of good and services where payment is made in advance
b) Transfer of goods from one branch to another
c) A barter transaction where your payment is goods or services instead of cash.
So, it is prudent that you generate the GST E-way bills on the common website for all kinds of supply. In a few cases, certain goods require an E-way even if the value of the delivery consignment is less than Rs. 50,000. Goods that need an E-way bill are
• When the Principal initiates an Inter-State movement of goods to the registered Job-worker or the Job-worker initiates one to the Principal
• When a dealer exempted from GST registration initiates an Inter-State Transport of Handicraft goods.
3. Who should Generate an E-way Bill?
• Registered Users – An E-way bill is a must when the value of goods shipped from or to a registered user is more than Rs 50,000 in value. However, a registered user or the transporter can choose to create and take the E-way bill along even is the value of goods and services is less than 50,000.
• Unregistered User – An unregistered user can generate an E-way Bill. But if the supply of goods is made to a registered user then the recipient must make sure all the rules are followed as if he or she is the supplier.
• Transporter/Logistics – Transporters that carry goods either using rail, air or road must create a GST E-way bill if the supplier has not created one before sending out the consignment.
When is an E-Way bill is Not Needed?
You do not need an E-way bill if
• The goods are transported via non-motor vehicle
• The goods are moved from the airport, customs port, the air consignment complex or the land customs station to the container freight station or the inland container depot for customs clearance.
• The Customs supervises the movement of goods or the customs-approved movement of goods
• The goods are moved under the Customs Bond from the Inland Container Depot to the customs port or from one station to another.
• Transfer of cargo shipped from or to Nepal and Bhutan
• Transportation of good is done for the defence department where the Ministry of defence is either the consignee or the consignor
• Empty Freight vessels are being moved
• The consignor's place of business and the weighbridge to weigh the goods being transported is within 20 km and the consignor has sent out a delivery challan with the goods.
• The Central, State or Local government is the consignor of goods being moved using the railways.
• The goods being transported are stated as exempt from E-way bill compliances in their State or Union territory GST Rules respectively.
• The goods moved are certain specified goods – like the supply of goods that are exempt according to the annexure to Rule 138(14), where the supply of goods is considered as no supply according to Schedule III, or the goods are part of the Central tax rate notifications.
*Remember: You do not need to fill up the Section B of E-way bill if the distance between your consignee, the transporter and your place of business is less than 50 Kms and the goods are being moved within the state.
Documents needed to create the E-way Bill: You would require the invoice or bill of supply that is related to the goods consignment. If the goods supply is through road then the vehicle number or the transporter ID. However, if the transport is through rail, ship or air then you need the transporter ID, transport document date and the document number i.e. the railway receipt number or the airway bill number or bill of lading number.
Understanding the GST E-way bill is the first step towards creating one for yourself. Do remember the rules state that the validity of the E-way bill is based on the distance you enter while creating the bill. Every 100 km would mean a one-day validity. So, if your destination is around 200 km, you must make sure the bill has a validity of 2 days. A bill once created cannot be modified or edited, so make sure you have the right details before you decide to create one.