Movement of goods in India, especially from one state to another has been a problem since years. The reason? Waybill compliance that’s riddled with all kinds of complexities. However, the Goods and Services Tax is expected to mark a significant improvement with the e-way bills.
Movement of Goods Now
Let’s first understand what happens when goods are transported from one place to another within the same state and when to a different state.
Under the current regime, the state government is responsible for imposing taxes on the intrastate transportation of the goods and the central government is responsible for imposing taxes on interstate transportation of the goods.
To prevent tax evasion and compliant transportation of goods, most states have established multiple check-posts on the national highways and borders. When a transporter arrives at a check-post, they have to furnish certain documents such as waybill, invoices, challan, etc. to receive clearance.
Some states have made compliance easier for the suppliers through digitised procedures. For instance, in Karnataka, e-Sugam is an electronic system that allows the registered dealers to upload the details of the shipments and receive unique IDs in return. The transporters can use these IDs at the check posts for verification and clearance.
Movement of Goods Under GST: Enter e-way Bill
Once GST is implemented, the current waybill will be replaced by the e-way bills which is an electronic waybill. Taxpayers moving goods worth more than Rs. 50,000 are required to generate e-way bills under the GST regime.
The following are some of the key aspects of the e-way bill:
- An e-way bills must be generated when there is a movement of goods of value above Rs. 50,000 by a registered person. However, they or the transporter can carry an e-way bills even if the value of the goods is less than Rs. 50,000.
- The following are some of the ways an e-way bills can be generated:
- A registered person can generate an e-way bills by filling part A of Form GSTINS-1.
- A recipient of the goods can generate an e-way bills by filling part B of Form GSTINS-1.
- A registered person who is also a consignor or consignee and goods are handed over to a transporter can generate an e-way bills by filling both part A and part B of Form GSTINS-1.
- A transporter can generate an e-way bills by filling form GSTINS-1 himself, in case the consignor hasn’t.
- Each e-way bills will have a certain validity will be based on the distance travelled by the goods. The following can be referred for the relation between the distance and validity:
- Less than 100 km: 1 day
- 100km to 300km: 3 days
- 300km to 500km: 5 days
- 500km to 1000km: 10 days
- 1000km or more: 15 days
- While e-way bills are to be generated and cancellated through GSN Network portal, registered taxpayers can also do that through SMS.
An Example of e-way Bills Under GST
- Trader A hands over goods to transporter T to deliver them to another Trader
- Trader A enters the details of the stock and the transporter in Part A and Part B of Form GST INS 01 respectively.
- Transporter T generates an e-way bill using the details from Part A of Form GST INS 01.
- As the e-way bill is generated, a unique e-way bill number (EBN) is shared with A, T, and B.
- B can now accept or reject the goods mentioned in the e-way bill. If no response is given in 72 hours, the consignment is considered accepted.
E-way bill is designed to make compliance of transportation of goods easier and to prevent tax evasion. So, for a smoother transition to GST, it is best that you get around the e-way bill system as soon as possible.