This article is written by Fatema Hussain, a student at O.P Jindal Global University.

Introduction 

Before the commencement of GST, Central Excise had no concept of E-Way Bill in it whereas several VAT laws had mandated the requirement of a manual way bill as an additional transport document for the transportation of goods. In GST, Rules 138 and 138A to 138D laid down the concept of EWB. This implementation of EWB was earlier done away with as the required infrastructure for its effective implementation was unavailable nationwide. However, later, the GST Council for inter-state transport decided to implement the e-way bill scheme from the 1st of February, 2018.

Due to technical glitches, it could not be implemented. The provisions of the scheme were later amended and were to be made effective from 1st April, 2018 for inter-state transport and for intrastate transport it had to be started in a phased manner from 15th April, 2018. To implement this phased rollout, states were divided into four groups. EWB was required whenever there was an inter-state movement of goods.

According to Section 68 of the Central Goods and Services Tax Act(CGST) read along with Rule 138 of the CGST Rules 2017, electronic way bill(EWB) is “ a document which is required to be carried by the custodian of the goods whose value is above Rs. 50,000, while the goods are in transit. It can be produced from the portal (see here) before the movement of the goods is commenced with which can be both inter-state or intra state.”

This bill comprises of two parts:

1. Part A – This must list the name of the supplier, the name of the recipient, place of delivery, HSN Code, invoice and date, transport document number, value of the goods and reasons for transportation.
2. Part B – This must list the transport details like the vehicle number, transport ID etc. 

Overview of the Requirements of E-Way Bills 

E-Way Bill was compulsorily required to be generated for movement of goods inter-state and intra-state(only where it had been notified).

Persons who are required for the generation of E-Way Bill are – Registered Consignor, Registered Consignee or the transporter of the goods (This transporter if unregistered must enroll on the portal and generate the e-way bill).

The initial responsibility of causing the movement of goods lies with the registered person (consignor or consignee). If they don’t generate it the responsibility shifts to the transporter only on assignment from the registered person. In cases where goods are supplied through e-commerce operators or courier agencies, they will be responsible for furnishing the information in Part A of EWB-01. 

Usually, the consignor is the one that generates the e-way bill by filling Part A of the EWB-01 form as per Rule 138(1) of the CGST Rules. However, if the consignor is not registered but the recipient is registered, then the responsibility to generate the e-way bill shifts to the recipient of the goods if the recipient is known at the time of commencement of goods and thus is deemed to be the supplier for this purpose.

In cases where both the consignor and the consignee are unregistered then it is not expedient to generate EWB-01 and if they still want to generate, they can do so on the portal by selecting the option for enrolment of a citizen.

For being able to produce an E-Way bill, the consignor (supplier) must provide the following documents- Invoice or delivery challan, vehicle number, transporter ID (if transportation of goods is done by road), record number and date of transportation (if goods transported by rail, air or water vessel.) In some circumstances, the Commissioner may by notification want a class of transporters, before the movement of goods, to embed a unique

Radio Frequency Identification Device (RFID) to the vehicle in order to track the E-Way Bill. 

After all, information has been duly furnished in Part A and B on the E-Way Bill portal, there will be a generation of a unique E-Way Bill Number(EBN) after which you are required to update all the above-mentioned information and get a print of it along with the EBN. Next step is to commence the movement of the goods along with the E-Way Bill.

The need, legislative intent & rationale of introducing E-way Bills 

Since the introduction of MODVAT followed by CENVAT provisions, in order to prevent the cascading effects of taxes under the Central Excise Laws authorities have been battling to look for new means and ways to plug the unauthorized procurement of these credits and illegal manufacture and elimination of dutiable goods by the procurement of raw materials that are unaccounted for.

Thus, the concept of E-Way Bill was introduced in GST law in order to plug such unauthorized transactions that have a negative effect on the nation’s economy. The sole purpose of introducing the E-Way Bill was to prevent tax evasion and to ensure that GST provisions are being complied with. The legislative intent behind its implementation was also to make the transportation of goods simple for all the suppliers and transporters through a unified nationwide system. The need to introduce this was long pending as in the previous era the Way Bill mechanism which was implemented in the VAT laws of the concerned states was a nightmare for the taxpayers.

The Way Bill was required to be obtained from the VAT authorities which was a daunting, costly and a time-consuming process needed to be done away with. In addition, the previous method where the inspectors checked on the goods being transported was intended to be removed by the provision of a modern digital interfacing program through the generation of E-Way Bill. This helped in the removal of state boundary checkpoints. This system would eventually also make the movement of goods quicker, lead to improvement of the turnaround timings of trucks and benefit the logistics industry by permitting for an increment in the average distances being travelled. These benefits would not just decrease the travel time but also the transportation cost.

Analysis of important provisions relating to E-Way Bill 

General Rule: Rule 138(1) of CGST Rules – (Threshold limit of Rs.50,000)

This rule states that an E-way Bill will be required to be generated in cases of movement of goods where its consignment value is above Rs.50,000 when there is a supply of goods as explained under Section 7 of the CGST Act, 2017 or in cases other than supply that is Stock transfer within a state, return of sales or a good sent for demonstration purpose. This rule also states that an e-way bill must be generated in cases where there is an inward between an unregistered person and a registered person of consignment value above Rs. 50,000. 

• This threshold of Rs. 50,000 is problematic and should be increased. This is due to the fact that even ordinary people can spend up to this amount. The lesser the threshold the more transactions it will take into its ambit which necessarily is not a good thing as then several e-way bills will have to be generated. With more generation of e-way bills per day it becomes difficult for the portal to handle the volumes of transactions due to the current limited infrastructure. This can lead to several technical glitches as well as the site crashing down which was the main reason why the e-way bill which was introduced much earlier had to be delayed in its implementation. Generally, tax evasion takes place in a scenario where the consignment value is very high as the tax saved on it is also a huge profit for the evader. Since the main aim of e-way bill was to be able to track movement of goods and prevent tax evasion, it must be made a mandatory requirement for a consignment value with a threshold higher to this. This will make the entire process more fruitful, less time consuming for all suppliers, transporters, recipients and the government officials.

Further, the first sub-rule to this provision places the initial liability on the registered person who causes the movement of goods to give information in Part A and this information must be given before the commencement of movement of goods takes place.

It is important to note that the generation of E-Way bill takes place through form EWB-01. The form comprises of two parts, Part A that contains information about the goods in movement and Part B which contains details about the transporter or the Vehicle.

This sub-rule even though just talks about the furnishing of information in Part A , it must be kept in mind that only after the filing of both Part A and Part B is completed is when E-Way bill will be generated. The filing of Part B is not important if goods are being transported from the supplier to the recipient within a distance of 10kms through hand or rickshaw.

After you feed in the information, a unique number is generated. This number helps in identifying and tracking the E-Way bill against the vehicle number that is used for the transportation of the goods of value above Rs.50,000. The bill after it is generated cannot be edited and only in cases when the vehicle number is uncertain can it be entered later. 

Rule 138(3) states that when a registered person(consignor or consignee) does not generate the e-way bill and meanwhile goods are given to the transporter, then the registered person is responsible for furnishing the information to the transporter who must generate the EWB in GST EWB-01.

• The responsibility of generating e-way bills being shifted onto the transporter can be dangerous in a country like India where most of the transporters have an uneducated background. For them to be able to generate e-way bill can be next to impossible as first their access to internet is limited to be able to go log on to the portal and generate the e-way bill by themselves and even if they have the means to do so they may not be able to adhere to each step as furnishing of information on the site is not a very simple task for a person who is not educated enough and might not know what data to feed in where. Thus, the main aim of making the entire procedure of compliance easier will lose all merit as for such transporters this new process will be difficult to comply with. Thus, the e-way bill should mandatorily be generated by either the consignor or the consignee and not shift the liability to the transporter as it can lead to severe complications for these less informed transporters. 

The proviso to this however states that if the consignment value is less than Rs.50,000, or the person is unregistered then it is optional for the registered/unregistered person or transporter to carry the E-way bill.

The deemed provision in the explanation states how when movement of goods between the registered and unregistered person is caused it will be deemed that the communication is caused by the registered person.

• This explanation has been given because ultimately it is the prerogative of the registered person to generate the E-Way bill be it the supplier or the recipient. This is done so that it is made possible for the government to catch hold of the person and implicate him in case the e-way bill rules are not followed in such transactions.

Rule 138(5) talks about the fact that if goods are transferred from one vehicle to the other then before the onward movement is continued with Part B dealing with the vehicle information, must be updated with the new vehicle number. However, it is important to note that this can be done only once.

• Thus, we can see how through this at every step of the process of movement of goods, the goods are being tracked so that the government can keep an eye on its movement to avoid any form of tax evasion which was prevalent in the earlier regime. However, due to these compliances of updating Part B before the onward journey can increase the travelling time which was meant to be curtailed in the very first place. Also the fact that this can be done only once and due to unfortunate circumstances like the vehicle breaking down again it cannot be updated which can cause compliance problems then. 

Rule 138(6) talks about consolidation of e-way bills. When e-way bills have been generated in accordance with Rule 138(1) and there are multiple consignments in a single conveyance then the transporter has an option to avail these e-way bills in one consolidated form of GST EWB-02.

• This is done to make the process simpler. Instead of carrying 100 EWB’s you can put it together in a single document by mentioning a serial number against each consignment. Thus, merely a procedural option given to the transporter to make conveyance easier. However, again this procedure can still be complicated for a not so educated transporter to follow.

Rule 138(7) states that when consigner and consignee have not generated the EWB, the aggregate consignment value is above Rs.50,000 and the supply is being effectuated inter-state, in such cases a transporter has to generate the e way bill. However this won’t be applicable to rail, vessel or air as there is a specific exclusion mentioned for the same in the provision.

The proviso to this rule states that if the transportation is being effectuated by an E-commerce operator or a courier agency, then he must furnish Part A of EWB 01.

• The transporter, ECO or the courier agency being entrusted with the responsibility of generating the e-way bill and furnishing the information in Part A is problematic due to the same reason as has been mentioned above of them being not competent enough to do so and thus should be avoided as much as possible. 

Rule 138(8) states that the information that has been provided in Part A can be used by the registered supplier to fill in the details in his Return, GSTR 1 and this is auto populated.

• They are trying to link every document to the return through these procedures thus ensuring that there is no case of discrepancy, also ensuring strict compliance and making the process easier. 

Rule 138(9) – It talks about cancellation of e-way bill after it has been generated and further goes on to state that in cases where the goods are not transported or not transported according to the details provided in the e-way bill, it can be cancelled electronically within 24 hours from its generation.

The proviso to this states that this bill cannot be cancelled where any verification of these goods has been done by any officer while in transit. 

Rule 138(10) – After Part A and B  have been furnished and the complete E-way bill has been generated, the validity of this e-way bill is described in this rule. Any e-way bill’s validity primarily depends on the distance for which the goods are carried within the country. This threshold has been given in the table as follows :

In cases where the goods cannot be transported in accordance with the validity period, the transporter has the option of generating another EWB after the updation of details has been done in Part B of GST EWB 01.

Over dimensional cargo is explained in Explanation 2 which says that it must carry a single indivisible unit and should surpass the dimensional limits mentioned in Rule 93 of the Motor Vehicles Act.

• In order to decrease the traffic on the portal and the inconvenience of the taxpayers and government authorities, the period of validity of the EWB is acceptable keeping in mind the fact that 100 kilometres can be easily covered in a day and for every additional 100 kms or some part one more day is extended.

Rule 138(11) and 138(12) states that after details of EWB have been furnished and it has been generated by the recipient or the transporter then registered supplier must accept this EWB and the other way round. This acceptance or rejection must be conveyed within 72 hours after which it will be deemed to have been accepted.

Rule 138(14) gives a list of certain categories of good where you don’t need to generate an EWB. For example- exempted goods, exhaustive list of 154 goods mentioned in the annexure of the rules, goods transported by non-motorised conveyances etc. This is a specific exclusion to the threshold of Rs.50,000.

Rule 138B states that a commissioner or the officer have the powers to stop the vehicle and verify the EWB in physical form or through RFID readers.

• Through this we can see how some discretionary power is still given to the officers to carry out a physical verification of the goods which can reduce the risk of tax evasion per se.

Rule 138C(1) and 138C(2) states that the officer for the abovementioned purpose must within 24 hours from verification submit a summary report and furnish the same in Part A in the form GST EWB 03 and the final report must be completed in 3 days. However, this can be extended for up to 3 days more if sufficient cause is shown by the officer in writing. It further goes on to say that if the vehicle has been verified once it cannot be done again until you have information on tax evasion taking place with respect to the transportation.

• This helps to place a limit on the powers of the officer so that no harassment of the public or no cases of bribes occur during the movement of goods.

Rule 138D states that if the conveyance has been stopped for a period of more than 30 minutes the transporter has a right to upload the information regarding this in Form EWB 04.

• Thus, the proper officer do not have indiscriminate power to keep your vehicle waiting for a longer period. Must finish all formalities within 30 minutes. This is a good rule as compared to the erstwhile rules as there used to be huge lines at octroi checks because the officers kept vehicles waiting for days and in order to avoid this the implementation of this rule seems plausible. 

Section 122(xiv) and 129 of the CGST Act, 2017 provides for the penal provisions applicable on GST paid goods, if these goods are being transported by the supplier, recipient and the transporter and none have generated an EWB for the same. The punishments are a penalty of Rs.10,000 or the tax evaded whichever is more and seizure of the goods to recover tax respectively.

Threshold limits 

State – Wise specific requirements

Since different states have the authority to make laws regarding their implementation of the E-way Bill system, some states through issuance of notifications have increased the threshold of Rs.50,000 for intra state movement of the goods. For example – Bihar and Delhi has increased the threshold to Rs.1,00,000. Recently Assam passed guidelines for “mobile squads” that will conduct random checks on conveyances.

• This power given to the states to make their own laws regarding E-way Bills is problematic as then the uniformity which the system intended to bring in would be lost in the process. Non-uniform laws throughout the country can also lead to a lot of confusion and complication for the general public. Even though the threshold limit of 1,00,000 is more plausible than Rs.50,000, this should be made applicable nationwide. Also, if other state governments follow suit after the law passed by the Assam government it will hamper the entire purpose of the Act as it is completely against its rationale to do so.

E-way Bills as a medium to realize the objective of ‘ONE NATION-ONE MARKET-ONE TAX.’ (Along with suggestions and comments)

Overall, keeping in mind all its pros and cons it is safe to say that this system of EWB is a lot better than the erstwhile system of way bills under VAT in different states. The earlier system was a core contribution to the tail jams at all check posts nationwide. This has been largely overcome through the new digitalised system. “One nation one market one tax” has been achieved largely due to the uniform laws nationwide when it comes to interstate transactions due to EWB. It has removed the earlier taxes that were imposed by different states at different rates with respect to inter-state transactions. 

However, my comment regarding this is that uniform laws must be passed by all State governments as well. This is not being done as different states pass their own EWB rules as has been discussed above when it comes to intra state transactions of transportation of goods which is again a step back from the uniformity that the GST system seeks to provide nationwide and also making compliance complicated for the general public. 

As a suggestion, the GST Council should recommend the states to execute consistent EWB Rules. All intra-state transactions relating to transportation of goods should also be brought at par so that there is no non-uniformity in the system regarding the same. The government should also increase the threshold of Rs.50,000 to generate EWB as it is a very small amount and will unnecessarily increase the burden on the portal as several transactions will then be processed.

This can further lead to the site crashing down in future. Also, the infrastructure of this system should be improved in the coming times so as to be able to handle the traffic considering the population of our country. For the time being in areas where net service is poor, government officials should set up special camps to help out with the system.

Relaxations offered with respect to E-way Bills during the COVID-19 Pandemic

During March 2020 when India was in a state of complete lockdown severely affected with the implications of the COVID-19 pandemic the government bought temporary changes to several laws for a limited time period by the way of issuing notifications. Similarly, on 3rd of April 2020, the legislature with respect to e-way bills issued a notification increasing the time limit for all e-way bills that were generated previously and their legitimacy was to terminate between the period 20th March 2020 and 15th April 2020 will be deemed to have been terminated after 30th April 2020. Hence, a grant of 15 days more was provided for ease of the users of E-Way Bill.

Further, the CBIC deferred the application of a 10 per cent restriction to avail input tax credit for the period of February till August 2020 and rolled over the cumulative applicability towards the month of September, 2020. This seven-month window provided by the government eased out cash flow as it facilitated the working capital and income of the industry.

Conclusion

E-Way Bill system has come a long way as with the new amendments on April 1st, 2019 of auto-populating the route distance based on the pin codes of the supplier and the recipient and the facility to extend EWB while goods are in transit, have made the system more user-friendly than before. Also, the core aim of implementing this mechanism was to offer an integrated facility nationwide that would ease the transportation transactions between suppliers and recipients which was achieved to a great extent.

Irrespective of the several cons that the system still needs to work on, it has helped the administrative authorities in a huge way to keep eye on the value of goods being transported nationwide especially interstate and has helped prevent several tax evasions that were prevalent earlier.

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