Courier companies such as FedEx, DHL and UPS are in a bind over delivering imported goods to customers because of a goods and services tax rule that bars defaulters from issuing e-waybills. The document is mandatory for transport of goods worth over Rs 50,000.
On the other hand, the customs department won’t hold such goods in its storage once they’re cleared. The companies, including local ones such as DTDC, Safe Express, Gati and Delhivery, have petitioned the government to seek a way out of the dilemma. The government said it’s examining the issue.
GST Rule 138E, which took effect in November, doesn’t allow an entity that hasn’t filed returns for two straight months to generate an e-waybill.
While the rule won’t impact direct deliveries to ecommerce customers, business-to-business (B2B) orders from overseas will likely get hit.
Import consignments of companies, which may have missed filing returns and are unable to generate an e-waybill, cannot be delivered. But the goods cannot be kept inside the customs premises once cleared.
“As per customs regulations, goods may not be retained in the customs premises post clearance,” Vijay Kumar, chief executive officer of the Express Industry Council of India lobby group. “But moving the goods outside the customs premises without e-waybill would result in noncompliance from a GST standpoint.”
Courier companies have no means of checking whether their customers are GST compliant. “The task itself would be monumental given the volume of transactions and number of clients,” Kumar said. “Tracking such compliances would lead to operational challenges… delay in delivery of goods and reduction in operational efficiency.”
Since courier companies get the goods cleared from customs on behalf of those that place the orders, under the end-to-end logistics model, they face the brunt of the rule, experts said.
“While GST was intended to simplify supply chains, logistics businesses have been facing a few challenges such as EWBs on import consignments, which need to be discussed, as this is a key ingredient in improving the ease of doing business,” said MS Mani, partner.
The government is examining the matter to see how it can be resolved, said a senior government official, adding, “States have some reservations on the issue.”
The official said one option would be for courier companies to seek a written undertaking from customers to the effect that they’re GST compliant. The issue will be taken up again with states, he said.
E-invoicing refers to a method in which the entire B2B invoices that are generated by the accounting software, are electronically authenticated by GSTN (Goods and Service Tax Network) for any further use such as generating E-way bills, preparing returns, and the like. In fact, E-invoice does not involve generating or creating invoices from the common portal or the tax department; rather, it includes the submission of invoices already generated from the respective accounting software at the central GST portal.
However, the GST system fails to recognize the invoice formats generated by the different accounting/ billing software. In this scenario, there arises the need for a standard invoice format (schema) which could be easily uploaded on the GST portal. This standard schema needs to be followed by the entire accounting/ billing software in order to generate the JSON of every invoice in that format so as to make the uploading process on the GST portal easy. The E-invoice schema provided by the GST system has mandatory as well as non-mandatory fields which could be used by all types of businesses.
The E-invoice mechanism is likely to be rolled out in different phases starting from January 1st 2020, upon a voluntary basis. In the beginning, it will be applicable only for those taxpayers who are above a particular turnover or an invoice value, and also for volunteers. Later on, it will be implemented for the entire taxpayers in a step-by-step manner.
What do you mean by E-invoicing?
If an invoice is generated by a software on the computer or Point of Sales (PoS) machine then does it become an e-invoice? Is e-invoice as a system where taxpayers can generate the invoices centrally? Many such questions are raised when e-invoice gets discussed.
E-invoice does not mean generation of invoices from a central portal of tax department, as any such centralization will bring unnecessary restriction on the way trade is conducted. In fact, taxpayers have different requirements and expectation, which can’t be met from one software generating e-invoices from a portal for the whole country. Invoice generated by each software may look more or less same, however, they can’t be understood by another computer system even though business users understand them fully. For example, an Invoice generated by SAP system cannot be read by a machine which is using ‘Tally’ system. Likewise there are hundreds of accounting/billing software which generate invoices but they all use their own formats to store information electronically and data on such invoices can’t be understood by the GST System if reported in their respective formats. Hence a need was felt to standardize the format in which electronic data of an Invoice will be shared with others to ensure there is interoperability of the data. The adoption of standards will in no way impact the way user would see the physical (printed) invoice or electronic (ex pdf version) invoice. All these software would adopt the new e-Invoice standard wherein they would re-align their data access and retrieval in the standard format. However, users of the software would not find any change since they would continue to see the physical or electronic (PDF/Excel) output of the invoices in the same manner as it existed before incorporation of e-Invoice standard in the software. Thus the taxpayer would continue to use his accounting system/ERP or excel based tools or any such tool for creating the electronic invoice as s/he is using today.
To help small taxpayers adopt e-invoice system, GSTN has empaneled eight accounting & billing software which provide basic accounting and billing system free of cost to small taxpayers. Those small taxpayers who do not have accounting software today, can use one of the empaneled software products, which come in both flavors, online (cloud based) as well as offline (installed on the computer system of the user).
E-Invoicing Under GST
The GST Council has approved introduction of ‘E-invoicing’ or ‘electronic invoicing’ in a phased manner for reporting of business to business (B2B) invoices to GST System, starting from 1st January 2020 on voluntary basis. Since there was no standard for e-invoice existing in the country, standard for the same has been finalized after consultation with trade/industry bodies as well as ICAI after keeping the draft in public place. Having a standard is a must to ensure complete inter-operability of e-invoices across the entire GST eco-system so that e-invoices generated by one software can be read by any other software, thereby eliminating the need of fresh data entry – which is a norm and standard expectation today. The machine readability and uniform interpretation is the key objective. This is also important for reporting the details to GST System as part of Return. Apart from the GST System, adoption of a standard will also ensure that an e-invoice shared by a seller with his buyer or bank or agent or any other player in the whole business eco-system can be read by machines and obviate and hence eliminate data entry errors.
The GST Council approved the standard of e-invoice in its 37th meeting held on 20th Sept 2019 and the same along with schema has been published on GST portal. Standards are generally abstruse and thus an explanation document is required to present the same in common man’s language. Also, there are lot of myth or misconception about e-Invoice. The present document is an attempt to explain the concept of e-invoice, how it operates and basics of standards. It also contains FAQs which answer the questions raised by people who responded to the draft e-invoice standard used for public consultation. It is expected that the document will also be useful for the taxpayers, tax consultants and the software companies to adopt the designed standard.
Today, the term ‘E-way bill’ is used extensively. It refers to an electronically-generated document which is needed for the movement of goods whose value is more than Rs.50,000, from one place to another all over India, except Delhi. In the case of movement of goods within Delhi, an E-way bill needs to be created for goods whose value is more than Rs.1 Lakh. Further, this document needs to be generated online for moving goods, regardless of whether such transportation happens intra-state or inter-state. In fact, the E-way bill generated in any state is valid in every state as well as the Union Territory of India.
How long is an E-way Bill Valid?
An E-way bill is valid for a certain period as given below from the relevant date:-
Distance Covered
Period of Validity
Distance which is less than 100 km
1 Day
For each 100 km or part thereof
1 Added Day
Here the relevant date for calculating the validity of the E-way bill will be the date on which it has been generated. Further, the validity period starts from the time at which the E-way bill has been generated, and every day till the period of expiry shall be counted, which would end on the midnight of the next day of generation of E-way bill.
In exceptional cases where the goods could not be moved within the designated validity period stated in the E-way bill, the transporter needs to generate another E-way bill after updating the information in Part B of Form GST EWB 01. Further, in the case of certain goods, the commissioner may prolong the validity period of the E-way bill.
What is the Date of the Applicabilityof E-way Bill?
The applicability of E-way bill under the GST system is from 1st April 2018 for the transportation of goods from one state to another. Further, the E-way bill has been implemented in different stages during the period starting from 15th April 2018 to 16th June 2018. The stage-by-stage roll-out has been completed now and currently, the E-way bill is applicable in all of the states. With the introduction of E-way bill under the GST system, the way bill, a physical document which has been mandatory under the VAT regime for the purpose of transporting goods, is been replaced by the former.
Who All Are Required to Generate an E-way Bill?
The E-way bill under the GST system needs to be generated by
Each registered individual who is responsible for the transportation of goods
In connection with a supply (for example, sales); or
For some other reasons than supply (for example, branch transfer, sales return, etc.); or
Owing to inward supply received from an unregistered individual
Each unregistered person who is responsible for the transportation of goods.
Generation of E-way Bill by a Registered Person
If the transportation of goods is done by a registered person as a consignor (that is, seller) or the recipient of supply is carried out as a consignee (that is, buyer) in his own vehicle, or a hired one, or by vessel, or by railroad, or by air, the registered person or the recipient would be able to generate the E-way bill in Form GST EWB 01 on the common portal, after filling in the necessary details in Part B of the Form GST EWB 01.
Suppose if a registered person sends the goods to the transporter for moving those by road, and if the E-way bill for the same has not been generated, the responsibility of generating the E-way bill would be on the transporter. The registered individual should provide the information concerning the transporter first in Part B of the Form GST EWB 01 on the portal, following which the E-way bill would be generated by the transporter as per the information provided by the registered individual in Part A of the Form GST EWB 01.
Generation of E-way Bill by an Unregistered Person
If the goods are moved by a person who is unregistered under the GST regime in his own conveyance, or by means of a hired one, or via a transporter, the E-way bill would have to be generated by the transporter or by the unregistered person himself in Form GST EWB 01 on the government portal. Further, if the goods are delivered by an unregistered person to a registered person, and the latter is aware of the time of the transportation of goods, the responsibility regarding the movement of goods falls on the registered person. In such circumstances, either the transporter or the registered person would have to complete the formalities regarding the generation of the E-way bill.
What are the Responsibilities of a Transporter?
If the consignor (seller) or the consignee (buyer) has not generated the E-way bill and the total value of the consignment is greater than Rs.50,000, the transporter would have to generate Form GST EWB 01 as per the invoice, or delivery challan, or bill of supply
A transporter who shifts goods from one conveyance to another during a transit is required to modify the details of the conveyance in the E-way bill on the government portal before such transfer is made and also before he proceeds further with the movement of goods
If there are several consignments to be transported in a conveyance, the transporter should provide the serial number of each E-way bill generated individually with regard to every consignment on the common portal, and a consolidated E-way bill should be generated in the Form GST EWB 02 on the GST portal before moving the goods.
The SituationsWhere E-way Bills are not required
It is not needed to generate E-way bills in the below-mentioned circumstances:
The goods are moved to a distance less than 10 km within a certain state, from the business location of the consignor to that of the transporter for moving it further
The goods are moved to a distance less than 10 km within a particular state, from the business location of the transporter to that of the consignee
The goods are conveyed from the airport, port, land customs station, and air cargo complex to a domestic container yard or a freight station for the purpose of clearance by the Customs department
The goods are conveyed by a non-motorized conveyance
The transportation of goods within those areas mentioned under clause (d) of sub-rule (14) of rule 138 of the GST Rules governing the concerned state
For some goods like jewelry, personal and household stuff, etc.
Note: For transporting goods to a distance greater than 10 km but lesser than 50 km, the generation of E-way bill is compulsory. However, it is not required to provide the transportation details in the concerned E-way bill.
The Documents Which Are to be carried by those in Charge of Transportation
The person in charge of transportation need to carry:
The invoice, or delivery challan, or bill of supply, and
A copy of the E-way bill or the E-way bill number, either physically or connected to a Radio Frequency Identification Device which is implanted on to the conveyance in a manner which is notified by the commissioner.
To sum it up, here the rules and regulations concerning the E-way bills are discussed in detail to provide an insight into the entire procedure.
E-way bill is an online document generated by the govt portal www.ewaybillgst.gov.in evidencing movement of goods of consignment value more than Rs 50,000.
The finance ministry of india has sought a report from GSTN (GST Network), the IT-backbone provider for GST, on glitches in the system that derailed the anti-tax evasion e-way bill system. Eway bill is aimed to bring uniformity across the states for seamless inter-state movement of goods.
Here are the key things to know about the online document:
What is an e-way bill?
Form GST EWB-01 (eway bill) is an online document (available to supplier/recipient/transporter) generated on the common govt.portal (http://www.ewaybillgst.gov.in) evidencing movement of goods of consignment value more than Rs 50,000. It has two components –
Part A comprising of details of GSTIN of supplier and recipient, place of delivery (indicating PIN code also), document (Tax invoice, Supply Bill, Delivery Challan or Bill of Entry) number and date, a value of goods, HSN code, and reasons for transportation.
Part B comprising of transport details – transport document number (Goods/Items Receipt Number or Railway Receipt Number or Airway Bill Number or Bill of Lading Number) and Transport vehicle number for the road.
Who should generate e-way bill?
The Eway bill needs to be generated by the consignor or consignee (if the transportation is being done in own/hired conveyance or by railways by air or by vessel) or the transporter (if the goods are handed over to a transporter for transportation by road). When neither the consignor nor consignee generates the e-way bill and the value of goods is more than Rs 50,000, it will be the responsibility of the transporter to generate it.
Can users update their business name, address, mobile number or email-id in the e-way bill system?
The billing system will not allow updating the above details directly. The taxpayer has to change the details at GST Common portal, from where it will be updated in the e-way bill system.
Whether information submitted to the e-way bill can be used for filing GST returns?
The information furnished in the Part-A of the Electronic way bill on the common portal can be utilized for furnishing details in GSTR-1.
What is invoice reference number?
A registered person can obtain an Invoice Reference Number from the common portal by uploading the tax invoice issued in Form GST INV-1. The tax invoice and reference number will be valid for a period of 30 days from the date of uploading.
Can the e-way bill be canceled if the goods are not transported after generation of the e-way bill?
In cases where an e-way bill has been generated, but goods are either not being transported or are not being transported as per the details furnished in the e-way bill, the Eway bill can be canceled electronically on the common portal within 24 hours of generation.
What are the modes of e-way bill generation?
Apart from the option to generate the bill from the common portal, it can also be generated or canceled through SMS. When an Eway bill is generated, a unique e-way bill number (EBN) is allocated and is available to the supplier, recipient, and the transporter.
If you have any questions about GST or Eway bill system or would like to know how you can easily transition to GST with minimum disruption to your business, please write tomarcom@sailotech.com or visit our site www.xattax.in
E-way Bill for Intra-State Supplies in Maharashtra from May 1st
The Commissioner of State Tax, Maharashtra has issued a notification amending an earlier notification which stated that on or after the 1st April 2018, no e-way bill shall be required to be generated, for the intra-State movement that commences and terminates within the State of Maharashtra, in respect of any goods of any value. As per clause 2 of the earlier notification, the notification shall be in force until further orders are issued.
The new notification has amended clause 2 and has fixed an expiry date for the Notification, i.e. 30th April 2018.
This would mean that from 1st May onwards e-way bill will become a requirement for the intra-State movement that commences and terminates within the State of Maharashtra. Already six States-Karnataka, Andhra Pradesh, Gujarat, Kerala, Telengana, Uttar Pradesh has implemented e-way bill system for intra-state movement of goods.
E-way bills will be mandatory for intra-State trade in respect of these six more states- Bihar, Jharkhand, Haryana, Madhya Pradesh, Tripura and Uttarakhand -from April 20.
After deciding to mandate the use of E-Way Bill to track the movement of goods within five states Andhra Pradesh, Gujarat, Kerala, Telangana and Uttar Pradesh from next week, the government is working to introduce other anti-evasion tools to shore up the collection of GST, where it suspects massive leakage is taking place.
On Tuesday, the finance ministry said that intra-state movement of goods in 5 Staes — which account for 61% of the inter-state e-way bill generation — will require the electronic tool from April 15 as part of the planned expansion. E-way bill had become mandatory for movement of goods valued over Rs 50,000 from one state to another at the start of the month.
Sources said in the coming days, the states are planning to step up checking of e-way bills as they suspect that they are losing a large amount of revenue.
On April 16, a committee headed by Bihar deputy CM Sushil Modi will deliberate on ways to reintroduce the reverse charge mechanism, a key anti-evasion tool that was suspended in the wake of protest from traders.
Reverse charge is to be paid by registered GST payers on behalf of small suppliers, who are exempted. The registered dealer or the buyer, who has to pay GST under reverse charge, has to undertake self-invoicing for purchases. While it keeps small businesses out of the tax ambit, SMEs complain that the cost is borne by them and this makes their businesses unviable, although officers believe that the motive behind resistance to blocking reverse charge mechanism is to evade taxes. The government will pay credit to traders against the reverse charge.
“Even under VAT, many states had the tool. But given the concerns we will look at options to ensure that businesses are not impacted and remain viable,” said a finance ministry official. One option is to increase the threshold of daily transactions to keep several small businesses out.
GST E-way bill can be generated from GST common portal for e-way bill system – ewaybillgst.gov.in.
The E-Way (electronic way) bill system under Goods and Services Tax (GST) for inter-state movement of goods came into effect on 1st April ,2018. GST E-Way bill is a document required to be carried by a person in charge of the conveyance carrying any consignment of goods of value exceeding Rs. 50,000, as mentioned by CBIC (Central Board of Indirect Taxes and Customs). E-way bill can be generated from GST portal for E-Way bill system – www.ewaybillgst.gov.in by the registered persons/Business or transporters who cause movement of goods of consignment before commencement of such movement, informed CBIC.
1. Requirement of GST E-Way bill
Section 68 of the GST Act mandates that the government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding Rs. 50,000 to carry with him such documents and such devices as may be prescribed, said CBIC in the circular. Rule 138 of CGST (Central Goods and Service Tax) Rules, 2017 prescribes E-Way bill as the document to be carried for the consignment of goods in certain prescribed cases.
According to Central Board of Indirect Taxes and Customs (CBIC), the consignor or consignee, as a registered person or a transporter of the goods can generate the E-Way bill from the common portal by using the Goods and Services Tax Identification Number (GSTIN). The unregistered transporter can enroll on the common portal and generate the E-Way bill for movement of goods for his clients. Any person can also enroll and generate the E-Way bill for movement of goods for his/her own use, said CBIC.
3. Validity period of GST E-Way bill
Validity of the E-Way bill depends upon the distance the goods that have to be transported. In case of regular vehicle or transportation modes, for every 100 km or part of its movement, one day validity has been provided. In case of over dimensional cargo vehicles, for every 20 km or part of its movement, one day validity is provided. This validity expires on the midnight of last day, informed CBIC. The validity period of the E-Way bill can be easily calculated. For example, if an E-Way bill is generated at 00:04 hrs on April 3. Then first day would end on 12:00 midnight of April 4-5. Second day will end on 12:00 midnight of April 5-6, and so on.
A lot of buzz has been generated recently around E-Way Bill as part of the GST compliance mechanism, similar to what Input Tax Credit has generated few months back with government all set to rollout this very soon. This blog provides an overview of GSTE-Way Bill and its significance without getting much into the technical and operational aspects.
What is an E-Way Bill?
An E-way Bill is an electronic way bill that needs to be generated online (via GST portal) for movement of goods either for inter-state or intra-state sales. This E-Way bill needs to be raised before the goods are shipped and should include information such as details of the goods, their consignor, consignee and transporter. As support documents, a transporter needs to carry the invoice and the copy of the Eway Bill for goods, which are being transported.
Though check posts have been abolished under the new GST regime, a consignment can be intercepted at any moment during the goods transit for verifying the E-Way Bill. In case a transporter fails to show an E-Way Bill for the consignment, a penalty of Rs. 10,000 or tax sought to be evaded, whichever is greater can be levied.
GST offers flexibility to let any of the parties of a transaction, either the consignor or the consignee to generate the E-Way Bill, provided they are registered parties. Whatever may be the mode of transport of goods – either by air, rail or road, the E-Way Bill must be mandatorily generated. In a scenario, where goods are handed over to the transporter and neither of the parties – a consignor nor a consignee generates the E-Way Bill, the onus lies on the transporter to generate it.
When either of the parties generates the E-Way Bill, the recipient of the consignment is bound to either accept or reject it on the portal. In case there is no response (no action is taken) from the recipient within 72 hours, it shall be deemed to have been accepted. For generating an E-Way Bill from the portal, the registered party should have a portal login.
The primary objective of GST is to unify India with a common in-direct taxation system. One of the most significant aspects of GST is the removal of the inter-state check posts – particularly the transit delays encountered in some states like Rajasthan, Maharashtra, Bihar or Jharkhand. It is expected that both the GST levy and E-Way Bill would weed out such transit delays and at the same time, helps in plugging issues related to tax evasion.
Technically speaking, every E-Way Bill that is generated by a consignor or a consignee is to be automatically updated in the GSTR1 (sales return) of the supplier, thus providing minimal scope for tax evasion on shipments. In the earlier tax regime, officials used to cross-check the way bills with the filed tax returns to verify whether all the consignments were covered within the tax net or not.
On the other hand, a single GST E-Way Bill for the movement of goods throughout the country is expected to save the lot of paperwork and do away with various inter-state clearances for consignors, consignees, and transporters. Earlier, every state used to frame its own rules for the transportation of goods from one place to another.
Is it relevant to me?
As per a McKinsey report, logistical hurdles cost the Indian Economy an extra $45 billion or 4.3 per cent of GDP every year. Hence, any change in the existing regime that can provide even small benefits is appreciable. Also, the LPI Survey by World Bank states that the logistical costs in India are much higher (14%), compared to other major countries (6-8%). With the integration of GST E-Way Bill, it is expected that the logistics costs would get trimmed by 20 per cent. While the picture looks rosy on paper, it is completely dependent on the GST backbone to work perfectly to overcome any errors and mismatches, even when encountering heavy traffic.
Conclusion
What we expect is a smooth sailing for businesses through the introduction of this new GST E-Way Bill, despite minor glitches. This should become another milestone in the economic progress of the country, ensuring tax compliance at the highest level.
The government is looking at complete overhaul of the electronic-way-bill (e-way bill) system under the goods and services tax (GST) regime instead of tinkering with its structure or scrapping it altogether, sources in the know told DNA Money.
According to him, the e-way invoice could be relaunched by end of this month or early next.
The GST Council, the apex decision-making body on issues related to the new unified indirect tax, had made e-way-bill mandatory for movement of goods over Rs 50,000 between states from February 1. However, due to troubles encountered by businessmen while generating the e-way invoice, the decision was rolled back on the first day itself.
Currently, the GST Network (GSTN) that maintains the digital infrastructure on which various platforms are being developed for consumer services, is working on making e-way-bill “simpler and better”.
“They are already working on these things, on making it (GST e-way-bill) simpler and better but they don’t want to announce the date till they are 100% confident that it will work (without any glitch). The government is thinking of changing the e-way-bill system completely, only the back-end – the hardware and software. They will alter only the way it (e-way-bill) is stored on the portals, how it interacts with invoices and other such things,” said the source.
According to him, there could be some tweaks on how the e-way invoice was being processed internally.
“They are looking at what gets stored, how much time it takes to generate the bill and what the printing options are. All these are being examined very closely,” said the source, who did not want to be named.
The source said the government had ruled out scrapping of e-way-bill as they believe it will help plug leakages in GST revenues, which had fallen for three consecutive months till December.
“It is unlikely that the government will scrap the e-way-bill. They seem to feel that e-way-bill is going to prevent a lot of evasions. They will never give up on e-way bill. We are certainly going to have e-way bill. It’s a question of time as to when it starts now,” said the source.
Currently, the way the software is designed is very cumbersome and confusing for traders to generate e-way-bill for large dispatches and single products that need to be transported in many trucks.
M S Mani, partner, Deloitte India, recommended a “staggered rollout” to enable a phased transition to a new system. “The GST Council could consider a staggered rollout of the e-way-bill by initially mandating it for interstate transactions and on a successful rollout, extend it for intrastate movements. In respect of intrastate movements, a threshold of Rs 2 lakh could be mandated initially, which on glitch free introduction could progressively be reduced to Rs 1 lakh and thereafter to Rs 50000. This would enable a phased transition to a new system with better monitoring, both from a business and government perspective,” he said.
Another tax expert, who spoke off-the-record, said most countries that have introduced GST do not have e-way-bill.
“There is no concept of e-way-bill anywhere else (in the world). Everywhere, it is just the invoice that goes with the truck. Many countries do not even have an invoice-matching system as tax evasion is much lower in those countries,” he said.
the government is working to introduce other anti-evasion tools to shore up the collection of GST, where it suspects massive leakage is taking place.
