What is E-way Bill? Eway Bill System, Rules And Generation Process

The E-way Bill system is a crucial aspect of the Goods and Services Tax (GST) regime. E-billing offers a modern approach to invoicing and payment, replacing paper bills with a convenient electronic system.  Customers can access their e-bills through a company website or receive them via email with an attached electronic document. This allows for easy online review of bills before making a payment. 

What is the E-way Bill?

An e-way bill is an electronic permit functioning as a permit for transporting goods. The Goods and Services Tax (GST) regime introduced a revolutionary system for streamlining the movement of goods: the E-way Bill system. It acts as a virtual record containing crucial details about the consignment, including:

• Description of goods
• Value of goods
• Origin and destination of the goods
• Details of the supplier (consignor) and recipient (consignee)
• Transporter information (if applicable)

The e-way bill system promotes transparency and efficiency in goods movement by:

• Facilitating Tax Compliance: It ensures businesses adhere to GST regulations and pay the applicable taxes.
• Curbing Tax Evasion: By tracking goods movement, it deters practices like transporting unregistered goods.
• Reducing Checkpoints: E-way bills minimize the need for physical verification at checkpoints, leading to smoother movement.

The advantages of e-billing extend beyond just streamlining the invoicing and payment process. E-billing reporting provides valuable financial insights that can be used for forecasting and making informed decisions about cash flow. For example, a company might consider invoice financing or factoring based on this data. There are two primary methods for e-billing payments: biller-direct and bank aggregator. Biller-direct systems have customers login to the company's website to view and pay their bills, while bank aggregator systems have customers access their e-bills and make payments through their bank's online interface.

Read Also | How AI is Revolutionizing Your Accounts Payable?

Who Needs an E-way Bill?

The responsibility of generating an e-way bill typically falls on one of the following parties:

• Registered Supplier: If the consignment value exceeds ₹50,000, a registered supplier under GST must generate the e-way bill.
• Registered Recipient: In specific cases, the registered recipient can generate the e-way bill if the supplier is unregistered.
• Transporter: The transporter can also generate the e-way bill, especially if pre-informed about the movement of goods exceeding the threshold value.

Important Note: All parties involved (supplier, recipient, transporter) have the right to access the e-way bill details after generation.

When is an E-way Bill Required?

An E-way bill is mandatory for the movement of goods exceeding ₹50,000 in value, applicable to both inter-state (between states) and intra-state (within a state) transportation. However, there are exceptions:

• Goods Upto ₹50,000: Movement of goods with a total value of ₹50,000 or less is exempt.
• Specific Goods: Exempted goods under GST or perishable items may be exempt under specific provisions.
• Movement Within a State: Some states may have a higher threshold value for intra-state movement before requiring an e-way bill. Check with your state's GST authorities for variations.

Pro Tip: Always stay updated on the latest E-way bill rules and threshold limits applicable to your state to ensure compliance.

See Also | 5 Steps to Follow For Implementing E-invoicing

Pre-Requisites for Generating an E-Waybill

To generate an e-way bill, you will need the following:

• GSTIN of Supplier and Recipient: A valid GST Identification Number (GSTIN) of both the supplier and recipient is mandatory.
• Product Description: A clear description of the goods being transported is required.
• HSN Code: The Harmonized System Nomenclature (HSN) code for the specific goods must be included.
• Invoice/Bill Details: Information from the invoice or bill related to the consignment, such as value and quantity, needs to be provided.
• Transporter Details (if applicable): If a transporter is involved, their details like vehicle registration number need to be entered.

Generating an E-way Bill: A Step-by-Step Guide

The E-way Bill system is a user-friendly online portal accessible at E-Way Bill. 

Here's a breakdown of the process:

1. Registration: Businesses registered under GST can access the portal using their GST login credentials.
2. E-way Bill Generation: Enter details like supplier information, recipient information, product description with HSN/SAC code, and vehicle details (if applicable).
3. Document Upload (Optional): Upload supporting documents like invoices or purchase orders for reference (not mandatory).
4. E-way Bill Confirmation: Upon successful submission, a unique E-way Bill Number (EBN) is generated, serving as electronic permission for transporting the goods.

Remember: Ensure the e-way bill remains valid throughout the transportation journey to avoid penalties.

Required Documents for E-way Bill Generation

The documents required for generating an e-way bill depend on the mode of transportation:

Common Documents:

• Invoice/Bill of Supply/Challan: A copy of the invoice or document related to the consignment is mandatory.

Example:

If an e-way bill is generated for a consignment traveling 520 kms by a regular conveyance, the validity would be:

1. Initial validity (less than 200 kms): 1 Day
2. Additional validity (for 320 kms - additional 200 kms): 2 Days (1 Day for every additional 200 kms or part thereof)
3. Total Validity: 1 Day + 2 Days = 3 Days

Additional Documents Based on Transportation Mode:

• Transport by Road: Transporter's ID or vehicle registration number.
• Transport by Rail, Air, or Ship: Transporter's ID, transport document number, and date on the document.

Validity of E-way Bills

The validity period of an e-way bill depends on the distance traveled by the goods. It typically follows a one-day validity for every 100 kilometers.

Must Know | Top 5 AI Billing Software for Small Businesses in 2024

Conclusion

Understanding the E-way Bill system empowers businesses to navigate the movement of goods seamlessly while adhering to GST regulations. By following these guidelines and staying updated on any revisions, businesses can ensure a smooth flow of goods.