The concept of way bill and the requirement for every consignment of goods being moved to be accompanied by a way bill (besides other documents) has been retained under the GST regime, albeit electronically. Amidst news reports raising concern over how it would perpetuate the existing issues plaguing the system even in the GST regime, other common questions revolve around operationalizing the scheme and ensuring due compliance with the Draft Electronic Way Bill Rules (‘draft rules’) released on 13 April, 2017. This article seeks to shed light on the provisions as contained in the draft rules.
E-Way Bill and E-Way Bill Number
The draft rules require every registered person causing movement of goods to furnish information about every consignment whose value exceeds INR 50,000 before movement commences. The information should be furnished in cases where the movement of goods is caused in relation to a supply, or for reasons other than supply (such as sales returns, stock transfer, movement for job work, etc.) and also if it is because of inward supplies from an unregistered person. If transportation is by the parties to the supply in their respective capacities as consignor or consignee, such party who has transported the goods (whether in their own conveyance or in hired conveyance) should furnish transportation details in the prescribed form. On the other hand, if the transportation of the consignment is handed over to a transporter such as a Goods Transport Agency (‘GTA’), the GTA is also required to furnish details of transportation in the relevant form.
An e-way bill will be generated on the common portal after the relevant form has been filed. Once the e-way bill is generated, a unique e-way bill number termed ‘EBN’ will be available on the common portal to the supplier, the recipient and the transporter. If the consignor has not generated the information in Form GST INS-01 despite the value of consignment being more than INR 50,000, the transporter is required to generate the same by using the invoice or bill of supply or delivery challan.
Supplies by unregistered persons, transfers and multiple consignments
Assessees are permitted to voluntarily generate an e-way bill even in cases where the consignment value is lower than INR 50, 000 and where the movement of goods is caused by an unregistered person. In cases where an unregistered person supplies to a registered person who is identifiable at the time the goods begin movement, it will be deemed that the registered person receiving the consignment has caused the goods to be moved, and will be required to generate an e-way bill.
A new e-way bill will be required to be generated where the goods are transferred from one conveyance to another in the course of transit and such new e-way bill will be required before such transfer. A new e-way bill is to be generated by the transporter before each such transfer and movement occurs, detailing the change in mode of transport. Where one conveyance comprises of multiple consignments, the transporter is required to indicate the serial number of e-way bills generated for each consignment, and then generate a consolidated e-way bill on the common portal. Again, the consolidated e-way bill should be generated before the goods commence movement.
The draft rules require an e-way bill to be cancelled if, after generation, the consignment is not being transported at all, or is not being transported as per the details furnished in the e-way bill. However, the cancellation must be effected before it is verified in transit.
Validity period of e-way bills
The Draft Rules prescribe distance-based validity periods for the e-way bills in the following manner:
|Distance (Km)||Valid for (from date of generation of e-way bill)|
|Less than 100||1 day|
|1000 or more||15 days|
Thus, for even the most expansive of transit times, an e-way bill shall be valid only for 15 days. Significantly, the draft rules do not provide for renewal of an e-way bill, where the transit time runs beyond 15 days. They do not even discuss the eventuality of transportation taking longer than 15 days. How then, is one expected to comply where the destination of the goods-in-transit is in a remote location, or where the delay is on account of unforeseen exigencies? Considering the physical infrastructure of the nation, a provision for renewal of e-way bill seems to be in order, to cover the above situations.
Acceptance of e-way bill and validity in particular State
The recipient is required to communicate acceptance or rejection of the details of the e-way bill after the same are made available to him. If there is any lack of communication within 3 days, the details shall be deemed to have been accepted. One significant modality brought about by the draft rules is that the e-way bill generated under the CGST Rules or SGST Rules of a particular State shall be valid only in that State.
Digitizing the economy
The person in charge of a conveyance is mandated to carry a set of documents during transit. An invoice, bill of supply or delivery challan have been identified alongwith an e-way bill or EBN. The draft rules mention Invoice Reference Number (IRN) instead of tax invoice for the purpose of verification. The e-way bill or EBN can be carried either in physical form, or in a copy mapped to the RFID that will be embedded on to the conveyance. While further information is awaited on how the ambitious plan of attaching RFID tags to every conveyance is going to be operationalized by the Government, the draft rules empower the Commissioner to notify a class of transporters to obtain a unique RFID and have the same embedded on their conveyance, so that the e-way bill may be mapped to the RFID prior to the movement of goods itself. It is anticipated that goods of special importance, and modes of transport that are likely to be misused will be covered under the unique RFID in order to better monitor plying of such conveyances.
Interception of vehicles and verification of e-way bills
The draft rules empower the Commissioner to authorize interception and verification of e-way bills and EBNs. However, in the event of any specific intelligence received of tax evasion, the conveyance shall be physically verified by the departmental officer. A welcome provision is that the physical verification of goods within one State cannot occur after the goods have already been physically verified during transit at one place within the State, unless specific information of tax evasion is received. Where a vehicle has been detained for more than 30 minutes, the transporter is enabled to upload the information of detention on the common portal in Form GST INS-04.
The draft rules seem to extend some welcome relief in certain respects, by limiting to one instance the physical verification of goods within a State, and by enabling e-way bills to be generated and cancelled over SMSs. Such trade friendly measures would go a long way in ensuring ease of business. While the installation of RFID tags would assist in reducing the paper trail and can be portrayed as an eco-friendly measure, the stupendous task of implementing RFID tags requires robust IT infrastructure and infallible digital systems.
[The author is an Associate, Lakshmikumaran & Sridharan, Hyderabad]