E-Way Bill Exemptions: Who Doesn’t Need to Generate an E-Way Bill?

India's Goods and Services Tax (GST) law was implemented to solve several issues with the previous legislation.

Lack of transparency concerning the government and taxpayers was one of the primary issues.

Digitizing the procedure is the way the government is ensuring transparency under the GST regime. One such measure is the e-way bill.

What is an E-Way Bill?

An e-way bill is a digital document necessary for the transportation of goods valued over Rs. 50,000. It includes information about the goods, the supplier, the recipient, and the transporter.

Businesses can generate it using e-way bill software to ensure smooth compliance with GST rules.

Key Requirements for Generating an E-Way Bill

• An e-way bill is mandatory for goods valued above Rs. 50,000.
• It is required for both inter-state and intra-state movement of goods.
• The bill must include details such as invoice number, transport details, and recipient details.
• It must be generated before the movement of goods begins.

E-Way Bill Exemptions: Cases When an Eway Bill is Not Required

While e-way bills are essential for most transactions, there are specific exemptions. Businesses do not need to generate an e-way bill in the following cases:

1. Exemptions Based on Mode of Transport

• Goods transported by non-motorized vehicles (such as bullock carts, cycles, or hand-pulled carts).
• Goods moved within a single state for a very short distance (20 km or less) for weighing purposes.

2. Exemptions for Specific Transactions

• Goods moved from a port, airport, air cargo complex, or customs station to an inland container depot for customs clearance.
• Goods transported under customs supervision or customs bond.
• Transit cargo to or from Nepal or Bhutan.
• Goods transported by the government, defence formations, or local authorities.
• Empty cargo containers transported from one location to another.

3. Exemptions Based on Type of Goods

• Goods that are exempt from GST under specific notifications.
• Goods classified as non-supply transactions under Schedule III of the GST Act, such as employer-employee services.
• Goods moved between two units of the same business within a state, if the value is below Rs. 50,000.
• Goods transported for exhibition or demonstration purposes without a sale.
• Goods transported for job work by unregistered businesses.

E-Way Bill Exemption for Small Businesses

Small businesses often struggle with GST compliance. To ease their burden:

• No e-way bill is required for goods valued below Rs. 50,000 (except for specific cases like interstate handicraft goods or job work).
• Small traders and manufacturers dealing in unbranded agricultural products, dairy items, and essential goods are exempt.
• Businesses using a local transport service for small deliveries within city limits may not need an e-way bill.

How to Check E-Way Bill Exemption Criteria

To determine whether an e-way bill is required:

Check the value of the goods

If below Rs. 50,000, it may be exempt.

Identify the type of goods

Some goods like petroleum, liquor, and jewelry are exempt.

Verify the mode of transport

Non-motorized transport does not require an e-way bill.

Confirm the nature of the transaction

If it’s for customs clearance or government use, it may be exempt.

Consequences of Not Generating an E-Way Bill When Required

Failure to generate an e-way bill when required can lead to penalties, including:

• A fine of Rs. 10,000 or the tax amount (whichever is higher).
• Goods being seized and held until the penalty is paid.
• Delays in transportation, leading to business losses and supply chain disruptions.

Best Practices for Businesses to Ensure Compliance

• Use a GST e-way bill software to automate and track bill generation.
• Train staff on e-way bill requirements and exemptions.
• Keep proper records of invoices and transport details to avoid penalties.
• Regularly check GST notifications for any updates on exemptions.

Conclusion

A taxpayer won't have to generate an e-way bill if he fits into any of the above categories. Even though taxpayers who qualify for e-way bill exemptions are excluded from this requirement, they still need to make sure that other documents, such as the bill of supply and invoice, follow the criteria.

A taxpayer who breaches the e-way bill regulations faces harsh penalties.

To remain compliant and steer clear of penalties, businesses should implement an e-way billing system.