If you do logistics in India, you must be familiar with the importance of E-Way Bills under the GST regime. This electronic document checks for compliance and enables movement of goods worth more than Rs. 50,000. What is its goal? For fostering transparency, preventing tax evasion, and ensuring smooth functioning of supply chains.
Did you know that in certain scenarios an E-Way Bill does not need to be generated? Correct, there are certain specific exemptions mentioned in the GST Act. Interested to know the moments wherein you don’t need to fret? Let us simplify.
Important Points Regarding E-Way Bills
An E-Way Bill (or Electronic Way Bill) is a document required for the movement of goods having value of more than Rs. 50,000. The documents can be created online at the designated E Way Bill site with details such as place of supply, place of dispatch, and expenditure on goods.
The take aways? It covers both intra and interstate transportation. Failure to comply can lead to fines or confiscation of merchandise. Although, this isn’t always black and white. The rules are flexible under some conditions.
When Is It Necessary To Have One?
If you are moving items that are valued in excess of Rs. 50,000, an E-Way Bill is generally required. This rule is applicable to all types of transportation, including land, sea, rail, and air.
However, there are certain exceptions. Below are 6 situations in which an E-Way Bill is not necessary in the context of GST.
Six Qualifying Situations In Which The Use Of An E-Way Bill Is Not Required
1. Movement Of Goods Described In The Annexes
Items that fall under the Annex of Rule 138 of the GST Act will not need an E-Way Bill. Are you curious to know what that includes? They consist of such as:
– Alcoholic beverages
– Raw materials for petroleum products
– Household item liquefied petroleum gas
– Goods transferred within the purview of the Ministry of Defence
Why? These types of goods often have special movement procedures or fall within highly controlled movements.
2. E-Goods: Products Transported While Being Custom Supervised
In the case were goods are transported under the supervision of customs e-Way bills are not necessary. This includes the following items:
Customs transit bonds between two warehouses.
Moved to or from ports, airports and Land Customs Stations.
This exemption allows for international trade to often be conducted without controls from a regulatory body, which ensures that trade principles are being followed, yet adds no extra burdens.
3. Goods Transportation Between Nepal And Bhutan
Are you trading with Bhutan or Nepal? Good news for you. The movement of goods between India and those neighbouring countries are not required to comply with the E-Way Bill.
The policy facilitates trade across borders within the region and reduces barriers for exporters and importers dealing with those countries.In other words, it eliminates obstacles.
4. All Other Certain Exempted Goods Transportation
Some goods are exempt as a result of their use or nature. These include books, newspapers and even agricultural produce. Here are additional examples.
Other dairy products such as milk, eggs, curd
Human blood or semen
Food crops such as rice, wheat and pulses
This exemption is allowed because these items are either basic and essential commodities or are deem of little value and would not attract significant GST revenue.
5. Transportation of Goods for Job Work
When transportation is done for job work involving processes like assembling, manufacturing, or other types of processing, exemptions are applicable depending on the value of the transported goods or the policies of a particular state.
There is a special provision related to the movement of goods for “goldsmith” job work. These goods do not require an E-Way Bill while crossing state borders.
6. Transportation of Handicraft Goods
There is something special for artisans and small-scale producers. Handicraft goods transported by a registered person for small-scale interstate trade are exempted from the E-Way Bill.
This has been done to encourage small traders and traditional crafts without putting extra burden on bureaucracy.
Purpose Statement: Why These Exemptions Exist
Such exemptions exist in order to:
Relieve some burden and allow small-scale activity without being overly compliant.
Facilitate movement of specific goods that are non-essential or do not pose a significant impact.
Foster trade for selected industries or particular regions.
Final Thoughts
Usually, rules of taxation tend to be daunting, akin to an ancient scroll. This is the reason why it is crucial to stay alive to different definitions of ‘exemptions’. While generating an E-Way Bill can seem to be one of the more cumbersome requirements, knowing when not to create it is a great time and stress saver.Importantly, compliance in every business that moves goods goes beyond avoiding fines, it’s about ensuring efficacy in running the business.
Looking to learn more about managing your GST obligations in a timely manner? Sign-up for our newsletter or take a look at the insightful webinars hosted by our professionals. Knowing more is beneficial, and we will power your business at every stage.
