Understanding GST E-Way Bills

The E-Way Bill, or Electronic Way Bill, is mandatory for the transportation of consignments valued above a certain threshold, ensuring transparency and compliance in supply chains across the country. It serves as a digital permit that must be generated on the official GST portal before goods are dispatched, allowing authorities to monitor inter-state and intra-state movements efficiently. This mechanism not only streamlines logistics but also integrates with other GST processes like e-invoicing, fostering a more accountable business environment.

Introduced under Section 68 of the Central Goods and Services Tax (CGST) Act, 2017, and detailed in Rule 138 of the CGST Rules, 2017, the E-Way Bill system was rolled out nationwide in April 2018. Its primary objective is to prevent unauthorized transport of goods, reduce paperwork, and enable real-time tracking through a unique E-Way Bill Number (EBN).

Legal Requirements

Compliance with E-Way Bill regulations is non-negotiable for entities involved in the supply chain. The core requirement is to generate an E-Way Bill for any movement of goods—whether for supply, inward receipt from unregistered persons, or other reasons—where the consignment value exceeds ₹50,000 in a single invoice, bill, or delivery challan. This threshold applies to both inter-state and intra-state transports, though some states may have variations or exemptions for specific goods.

The responsibility for generating the bill typically falls on the registered supplier or the recipient if the supplier is unregistered. Transporters can also generate it if provided with the necessary details.

To create an E-Way Bill, users must log into the GST portal (ewaybillgst.gov.in) and furnish details such as the GSTIN of the supplier and recipient, invoice details, mode of transport, vehicle number, and approximate distance. Once generated, the bill is valid for a period determined by the distance: one day for up to 200 km, with an additional day for every subsequent 200 km or part thereof.

Certain exemptions exist, including for goods like perishable items, handicrafts transported by artisans, or movements within 50 km for job work without crossing state borders. However, even exempt cases may require basic documentation. During transit, the person in charge of the conveyance must carry a physical or digital copy of the E-Way Bill, along with the tax invoice or delivery challan.

Updates to vehicle details are mandatory in case of breakdowns or transshipments, and failure to do so can lead to automatic penalty notices under the recent 2025 updates. Businesses are advised to integrate E-Way Bill generation with their ERP systems for efficiency, especially amid the increasing use of data analytics for enforcement.

Penal Provisions for Non-Compliance

• Detention and Seizure of Goods and Conveyance: Under Section 129 of the CGST Act, 2017, if goods are transported without a valid E-Way Bill or with significant discrepancies, authorities can detain the vehicle and seize the consignment until the applicable tax and penalty are paid. This provision aims to prevent tax evasion during transit.

• Penalty Structure When Owner Comes Forward: If the owner of the goods claims responsibility, the penalty is 200% of the tax payable on the goods, in addition to the tax itself, to secure the release of the detained goods and vehicle.

• Penalty When Owner Does Not Come Forward: In cases where the owner does not claim the goods, the penalty escalates to 50% of the value of the goods, reduced by any tax already paid, plus the applicable tax.

• General Penalty for Violations: As per Section 122 of the CGST Act, a minimum penalty of ₹10,000 or the amount of tax evaded (whichever is higher) applies for transporting goods without proper documentation, including minor but avoidable errors like incorrect GSTIN or expired bills.

• Additional Consequences for Repeated Offenses: Persistent non-compliance may result in confiscation of goods under Section 130, suspension of GST registration, further audits, or even criminal proceedings in severe cases of evasion.

• Appeal and Resolution Options: Businesses can appeal penalties through the GST Appellate Tribunal. Proactive measures, such as integrating E-Way Bill systems with ERP software, are recommended to mitigate risks and ensure compliance.