Ahead of the proposed rollout for inter-state movement of goods valued over Rs 50,000 from April 1, the government tweaked certain rules for the electronic way bill or e-way bill. The notified changes include an increase in distance norm for intra-state movement of goods from consignor to transporter to 50 km from 10 km earlier along with permitting job workers to generate the electronic receipt for movement of goods.
The changes will also help e-commerce firms and ease the method of calculation of value of goods to be depicted in the bill.
In a major relief to FMCG companies, the government has allowed businesses to consider only the value of taxable supply for the purpose of generating e-way bill in cases where sales invoice includes both exempted and taxable supply of goods. This would mean that if food products which are subject to GST are being sent along with items which are exempt from GST, say milk, then only the value of food products shall be considered for e-way bill.
Also, it has done away with the requirement to produce e-way bill for intra-state movement of goods by road in cases where value of each consignment is less than Rs 50,000 but aggregate consignment value in the vehicle is more than Rs 50,000.
As per the amendments, the validity of e-way bill shall now be counted as the period expiry at midnight of the day immediately following the date of generation of e-way bill, instead of 24 hours earlier. For example, if an e-way bill is generated at 3 pm on March 8 for a movement within 100 km, the validity of one day shall be counted till midnight of March 9. Earlier, the e-way bill would have been valid till 3 pm of March 9.
As per the changes in the rules, in addition to principal manufacturer/brand owner, the job worker can also generate e-way bill in case of inter-state movement of goods to job worker irrespective of the consignment value. Earlier only the principal manufacturer could only issue the e-way bill.
In addition to movement of regular goods, the validity of e-way bill has been revised, considering the difficulties in carrying Over Dimensional Cargo, which typically includes shipment of heavy industrial parts such as those used in power plants. The e-way bill for over dimensional cargo will be valid for one day up to 20 km and an additional day for every 20 km travel thereafter.
Also, a supplier or recipient of goods can now generate the bill even after the movement of cargo, a change from earlier when it was mandatory to do so before the transportation began. Further, a unique number generated after filing the first part of e-way bill will now be valid for 15 days from 3 days earlier.
Tax experts said the changes have made the rules simpler, but also expressed concern about the government’s preparedness for the e-way bill rollout. “With these changes, e-way bill rules have become much simpler than earlier. The timing of these changes suggests that government is keen to implement the e-way system from April 1, 2018, as indicated recently,” Pratik Jain, Partner and Leader Indirect Tax, PwC said.
“The changes done in the e-way bill rules would bring clarity on certain practical issues, which is welcome. The other big issue concerning the industry is whether e-way bills are getting implemented from April 1 and whether the government is fully prepared from an IT system’s perspective for a smooth implementation,” EY India’s Tax Partner Abhishek Jain said.