Who must generate an e-way bill?

An e-way bill is required for the movement of goods under GST when certain conditions are met, and it is typically generated by the consignor (seller), transporter, or consignee (buyer). It is primarily needed when goods worth more than Rs. 50,000 are being transported. Here’s a detailed breakdown of who must generate the e-way bill:

1. Consignor (Supplier):

• The consignor, or the supplier, is the main party responsible for generating the e-way bill. They must create the e-way bill in the following scenarios:
  • Sale of goods: When the goods are sold and being transported, the supplier must generate the e-way bill before the goods leave the premises.
  • Goods movement under job work: If goods are sent for job work, the consignor is responsible for generating the e-way bill unless the job worker generates it.
  • Inter-state movement of goods: If goods are being transported between states, an e-way bill must be generated by the consignor or the transporter.

2. Transporter:

• If the consignor or consignee does not generate the e-way bill, the transporter can generate it. The transporter may do so when:
  • Goods are being moved: The transporter is responsible for generating the e-way bill if they are hired to transport goods, and the consignor or consignee has not generated it.
  • Third-party transport: If a third-party logistics provider or another individual is responsible for the transport of goods, they may create the e-way bill for the goods being moved.

3. Consignee (Receiver):

• In some cases, the consignee (buyer) may need to generate the e-way bill. For example:
  • When the goods are being received directly at the buyer’s location or the buyer’s premises and they are the party responsible for generating the bill.

4. In Case of Movement Between Business Locations:

• When goods are transferred between the business locations of the same entity, an e-way bill must be generated if the value exceeds Rs. 50,000. The entity transferring the goods will generate the bill.

5. In Case of Return of Goods:

• If goods are being returned to the seller after sale (e.g., defective goods, rejected goods), the consignee (the buyer) may be responsible for generating the e-way bill for the return movement of goods.

6. For Movement of Goods Under Specific Circumstances:

• Exports and Imports: Even though exports are generally zero-rated under GST, an e-way bill is required when goods are moved for export purposes.
• Stock Transfers or Branch Transfers: When goods are moved between different business locations (branches), the business entity must generate the e-way bill if the value exceeds Rs. 50,000.

Provision & Acts in the Indian Constitution Related to E-Way Bill

The Indian Constitution does not explicitly mention the e-way bill; however, the e-way bill system is governed by provisions in the Goods and Services Tax (GST) framework, which is based on the 101st Constitutional Amendment Act, 2016. This amendment was crucial in laying down the framework for GST in India and empowering the Central Government and State Governments to legislate on matters related to goods and services tax, including provisions for e-way bills.

Key provisions and acts governing the e-way bill include:

1. 101st Constitutional Amendment Act (2016):
   • This amendment facilitated the introduction of GST in India, providing the framework for indirect taxation. It amended several articles of the Constitution, including Article 246A, which gives the authority to the Central Government and State Governments to levy and collect GST on goods and services, including the imposition of the e-way bill system for goods movement.
2. Central Goods and Services Tax (CGST) Act, 2017:
   • The CGST Act is the principal act that lays down the rules and provisions regarding the implementation of GST for goods and services. The e-way bill provisions are covered primarily under Section 68 of the CGST Act.
     • Section 68 authorizes the Central Government to mandate the generation of an e-way bill for the movement of goods exceeding Rs. 50,000 in value.
     • Rule 138 under the CGST Rules prescribes the procedures for generating the e-way bill.
3. State Goods and Services Tax (SGST) Act, 2017:
   • Each state has its own SGST Act, which works in conjunction with the CGST Act. The provisions for generating an e-way bill under state-level GST laws are generally aligned with the provisions in the CGST Act.
4. Integrated Goods and Services Tax (IGST) Act, 2017:
   • The IGST Act is applicable to the movement of goods across state borders. It deals with the taxation of inter-state supply of goods and includes provisions related to e-way bills for interstate transportation.
5. GST E-way Bill Rules:
   • The GST E-way Bill Rules were specifically notified under the CGST Rules, 2017, to address the movement of goods. The rules specify who is responsible for generating the e-way bill and the conditions under which it is required.
   • Rule 138 specifically lays down the conditions and details for generating and carrying an e-way bill, including:
     • Threshold value: E-way bills are required for goods worth more than Rs. 50,000.
     • Penalties for non-compliance: Failure to generate an e-way bill when required can result in penalties and detention of goods.

Landmark Cases Related to E-Way Bills

There have been a few landmark cases that have clarified issues related to e-way bills under GST. These cases generally involve disputes regarding non-compliance with e-way bill rules, penalties for failure to generate e-way bills, and seizure of goods for e-way bill violations. Some significant cases include:

1. M/s. K. G. K. Steel & Co. v. Union of India (2019):
   • This case dealt with the penalty and seizure of goods for failure to generate an e-way bill. The petitioner argued that the goods were not accompanied by an e-way bill due to a misunderstanding.
   • The Court ruled that the e-way bill is mandatory for goods exceeding Rs. 50,000 in value, and the seizure and penalty for non-compliance were upheld.
   • The ruling emphasized that businesses must ensure compliance with the e-way bill rules and generate it before the transportation of goods.
2. M/s. S. M. Exports v. State of Uttar Pradesh (2020):
   • This case involved the movement of goods for export without a valid e-way bill. The petitioner challenged the detention of goods and the imposition of penalties.
   • The Court upheld the need for compliance with e-way bill rules and ruled that goods cannot be moved without the appropriate e-way bill, even if the goods are for export. It emphasized the importance of adhering to GST regulations.
3. M/s. J.K. Chemicals v. GST Authorities (2018):
   • In this case, goods were being transported without an e-way bill and were subsequently detained by authorities. The petitioner argued that the e-way bill was not required.
   • The Court ruled that e-way bills must be generated if goods are transported for sale, even if they are for internal movement within the same company. The penalty for not generating an e-way bill was upheld.
4. M/s. Yash Impex v. Union of India (2019):
   • This case focused on the issue of non-generation of an e-way bill for goods being transported across state borders. The Court ruled that penalties are applicable for non-compliance with e-way bill rules, and there is no exemption from this requirement.
   • The Court clarified that e-way bills are necessary to track and monitor the movement of goods and ensure that no tax evasion occurs.

Conclusion

An e-way bill must be generated for the movement of goods under GST by the consignor (supplier), transporter, or consignee (receiver) depending on the circumstances. The CGST Act (2017), along with the SGST and IGST Acts, governs the generation and compliance of e-way bills under the GST regime. The e-way bill system is essential for tracking goods movement and preventing tax evasion. Landmark cases have reinforced the importance of compliance with the e-way bill provisions and the penalties for failure to comply.