E-Way Bill Regulations and Their Influence on E-commerce Operations

Logistal management is fundamental to the expansion of the e-commerce sector, acting as a crucial factor in business success and customer service.

Recent E-Way Bill Updates

• August 29, 2021: From May 1 to August 18, 2021, taxpayers were exempt from e-way bill blocking due to overdue GSTR-1 or GSTR-3B filings (for monthly filers with two or more months due, and QRMP taxpayers with one or more quarters due) for March-May 2021.
• August 4, 2021: E-way bill blocking for GSTR-3B non-filing resumed on August 15, 2021.
• June 1, 2021:
  • The e-way bill portal clarified that a suspended GSTIN cannot generate an e-way bill. However, a suspended GSTIN can still be recorded as a recipient or a transporter on a generated e-way bill.
  • The “Ship” mode of transport was updated to “Ship/Road cum Ship.” This allows users to enter a vehicle number if goods initially move by road and a bill of lading number and date for movement by ship. This change facilitates Out-of-Dimension Cargo (ODC) benefits for mixed-mode shipments and enables the updating of vehicle details when goods are moved on the road.
• May 18, 2021: Notification 15/2021-Central Tax by the CBIC stated that the blocking of GSTINs for e-way bill generation is now considered only for the defaulting supplier’s GSTIN, and not for the defaulting recipient’s or the transporter’s GSTIN.

How E-Way Bill Rules Affect E-commerce Operators

Many e-commerce businesses collaborate with third-party logistics service providers to meet their operational needs, while some have developed their own in-house logistics capabilities. Approximately half of the logistics market is served by in-house operations, with the remaining half handled by external providers, including specialized e-commerce logistics firms, India Post, and traditional logistics companies.

E-commerce Retailers' Logistics Strategies

E-commerce companies adopt various strategies to manage their logistics requirements:

• Internal Logistics: The in-house logistics divisions of e-commerce retailers handle large volumes and sometimes extend their services to other e-commerce businesses.
• Conventional Logistics Service Providers (LSPs): These third-party providers have expanded into delivering for the e-commerce retail sector. They benefit from extensive reach, established networks, and significant experience in providing nationwide logistics services.
• E-commerce-Focused LSPs: Driven by the rapid growth of e-commerce, specialized logistics providers emerged over the past 3-4 years, now capturing about 50% of the sector. Their success stems from superior service, diverse product offerings, technology investments, quick cash reimbursement, and competitive pricing.

A Brief Overview of Waybill History

Before the implementation of GST, physical waybills, obtained from VAT authorities, were mandatory for goods movement. This complex system created significant obstacles and compliance burdens for interstate goods transport. The transport industry spent a substantial portion (30-60%) of its resources and time on tax compliance, with 16% specifically dedicated to truck queues at interstate checkpoints for inspections. In India, trucks typically cover an average of 85,000 km annually, significantly less than the 150,000-200,000 km in developed nations, highlighting the need for extensive logistics reforms. With GST's introduction, the demand for integrated logistics solutions has increased as e-commerce firms reduce their state-specific warehouses. The e-way bill aims to resolve the primary challenges of interstate goods movement, such as long queues and cumbersome documentation at checkposts.

E-Way Bill Regulations

An e-way bill is generated by the consignor or consignee if goods are transported by their own/hired conveyance, or by air/railways/vessel. If a transporter moves goods by road, they are responsible for generating the e-way bill. When neither the consignee nor the consignor generates the e-way bill, and the goods' value exceeds INR 50,000, the obligation falls to the transporter.

Information Required Before Goods Movement and E-Way Bill Generation

I. Registered individuals responsible for moving goods with a consignment value over INR 50,000 must electronically submit information about these goods on the common portal in Part A of Form GST INS-01 before transit, for reasons including: (i) Supply of goods; (ii) Reasons other than supply; or (iii) Inward supply from an unregistered person.

a) If a registered person transports goods as a consignor or recipient of the supply as consignee, using their own or hired vehicle, such registered person can generate an e-way bill electronically on the common portal in FORM GST INS-1 after providing the information required in Part B of form GST INS-01.

b) If an e-way bill is not generated as per clause (a) and goods are to be transported by a transporter, the registered person must provide details relating to such transporter on the common portal in Part B of form GST INS-01. The e-way bill should then be generated by the transporter based on the information provided by the registered person in Part A of GST INS-01.

Note: A registered person or a transporter, at their discretion, may generate and carry an e-way bill even if the consignment value does not exceed INR 50,000. Furthermore, if movement is caused by an unregistered person using their own/hired conveyance or through a transporter, the unregistered person or such transporter may, at their discretion, generate an e-way bill on the common portal in FORM GST INS-01.

II. Upon the generation of an e-way bill on the common portal, a unique EBN (e-way bill number) will be made available to the supplier, the transporter, and the recipient.

III. A transporter moving goods from one conveyance to another during transit must, before the transfer and any subsequent movement, generate a new e-way bill in FORM GST INS-01 on the common portal, furnishing the updated mode of transport.

IV. For multiple consignments transported in a single conveyance, the transporter must electronically indicate the serial numbers of the e-way bills generated for each consignment on the common portal. Additionally, a consolidated e-way bill must be generated in FORM GST INS-02 by the transporter before moving the goods.

Note: If a consignor has not generated FORM GST INS-01 as per the rules and the value of the goods transported in the conveyance exceeds INR 50,000, the transporter must generate FORM GST INS-01 based on the bill of supply, invoice, or delivery challan, and then generate the consolidated e-way bill on the common portal in FORM GST INS-02 before moving goods.

V. The details provided in Part A of GST INS-01 will be made available on the common portal to a registered supplier, who can then utilize it for furnishing details in GSTR-1.

Note: If information is furnished by an unregistered supplier in GST INS-01, the unregistered person will be informed electronically, provided their email or mobile number is available.

VI. If an e-way bill is generated under this rule but the goods are not transported, or are not transported according to the details provided in the e-way bill, the e-way bill can be cancelled electronically on the common portal, directly or via a Facilitation Centre notified by the Commissioner, within 24 hours of its generation.

Note: An e-way bill cannot be cancelled if it has already been verified in transit as per the laid down rules.

VII. An e-way bill or a consolidated e-way bill generated under this rule will be valid for the period mentioned in column (3) of the relevant table from the specific date, corresponding to the distance the goods are transported as outlined in column (2).

Essential Documents and Devices for Conveyance In-Charge

I. The person in charge of a conveyance must carry: i) An invoice, a delivery challan, or a bill of supply; and ii) A copy of the e-way bill or its e-way bill number, either physically or mapped to an RFID (Radio Frequency Identification Device) embedded in the conveyance.

II. A registered person can obtain an Invoice Reference Number (IRN) from the common portal by uploading the tax invoice (FORM GST INV-1) issued by them. This IRN can then be presented for verification by a proper officer in lieu of the physical tax invoice and is valid for 30 days from the date of upload.

III. If a registered person uploads an invoice under sub-rule (1), the common portal will auto-populate the information contained in Part A of FORM GST INS-01 based on the details provided in FORM GST INV-1.

IV. The Commissioner may, via notification, require a specific class of transporters to obtain a unique RFID device, embed it in their conveyance, and map the e-way bill to such RFID before moving the goods.

V. Where circumstances necessitate, the Commissioner may, by notification, require the person in charge of the conveyance to carry specific documents instead of the e-way bill, such as: i.) A tax invoice, bill of entry, or bill of supply; or ii.) A delivery challan, when goods are moved for reasons other than supply.

Verification Procedures for Documents and Conveyances

I. The Commissioner or an officer empowered by the Commissioner may authorize a proper officer to intercept any conveyance for the purpose of verifying the e-way bill or its number (physical or electronic) for all intra-State and inter-State movement of goods.

II. The Commissioner will ensure that RFID readers are installed at locations where goods movement verification is required. Verification of vehicle movement should then be performed via these RFID readers where the e-way bill is mapped with the RFID.

III. Physical verification of conveyances will be performed by proper officers authorized by the Commissioner or other empowered officers.

Note: Upon receiving explicit information regarding tax evasion, physical verification of a conveyance may also be executed by an officer after obtaining the necessary approval from the Commissioner or authorized officers.

Inspection and Verification of Goods

I. A summary report concerning each inspection of goods in transit must be recorded online by a proper officer in Part A of FORM GST INS – 03 within 24 hours of the inspection. A final report in Part B of FORM GST INS – 03 must then be recorded within a period of three days of such inspection.

II. If a physical verification of the goods being transported on a conveyance is conducted during transit at a particular place within a State or in another State, there will not be any further physical verification again in that State, unless specific information with respect to tax evasion is subsequently received.

Option to Report Vehicle Detention

If any vehicle is intercepted and held for more than thirty minutes, the transporter has the option to upload this information onto the common portal using FORM GST INS-04.