Proposed amendments in GST in Budget 2021

1 comments Wednesday, February 3, 2021

Amendment in section 7-Scope of supply:

Section of 7 of the CGST Act, 2017 deals with the scope of supply. It defines supply in an inclusive manner. It is proposed to add clause (aa) in sub-section 1 of section 7 which runs as under:

“(aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration.

 

Explanation.––For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of 77 activities or transactions inter se shall be deemed to take place from one such person to another;”

 

The above amendment seem to have been carried out to nulify the landmark judgement of Hon’ble Supreme Court  in the case of  CalcuttaClub Limited (2017) 5 SCC 356 wherein the court held that service tax need not be charged by clubs for services to its members. The verdict was seen as also being applicable in GST as GST has replaced service tax.

 

Now after this amendment such transaction and activities will be covered by scope of supply.

It is pertinent to mention here that along with this amendment simultaneously para 7 of Schedule II to CGST Act is also proposed to be omitted, which provided the similar provisions which was deemed to be as supply even without consideration. Now after the amendment the said activites are itself included in the definition of scope of supply with a specific explanation overriding any other law or judgement contrary to it.

 

Amendment in section 16-Additional condition for claiming ITC:

 

 Section 16 of the CGST Act deals with the conditions for claiming input tax credit by any person. An additional condition is proposed to be added in section 16 which mandates that the invoice or debit note on the basis of which credit is taken must be uploaded in GSTR-1 by the supplier and the same should also have been communicated to the recipient in terms of procedure laid down in section 37. The proposed amendment is as follows:

 

“(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;”.

 

It is pertinent to mention here that the proposed amendment seem to have been added to provide a legal backing for Rule 36(4) of CGST Rules, 2017, which allows only 5% ITC in excess of eligible ITC available in respect of invoices or debit notes the details of which have been uploaded by the suppliers in GSTR-1 u/s 37(1) of CGST Act, if that be the case can it be said Rule 36(4) till date is ultra vires of the Act, is a question which could be subject to judicial scrutiny.

 

 Amendment in section 35 and 44-No requirement of GST audit:

 

 Section 35(5) which mandated for audit of annual accounts by a chartered accountant or cost accountant if turnover exceeded prescribed limit, is proposed to be omitted. Now after the amendment there will be no need of GST audit u/s 35(5). Section 44 simultaneously has also been proposed to be amended to provide that every registered person shall file an annual return  which may include a self certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed.

 

The time period earlier prescribed for filing annual return as 31st December every year now is also proposed to be amended within such time as may be prescribed.

 

Amendment in section 50-Interest only on tax paid through cash ledger:

 

 Section 50 is proposed to be amended to provide that interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in  accordance with section 39 of the Act, i.e. after the due date of GSTR-3B,   shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger.

 

In nut shel the proposed amendment provide for levy on interest only on that part of tax  which is paid from the cash ledger, if the return GSTR-3B is filed late.

 

 This amendment is proposed wef 01.07.2017. Similar amendment was also carried out in the Finance Act, 2019 however it was made applicable wef 01.09.2020. Now, the same is done with retrospective effect.

 

Amendment in section 75-change in definition of self assessed tax:

 

Section 75(12) which provides for the recovery of self assessed tax which remains unpaid as per GSTR-3b i.e. return filed u/s 39, is proposed to be amended to add an explanation which defines the word self assessment tax.

 

The proposed amendment defines self assessment tax  as including the tax payable in respect of details of outward supplies furnished u/s 37 but not included in a return furnished u/s 39.

 

 In other words the tax liability declared in  GSTR-1 but not declared in  GSTR-3b will be considered as self assessed tax u/s 75(12) and recovery of such tax can be initiated u/s 79 of CGST Act, 2017. It is pertinent to mention here that section 79 provides various modes of recovery of tax including attachment of immovable property etc.

Amendment in section 129, 130 and 74:  

Section 129 of CGST Act which deals with detention, seizure and release of goods and conveyance in transit  has been amended to a large extent.

 

 Unamended Section 129(1) provides that goods in  transit detained on the ground of their transportation in contravention of the provisions of the Act or rules shall be released either

 

(a)       on 100% payment of tax and penalty equal to 100% of tax payable in case of taxable goods and 2% of value of goods or 25000 which ever is less where the owner comes forward and

 

(b)       on deposit of applicable tax along with 50% of value of goods and in case of exempted goods in such case on deposit of 5% of value of exempted goods or 25000 whichever is less where the owner does not come forward

 

It is proposed to amend the above Clauses (a) and (b) of section 129(1) to provide that goods shall be released

 

(a) on penalty of 200% of tax payable on the goods in question, where owner comes forward

 

and

 

(b)on payment of penalty @ 50% of the value of goods or 200% of tax payable whichever is higher, where the owner does not come forward.

The word applicable tax has been omitted in the proposed amendment in both the above clauses. However the proposed  amendment would not result in any relief from the amount payable under section 129 as with deltetion of the words applicable tax, penalty amount has been doubled.

 The unamended provisions give an impression of double taxation because not only applicable tax is supposed to be paid u/s 129 but also is required to be paid in the returns filed u/s 39, since the ITC of tax paid u/s 129 is denied u/s 17(5) to the recipient, so in order to give ITC of the applicable tax on goods in question one has to pay applicable tax again u/s 39 in the return filed by such person.

After the amendment only penalty is payable u/s 129(1)(a) or (b), which can be further contested in appeal.

Amendment in section 74:

 Consequent to the amendment in section 129(1)(a) and (b) a simultaneous amendment is made in section 74 so as to make seizure and confiscation of goods and conveyances in transit a separate proceeding from recovery of tax.

No provisional release of goods detained u/s 129 on bond:

Sub-section 2 of section 129 is proposed to be omitted which provides for application of section 67(6) to the goods detained u/s 129. Section 67(6) provides for provisional release of goods seized upon execution of bond and furnishing of a security  or on payment of tax, interest and penalty payable.  Now after the amendment there will no provisional release of goods u/s 129.

Proceedings u/s 129 to be completed within 14 days:

Section 129(3)  is also proposed to be amended so as to provide that notice after detention or seizure will be issued within 7 days specifying the penalty payable and thereafter  an order shall be passed within a period of seven days from the date of service of notice for payment of penalty under clasue (a) or clause (b) of section 129(1).

Sub-section 6 of section 129 is also proposed to be amended to provide that if a person  transporting the goods or owner of the goods  fails to pay the amount of penalty u/s 129(1) within fifteen  days from the date of receipt of order then goods or conveyance so detained or seized shall be liable to be sold or disposed off in the manner and within the time prescribed.

The interesting thing in the amendment is that both goods and vehicle can be sold or disposed off to realize the penalty amount in case of non payment, However an option is proposed to be given to the transporter to get his conveyance released on payment of Rs. 1 Lakh or penalty u/s 129(3) which ever is less.

So the proposed amendment in section 129(6) itself provide for a procedure for realization of penalty instead of initiating  proceedings u/s 130

 Amendment in section 130:

 Consequent to amendment in section 129, amendment in second proviso to section 130(2)  is also made to provide for that the aggregate amount of fine in lieu of confiscation and penalty shall not be less than 100% of the tax payable on such goods, which in the pre-amended law is the amount equal to the penalty payable u/s 129(1).

Sub-section 3 of section 130 is also proposed to be omitted which makes the owner of the goods liable for payment of tax, penalty or other charges payable in respect of goods or conveyance confiscated. That means after the omission of sub section 3 only fine in lieu of confiscation and penalty which shall not be less than 100% of the tax payable, will be payable u/s 130 where the goods are confiscated.

Amendment in section 107-25% pre-deposit in appeal against  order u/s 129 :

 Section 107(6) is amended to provide that appeal against order u/s 129(3) will be filed only after a sum equal to 25% of the penalty has been paid by the appellant.

Amendment in section 83:

 Section 83 is amended so as to provide that that whenever proceedings under chapter XII(Assessments) Chapter XIV(Inspection , search and seizure) or Chapter XV(demand and recovery) are initiated the Commissioner may for the purpose of protecting interest of the Govt Revenue may provisionaly attach any propery belonging to any taxable person or any person specified u/s 122(1A). In the unamended section attachment could be done only during the pendency of proceedings u/s 62,64,67,73 or 74.

Amendment in section 16 of IGST Act-

There is a proposal for a major amendment in section 16 of IGST Act. Section 16(3) of IGST Act today provides that Export of goods or services can be done in two ways

One With payment of IGST where refund is automatically  given by customs

Two without payment of IGST where refund has to be applied of unutilized Input tax credit

Now the proposed amendment provides that export of goods or services will be done only without payment of IGST under a bond or LUT.

It is further provided in the proposed amendment that in case of non-realisation of sale proceeds within the time limit as specified under The Foreign exchange Management Act, 1999, the refund obtained would be deposited within 30 days along with interest.

It is pertinent to mention here that recently a similar Rule 96B was introduced vide Notification No 16/2020 Dated 23.03.2020. It seems this proposed amendment u/s 16 is also introduced to give a legal backing to the Rule 96B. It is strange that rules are introduced before the relevant amendment under the Act.

Under the proposed amendment it is further provided that export of goods or services with payment of IGST will be made only by those class of persons or in case of those class of goods, which are notified by the Government on the recommendation of the GST Council.

 

All the proposed amendments in the GST will be applicable from such date as the Central Government may by notification appoint.

 

 

 

 

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ONE TIME SETTLEMENT SCHEME UNDER PUNJAB VAT ACT AND CST ACT

0 comments Monday, January 25, 2021

With the advent of GST and dawn of old indirect tax regime in the form of  VAT, service tax and central excise etc, the State and Central Governments are looking forward to bring an end to the litigation in the older regime and in consequence thereof we are witnessing lot of dispute resolution schemes introduced by Central and State Governments.

The Punjab Government, Department of Excise and Taxation has also introduced a one time settlement scheme for outstanding dues under Punjab VAT Act , 2005 and CST Act, 1956(hereinafter called as relevant Acts) on 18.01.2021 and implemented wef 15.01.2021. The scheme aims at giving relief to the small taxpayers in the form of waiver from interest penalties and partial waiver from tax already due in the assessments. The various features of the scheme are as under:

1.   Applicability: The scheme is applicable for all the outstanding dues created in assessments completed till 31st December 2020 under the Punjab VAT Act, 2005 and CST Act, 1956. One has to apply under the scheme by 30th April 2021.

 

2.   Who can apply: Any persons whose assessment has been made under the relevant Act till 31st December 2020 is eligible to apply under the scheme. Scheme is not applicable for those persons on whom penalty or other demand has been imposed/raised without assessment, for example scheme is not applicable for road side penalty u/s 51 of the Punjab VAT Act, 2005.

 

3.   Procedure:

(a) A person seeking to apply under the scheme has to file an application in form OTS-1.

 

(b) Additional statutory forms  for example C, F, H , I etc  if any, which could not be produced at the time of assessment  can also be submitted along with application for further reduction in additional demand.

 

(c)Along with the application proof of payment of tax determined under the scheme after waiver has also to be submitted.

 

(d) Once application is submitted an acknowledgement in form OTS-2 shall be issued.

 

(e) If all the tax determined and deposited is found to be correct along with other particulars required to be mentioned in the application, an order of settlement in form OTS-4 shall be passed or

 

(f) If there is any deficiency the a notice in OTS-3 will be issued to complete the same within 7 days.

 

4.   Appeal cases: The scheme is also applicable for appeal cases i.e cases where appeal is pending before any of the appellate authorities i.e the Deputy Excise and taxation commissioner (Appeals) or Tribunal or High Court or Supreme court. However in appeal cases a declaration shall be submitted that once the dues are settled under the scheme , the applicant shall withdraw such appeal within a period of seven days from the date of communication of order of settlement and the proof thereof shall be submitted to the concerned officer.

 

5.   Extent of waiver: The scheme provides for waiver of 100% of interest and penalty upto an additional demand of Rs. 500000/- and additional 90% waiver from tax in case where additional demand is upto Rs. 100000/-. There is no relief to taxpayers whose additional demand is more than Rs. 5 lakh. It is pertinent to mention here that additional demand is ussualy the sum total of tax interest and penalty imposed in the assessment order.     

 

The slab of additional demand has to be calculated (so far CST Act is concerned ) after reduction on account of additional statutory declaration forms.

 

It can be explained with the help of an example as follows:

Additonal demand as per assessment order

150000

Tax:        90000

 Interest: 50000

Penalty:   10000

 

Reduction on account of

additional forms:                                  

50000

 

Balance Additional demand

            100000

 

 

 

Now in above example although additional demand as per assessment order is 150000/- but after submission of additional statutory forms if the reduction in tax and interest comes to Rs. 50000/- then the slab for giving waiver under the scheme would be Rs. 100000/- and thus there will be waiver from tax element  left after reduction  @ 90% apart from 100% waiver from interest and penalty.

 

In case of appeal where 25% of additional demand is already deposited which was a pre-requisite for entertaining an appeal on merits u/s 62(5) of Punjab VAT Act, 2005, the waiver will be such 25% of additional demand or the amount of waiver as per scheme as discussed above whichever is higher.

 

Certain terms and conditions:

 

(a)Application in form OTS-1 has to be filed saperately for every assessment year and accordingly order of settlement shall be issued under the relevant Act.

 

(b) No refund shall be given in respect of 25% deposited of additional demand in appeal cases.

 

(c) In appeal casee appeal has to be withdrawn within 7 days from the communication of order of settlement otherwise the order stands cancelled.

 

(d) An order of settlement shall not be reopened in any proceedings by way of review or revision or any other proceedings under the relevant Act.

 

(e) Any determined amount paid undrer the scheme shall not be refundable.

 

(f) No appeals against the settlement order shall lie before any of the appellate authorities

 

(g) Any tax shown as paid in the assessment order if is later found to be actually unpaid, then the same shall be recoverable along with applicable interest and penalty, if any, under the relevant provisions of the Act, notwithstanding with the scheme.

 

Table of waiver

Sr. No

Slab of outstanding dues (Note: In case of CST Act, 1956, it is after reduction on account of submission of additional statutory declaration forms, if any)

Waiver on Tax

Waiver on interest amount levied

Waiver on penalty amount

1.

1-10,000

90%

100%

100%

2.

10,001-50,000

90%

100%

100%

3.

50,001-100,000

90%

100%

100%

4.

100,001-5,00,000

0%

100%

100%

5.

5,00,001-10,00,000

0%

0%

0%

6.

10,00,001 and above

0%

0%

0%

 

The Notification of scheme can be downloaded herebelow:

Punjab OTS Scheme

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AADHAR Authentication process under GST Registration

5 comments Saturday, August 22, 2020
  1. Aadhaar Authenticatiobn process has been introduced, for the persons applying for GST registration as Normal Taxpayer/ Composition/ Casual Taxable Person/ Input Service Distributor (ISD)/ SEZ Developer/ SEZ Unit etc, in Form GST REG 01 (refer Notification No 62/2020-CT dt 20.08.2020 ).

 

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Legality of withholding refunds of exporters as per circular No. 131/1/2020-GST

3 comments Saturday, May 23, 2020
Exports under GST are considered as zero rated i.e. no tax is payable on export of goods or services. A person making zero rated supply is eligible under GST to claim for refund of unutilized input tax credit. The refund can be claimed by an exporter in two ways as stated in section 16 of IGST act, 2017:
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Retrospective amendment in section 140 of CGST Act-An overview

3 comments Wednesday, May 20, 2020
Whenever a new tax regime replaces an old tax regime there are numerous changes which a taxpayer faces and there are  lot of legal challenges in the transition from old regime to new regime. For the smooth transition of the new tax regime it is quite common to introduce the transitional provisions under the new tax law.
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RECENT LEGAL ISSUES IN GST REFUNDS

6 comments Saturday, May 16, 2020

Refunds are the important part of any tax legislation. Refund is a drawback of the excess taxes paid to the Government subject to the conditions laid down in any law. Article 265 of our constitution provides a base behind legislation of refund provisions under any tax law, which provides that no tax shall be levied or collected except with the authority of law.
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Power to extend due date of TRAN-1 AND TRAN-2 in certain cases enhanced to 31.03.2020 and 30.04.2020

6 comments Thursday, January 2, 2020
The Central Government has enhanced the date upto which the submission of  Tran-1 and Tran-2 may be allowed to be filed to 31.03.2020 and 30.04.2020 respectively. Earlier this date was 31.12.2019 for Tran-1 and 31.01.2020 for Tran-2 form. This has been done by amendment in CGST Rules, vide Notification No. 2/2020 Central Tax.  
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Certain amendments in CGST Act, 2017 made vide Finance Act, 2019 notified wef 01.01.2020.

7 comments

Central Government has implemented certain provisions of Finance Act, 2019 wef 01.01.2020. It is pertinent to mention here that clauses  92 to 112 and section 114 of the finance Act, 2019 which related to amendment in the CGST Act, 2017 are to come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. Section 103 of the Finance Act, 2019 has already been notified wef 01.09.2019 which related to the amendment in section 54 providing of Sub-section 8A which allowed the Government to disburse the refund of State tax in the manner as may be prescribed.
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Blocking of input tax credit-New Rule 86A introduced under GST.

7 comments Friday, December 27, 2019
Rule 86A in the CGST Rules vide notification No 75/2019 has been introduced w.e.f. 26.12.2019 to empower the revenue to impose additional condition/restriction on use of amount of input tax credit available in the electronic credit ledger. This rule has given drastic powers to the Department to restrict the credit of any person in certain cases where there is reason to believe that ITC is availed fraudulently or is ineligible.  
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ITC not reflected in GSTR-2A to be allowed only to the extent of 20%-Due date of Tran-1 and Tran-2 extended in some cases

11 comments Thursday, October 10, 2019
The CGST Rules have been amended vide notification no 49/2019 CGST dated 09.10.2019. Two of the most important amendments are highlighted herebelow:   
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Compulsory Payment of tax before filing of GSTR-3B-Inconsistent working of GST portal

3 comments Saturday, May 11, 2019
Section 146 of the CGST Act, 2017 provides that the Government may notify the common elecronic portal for facilitating the registration, payment of taxes, furnishing of  returns and carrying out other purposes under the said Act. In exercise of the powers u/s 146  common e-portal (gst.gov.in) and eway bill portal have been notified and are in operation. It is pertinent to mention here that the said e-portals are for facilitating the law laid down under the GST laws and such e-portals cannot override the provisions of law.

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Proper officer can't invoke the bank guarantee till assessee exhausted statutory remedy

3 comments Wednesday, November 28, 2018
Where Competent Authority had detained goods of assessee under transport and demanded tax as well as penalty and assessee furnished bank guarantee for tax and penalty imposed and had goods released, Competent Authority was restrained from invoking bank guarantee till assessee exhausted statutory remedy
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No Detention of goods on the issue of misclassification or undervaluation under GST

34 comments Sunday, June 10, 2018
The Kerala High Court in a very important judgement namely Sameer Mat Industries vs the State of Kerala  has held that Issue of misclassification and under valuation of goods has to be gone into by respective Assessing Officers and not by detaining officer
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GSTN has enabled online filing of letter of Undertaking for exports

7 comments Saturday, February 24, 2018

GSTN enabled online filing of LuT. Instructions for filing LUT online on GST Portal are given below:-

1.     Go to User Services and Select the Tab “Furnishing Letter of Undertaking”

2.     Select the Financial Year for which you want to furnish the LUT

3.     If you have already furnished LUT Offline, for previous period, please attach the same here and continue to file your application

4.     If you're filing LUT, please read and select all the three checkboxes for accepting the conditions prescribed in Letter of Undertaking

5.     Enter the details of two independent witnesses

6.     Primary Authorized signatory or other Authorized signatory can sign the Application Form

7.     Once signed and filed, Form cannot be edited.

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Eway bills officially suspended as notification issued.

5 comments Saturday, February 3, 2018

Government of India has recisended the notification No 74/2017 of CGST which made eway bill compulsory under rule 138 to 138D of CGST Rules. For this purpose notification No 11/2018 CGST has been issued.

The implications of this notification is that eway bill is no more compulsory as Rules 138 to 138D have been made inoperative as they were before the issuance of notification No 74/2017 CGST.

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

New Delhi: 02.02.2018

Notification No. 11/2018 – Central Tax
G.S.R. 141(E) - In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, hereby rescinds, except as respects things done or omitted to be done before such rescission, the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 74/2017 –Central Tax dated the 29th December, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1601(E), dated the 29th December,
2017.

[F. No. 349/58/2017-GST(Pt.)]

Dr. SREEPARVATHY S.L., Under Secy.

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Compulsory generation of e-way bill deferred-GOI tweets

1 comments Thursday, February 1, 2018
The official handle of GST of Government of India has tweeted that the trial phase of generation of eway bill both for intra-state and inter-state will continue and the date from which it will be made compulsory will be notified shortly.

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No e-way bill required till 01.04.2018 for intra-state supplies of goods in Punjab

3 comments Tuesday, January 30, 2018
Punjab Government has notified under Rule 138(14)(d) of Punjab GST Rules, 2017 that e-way bill will not be required to be generated for a period of two months from 1st Feburary, 2018 for intra-state supply of goods provided such goods do not cross the State boundry during the transit. However, a person may voluntarily generate e-way bill for intra-state supplies.
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GST Rate on old and used motor vehicles reduced-latest notifications

2 comments Monday, January 29, 2018
Government has issued the Notification No. 8/2018 Central Tax Rate read with state Tax Notification, whereby it has reduced the Rate of GST on old and used vehicle as follows:

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E-way bill under GST - an overview

3 comments Sunday, January 28, 2018
E-Way Bill is knocking  at the door as the date of its implementation has been notified 01.02.2018. This article focuses certain main points in the eway bill mechanism.


What is e-way bill: Section 68 of the CGST Act, 2017 empowers Government to require any person in charge of a conveyance carrying any consignment of goods of value exceeding the prescribed amount to carry with him prescribed documents. In pursuance of provisions of section 68, Rules 138 to 138D have been legislated prescribing Eway Bill in form GST EWB 01 along with other documents which a person incharge of conveyance carrying goods of value exceeding Rs. 50000/-, is required to carry during the movement of goods.

Who is required to generate Eway bill and when it is required: Eway bill is required to be generated by the following persons:

1. every registered person who causes the movement of goods of consignment value exceeding Rs. 50000/-  

(i) in relation to a supply; or

(ii) for reasons other than supply; or 

(iii) due to inward supply from an unregistered person,

It is pertinent to mention here that Eway Bill has to be generated before the movement of goods start and is required only by a registered person, and not by an unregistered person, however, unregistered person may voluntarily generate eway bill. Eway bill may be generated voluntarily even where the consignment value does not exceed Rs. 50000/-. 

2. where goods are sent by a principal located in one State to a job worker located in any other State, the e-way bill shall be generated by the principal irrespective of the value of the consignment.It is to be noted that limit of Rs. 50000/- in case of intra-state movement of goods for job work purposes will continue to apply.

3. where handicraft goods are transported from one State to another by a person who has been exempted from the requirement of obtaining registration under clauses (i) and (ii) of section 24, the e-way bill shall be generated by the said person irrespective of the value of the consignment.

Consignment value of Rs. 50000/- as stated above has to be determined in accordance with Section 15 of CGST Act, which deals with valuation of supply and the consignment value of Rs. 50000/- shall be counted by including not only the value of goods but also the GST and Cess if any charged on it.

Generation of E-way bill: Eway bill has two parts,Part-A and Part-B. Part-A includes details of invoice/challan/credit note and the details of receipient and transporter, whereas Part-B only has information with regard to vehicle no. when you have prepared invoice relating to your business transaction, but don’t have the transportation details. You can enter invoice details in Part-A of eway bill and keep it ready for transportation, once the transportation is ready.

It is worth mentioning here that mere filing Part-A is not valid for movement of goods on road, except for the movement of goods from the place of the supplier or the receipient as the case may be to the place of transporter where the distance between the two is less than 10 KMs.

Who is to file Part-A: Part-A has to be filed mandatorily by the registered person who causes the movement of goods whether as consignor or as consignee or as recipient, whether the goods are transported in his own conveyance or by railways or by air or by vessel.

Part-A can also be filed by the transporter and it is mandatory for the transporter to file Part-A, if the supplier or receipient fails to do so and the consignment value exceed Rs. 50000/-

For example if A transporter is carrying 5 different consignments of five different suppliers and receipients in one vehicle the value of each consignment is say Rs. 20000/-, in such case the total value of consignments carried in the vehicle comes to Rs. 100000/- In such case although it was not mandatory for supplier of receipient of each consignment  to generate eway bill but in such case it is mandatory for the transporter to generate eway bill by filing both Part-A and Part-B.

Part-A can also be filed by an unregistered person voluntarily, however, it has been stated in Explanation 2 of Rule 138(3) that if goods are supplied by an unregistered person to a registered recipient and recipient is known at the time of commencement of movement of goods, then the movement shall be said to be caused by such registered receipient.

In other words meaning thereby if supply is by an unregistered person to a registered person, then it is mandatory for the registered receipient to generate eway bill, ofcource if the consignment value exceed Rs. 50000/-.


Where the goods to be transported are supplied through an e-commerce operator (for example: amazon, flipkart etc), Part-A may also be furnished by such e-commerce operator.

Who is to file Part-B:  As stated above also, Part B only contains information with regard to vehicle number.

 In case movement is caused by own conveyance or a hired conveyance, it is the person causing the movement has to file Part-B

In case of movement by rail or by air or vessel Part -B has to be mandatorily filed by the registered person and along with it the serial number and date of Railway Receipt or the Air consignment note or Bill of Lading are also required to mentioned in the Part-A.

If the goods are handed over to a transporter for transportation by Road Part-B will be filed by the transporter.

The unique feature of Eway bill is that Part B of eway bill can be updated in the following circumstances:

1.   where the goods are transferred from one conveyance to another, in such case Part-B will be mandatorily updated with new vehicle number before such transfer and further movement of goods.

For example: If the vehicle breaks down when the goods are being carried with EWB, then the transporter can cause to repair the vehicle and continue the journey. If he is going to change the vehicle, then he has to enter the new vehicle details for that EWB on the web-site using ‘Update vehicle number’ option and continue the journey with new vehicle.

Part-B can be updated as many times as it Is required but should be done within validity period. It has also been further provided in 2nd proviso to Rule 138(9) that the unique number generated by filing Part-A shall be valid for 72 hours for updation of Part-B.

2.   There may be instances that transporter assign the consignment to other transporter after booking from the supplier or recipient. In such situation Rule 138(5A) provides that the transporter may assign the e-way bill number to another registered or enrolled transporter for updating the information in Part-B. It is worth noting here that whenever Part-A is filed by the registered person and he has to mention the transporter’s GSTIN or enrollment id in Part-A, if the goods are handed over to transporter.

However, once the details of the conveyance are updated by the transporter in part-B then supplier or recipient who had furnished Part-A will not be allowed to assign the eway bill number to another transporter.

Validity of E-way Bill: E-way Bill’s validity has been prescribed under Rule 138 in terms of distance involved in the movement of goods. It as follows:

S.No.
Distance
Validity Period
1
Upto 100 km
1 day
2
For every 100 km. or part thereof thereafter
One additional day:

It should be noted here that the period of validity shall be counted from the time at which the e-way bill has been generated and each day shall be counted as twenty four hours.

Rule 138(10) further provides that where, under circumstances of an exceptional nature, the goods cannot be transported within the validity period of the e-way bill, the transporter may generate another e-way bill after updating the details in Part B of FORM GST EWB-01.

Cancellation of E-way Bill: Rule 138(9) provides for cancellation of eway bill within 24 hours of generation of the e-way bill, which can be done in the following circumstances:

-Where goods are  not transported at all or

-are not transported as per the details furnished in the e-way bill. 

However,  an e-way bill cannot be cancelled if it has been verified in transit in accordance with the provisions of rule 138B.

Consolidated E-way bill: Where multiple consignments are intended to be transported in one conveyance, the transporter may indicate the serial number of e-way bills generated in respect of each such consignment electronically on the common portal and a consolidated e-way bill in FORM GST EWB-02 maybe generated by him on the said common portal prior to the movement of goods.

Acceptence and rejection of e-way bills: The eway bills generated shall be made available to a registered supplier if generated by recipient or transporter and vice versa to the registered recipient if generated by supplier or transporter. The same has to be accepted or rejected by the supplier or recipient as the case may be, however if nothing is done within seventy two hours then it shall be deemed that he has accepted the said details.

When no e-way bill is required:Rule 138(14) provides with a non-abstante clause the circumstances where no eway bill is required, these are as follows:

(a) where the goods being transported are specified in Annexure;

(b) where the goods are being transported by a non-motorised conveyance;

(c) where the goods are being transported from the port, airport, air cargo complex and land customs station to an inland container depot or a container freight station for clearance by Customs;

(d) in respect of movement of goods within such areas as are notified under clause (d) of sub-rule (14) of rule 138 of the Goods and Services Tax Rules of the concerned State;

(e) where the goods, other than de-oiled cake, being transported are specified in the Schedule appended to notification No. 2/2017- Central tax (Rate) dated the 28th June, as amended from time to time;(the schedule is for tax free or nil rated goods)

(f) where the goods being transported are alcoholic liquor for human consumption, petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas or aviation turbine fuel; and

(g) where the goods being transported are treated as no supply under Schedule III of the Act.

Documents and devices to be carried with a conveyance: Rule 138A prescribes following documents which a person incharge of a conveyance must carry:

(a) the invoice or bill of supply or delivery challan, as the case may be; and

(b) a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency Identification Device embedded on to the conveyance in such manner as may be notified by the Commissioner.(there is no such notification till the date when this article is written).

(c) Rule 138A(2) also provides facility of generation of Invoice reference number by uploading on the e-way bill portal the tax invoice in form GST INV-1, which will be valid for thirty days from the date of uploading and in which case no physical invoice is required to be carried along with the conveyance.

Verification of documents and conveyance: Rule 138B and Rule 138C empowers the proper officer (who is duly authorized to do so either by Commissioner or an officer empowered in this regard)to intercept any conveyance to verify the e-way bill or number thereof.

Physical verification of conveyance can be done only by the proper officer who is duly athorised to do so, however physical verification of conveyance can also be done by any officer other than proper officer after obtaining necessary approval, if there is receipt of specific information on evasion of tax.

Rule 138C also mandates the proper officer to record online summary inspection report of every inspection of goods in transit in Part-A of form GST EWB 03 and a final report within three days in Part-B of the said form.

Once a physical verification of a conveyance is done in a state or in any other State then further physical verification can be done unless a specific information with regard to evasion of tax is made available subsequently.

Certain important FAQs

Question: How to enter multiple modes of transportation, i.e., road, rail, ship, air for the same e-way bill?

Answer: One e-way bill can go through multiple modes of transportation before reaching the destination. As per the mode of transportation, the EWB can be updated with new mode of transportation by using ‘Update Vehicle Number’.
Let us assume the goods are moving from Cochin to Chandigarh through road, ship, air and road again. First, the taxpayer generates the EWB by entering first stage of movement (by road) from his place to ship yard and enters the vehicle number. Next, he will submit the goods to ship yard and update the mode of transportation as Ship and transport document number on the e-way bill system. Next, after reaching Mumbai, the taxpayer or concerned transporter updates movement as road from ship to airport with vehicle number. Next the taxpayer or transporter updates, using ‘update vehicle number’ option, the Airway Bill number. Again after reaching Delhi, he updates movement through road with vehicle number. This way, the e-way bill will be updated with multiple mode of transportation.

Question: How to handle the goods which moves through multiple transshipment places?

Answer: Some of the consignments move from one place to another place till they reach their destinations. Under this circumstance, each time the consignment moves from one place to another, the transporter needs to enter the vehicle details using ‘Update Vehicle Number’ option, when he starts moving the goods from that place or the transporter can also generate ‘Consolidated EWB’ with the EWB of that consignment with other EWBs and move to the next place. This has to be done till the consignment reaches destination. But it should be within the validity period of EWB.

Question: How to generate e-way bill for multiple invoices belonging to same consignor and consignee?

Answer: If multiple invoices are issued by the supplier to recipient, that is, for movement of goods of more than one invoice of same consignor and consignee, multiple EWBs have to be generated. That is, for each invoice, one EWB has to be generated, irrespective of same or different consignors or consignees are involved. Multiple invoices cannot be clubbed to generate one EWB. However after generating all these EWBs, one Consolidated EWB can be prepared for transportation purpose, if they are going in one vehicle.

Question:  How to enter invoice having different states for “Bill to” and “Ship to” places and what will be the tax rates?

Answer: If the addresses involved in 'Bill to' and 'Ship to' in a invoice/bill belongs to one legal name/taxpayer as per GSTIN within the state, then one e-way bill has to be generated. That is, if the 'Bill to' is principal place of business and 'Ship to' is additional place of business of the GSTIN or vice versa in a invoice/bill, then one e-way bill is sufficient for the movement of goods.
If the addresses involved in 'Bill to' and 'Ship to' in a invoice/bill belongs to different legal names/taxpayers, then two e-way bills have to be generated. One e-way bill for first invoice, second e-way bill is from 'Bill to' party to 'Ship to' party based on the invoice/bill of the 'Bill to' party. This is required to complete the cycle of transactions and taxes will change for inter-state transactions.

For example, A has issued invoice to B as 'Bill to' with C as 'Ship to'. Legally, both B and C are different taxpayers. Now, A will generate one e-way bill and B will issue invoice and generate one more e-way bill. As goods are moving from A to C directly, the transporter will produce both the invoices and e-way bills to show the shortcut movement of goods.

Question: How to generate e-way bill, if the goods of one invoice is being moved in multiple vehicles simultaneously?

Answer: Where the goods are being transported in a semi knocked down or completely knocked down condition the EWB shall be generated for each of such vehicles based on the delivery challans issued for that portion of the consignment and;

(a) the supplier shall issue the complete invoice before dispatch of the first consignment;

(b) the supplier shall issue a delivery challan for each of the subsequent consignments, giving reference of the invoice;

(c) each consignment shall be accompanied by copies of the corresponding delivery challan along with a duly certified copy of the invoice; and

(d) the original copy of the invoice shall be sent along with the last consignment
Please note that multiple EWBs have to generate under this circumstance. That is, the EWB has to be generated for each consignment based on the delivery challan details along with the corresponding vehicle number.

“semi knocked-down” is used to describe a product that is exported in a set of parts that have been partly put together, and which are then all put together for sale to customers:

For example: Buses will be imported in semi knocked-down form.

"completely knocked-down" is  used to describe a product that s sold or transported in a set of parts, which must be put together before the product can be used by the customer:

For example: Motorcycles can be transported in completely knocked-down kits,  hich reduced transport costs because less space was needed to transport them.






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