Analysis on E-way Bill under GST: Applicability | Non EWB Goods etc.
Analysis on E-way Bill: Section 68 require that the transporter produce information required by the authorities and Rule 138 prescribes the kind of information that authorities are barred from rejecting. That makes e-way bill remarkable, attracting a lot of doubt and even misinformation. This note provides some information to clear the air and make way for better understanding on the Procedural and Practical Aspects of E-Way Bill under GST that provide a walk-through the steps on e-way bills.
EWB is not required for all transactions undertaken by a taxable person. EWB is required for all transactions involving movement of goods whether in the course of supply on not. Supply has been discussed extensively, but EWB is required not whenever there’s a ‘supply’ but every time there’s ‘movement’ of good. Transactions involving goods but ‘treated as’ supply of services such as leasing of goods or supply of food-drink, EWBs are required. In other words, every time there is movement of goods, whether by way of supply of goods or supply of services, EWB will be required.
Transport of goods must be distinguished from delivery of goods. Transport and delivery seem synonymous, but they are not. Journey is a part of transportation and it can be said that transportation has commenced as soon as the Consignor hands over the goods with clear and irrevocable instructions to a Carrier to put them on a journey to a specified destination and hand them over to a specified (or altered) Consignee (or his Order). At this point, the actual journey has not even begun but transportation has. After the journey commences, it can be interrupted or continuous, but transportation continues to be in-progress.
Likewise, journey may end but transportation would still be in progress. Now, transportation will conclude only when the instructions of the Consignor have been satisfactorily discharged by the Carrier on handing over the goods to the Consignee (or his Order). EWB is required ‘before’ commencement of transportation regardless of commencement of journey. Delivery is that legal responsibility is where title passes, section 10(1)(a) where it states, “movement terminates for delivery…..”. Delivery assumes legal significance which must carefully be observed in each transaction.
Place of Delivery
EWB 01 requires ‘place of delivery’ to be specified and must not be interchanges with ‘place of supply’. EWB is intended to create contemporaneous trail of physical movement of the goods. It is not meant to address the legalistic concept of ‘place of supply’ which can vastly differ from ‘place of delivery’. Though physical movement of the goods may be from one location to another one but, in the eyes of law, place of supply could very well be the location of the recipient. So, it is not conceivable for EWB to require information about ‘place of supply’ but very simply the ‘place of delivery’ or ‘destination of journey’. In fact, it can be seen that when GSTIN of Recipient is incorporated, the Place of Delivery will auto-populate.
One who effects supply is the Supplier and Consignor in one who causes movement of the goods. Very often Supplier and Consignor may be the same person but not always. Supplier may be the mind behind the supply but warehouse keeper is still the Consignor. Similarly, recipient is defined in section 2(93) to be the one who pays consideration, but such person may not always be the Consignee.
Transaction Value is understood from section 15 but Consignment Value is required to be specified in EWB to be the transaction value inclusive of applicable GST. It must be noted that EWB itself requires both these values to be specified – transaction value as well as GST amount. Explanation provided in rule 138 require in case of goods being sent for job-work requires EWB to necessarily to be prepared by the Principal as if to ban the job-worker from preparing the EWB. Consignment value must answer the measure of value of section 15 in all cases. So, supplies where the consideration is in non-monetary form also require EWB to be issued. Background material on GST by ICAI may be referred for detailed discussion on supplies with non-monetary consideration. Equipment costing Rs.100 lacs moved inter-State under a monthly lease of Rs.5 lacs
Non EWB Goods
Exempt goods are well understood but under rule 138(14) there are ‘excluded goods’ in respect of which EWB is not required even if they are ‘moved’. It may be noted that movement of goods exempted under notification 2/2017-Central Tax (Rate) dated 28 June, 2017 does not required EWB. It is also important to note that movement of goods listed in rule 138(14) of State/UT GST Rules will also be excluded under the Central GST Rules. This also acknowledges that State/UT GST Rules stand alone on the requirement of EWB in respect of intra-State movement and the Central GST Rules are limited only in respect of intra-State movement. EWB is not required even when there’s supply without any movement of goods (see, section 10(a)(c)).
Such exclusion from EWB is allowed to all goods if the value is less than Rs.50,000/-. As remarkable as this requirement is, it does not impose unreasonable burden on a retail customer who buys a mobile phone for value above Rs.50,000/- to assume that he needs to carry an EWB because as soon as the sale was concluded ex-works, it is no longer movement of goods by a registered person, whether by way of supply or otherwise.
EWBs effect on PoS
Inter-State movement or inter-State supply are two distinct terms to be recognized. By the fiction in section 7 of IGST Act, several transactions are imputed to be inter-State supplies but they for the limited purposes of EWB, their actual movement alone determines whether it is inter-State movement (attracting Central EWB) or intra-State movement (attracting State/UT EWB). Here we notice that as many as 15 States/UTs have synchronized their movement to ensure ease of movement whether inter-State or intra-State. EWB is required whether the movement of goods is pursuant to supply or not and pursuant to supply of goods or of services.