An e-way bill is an electronic document. As per the latest GST rules, you are required to generate an e-way bill if the transported goods are worth more than Rs. 50,000. It is mandatory to generate an e-way bill for all inter-state movements of goods. However, for intra-state movements, its requirement varies by state; some states mandate it, while others treat it as optional.
The e-way bill system has benefitted the logistics industry in India by reducing paperwork and transit delays. Also, it has minimised tax evasion and improved supply chain efficiency through real-time tracking. In this way, it has benefitted all the related parties such as sender (consignor), receiver (consignee), transporter, banks, and NBFCs.
Want to gain more clarity? Let’s see what good and bad has the e-way bill system brought to logistics since its implementation on April 1, 2018. Also, we will see who needs to generate an e-way bill and what details are included in it.
Who needs to generate an e-way bill
The responsibility to generate the e-way bill lies with the:
- Consignor
- Consignee
- Transporter
In most cases, the consignor (seller) generates it if goods are transported using their own or hired vehicles. Alternatively, the consignee (buyer) or transporter may generate it (depending on the arrangement).
What key details are included in an e-way bill
An e-way bill of format EWB-01 contains the following details:
- Information about the goods, such as description, quantity, and value.
- Consignor’s details, including GSTIN (Goods and Services Tax Identification Number).
- Consignee’s details, including their GSTIN or address.
- Transporter details, like vehicle number or transporter ID.
What good has the e-way bill system brought to logistics
The e-way bill system has modernised logistics in India by reducing delays and easing compliance. It has reduced paperwork, especially for high-frequency sellers, such as those selling goods on online marketplaces. Let’s understand the key benefits:
1. Less documentation requirements
- Earlier, goods movement required extensive state-wise paperwork, which was cumbersome.
- Now, with e-way bills, there is no need for physical documents as the bill is electronically mapped.
- This reduces the burden of handling and maintaining physical documents.
2. Lower costs
- The e-way bill promotes proper invoicing and ensures all transactions are recorded.
- This reduces the issues of under-invoicing and tax evasion.
- Earlier, goods transport faced delays at multiple checkpoints for tax verification.
- Now, the e-way bill system has digitised this process
- The waiting times have been significantly reduced.
- Due to faster transportation, fuel and maintenance costs have been lowered.
3. Reduced delivery times
- Before the e-way bill system, transport vehicles had to halt at numerous checkposts across state borders and highways.
- This caused delays in goods movement.
- The e-way bill system has removed many of these checkpoints.
- Indian trucks, which travel around 85,000 km annually, are now narrowing the gap with developed countries where trucks cover 1,50,000 to 2,50,000 km annually.
What bad has the e-way bill system brought to logistics
The e-way bill system offers several benefits as discussed above. However, it also creates some unique challenges, such as issues related to bill extension, compliance for frequent shipments, and internet dependence. Let’s understand in detail:
1. Challenges in extending e-way bills
- When an e-way bill is extended, it creates multiple bill numbers for the same shipment or invoice.
- This leads to confusion or duplication in records.
- Additionally, the time allowed for extending a bill (4 hours before and after expiry) is quite short.
- Within this timeframe, it becomes difficult for businesses to manage unplanned delays.
2. Compliance issues for frequent shipments
- Businesses with multiple daily movements of goods face challenges in generating e-way bills on time.
- For this purpose, they need specialised software to:
- Automate the creation of bills
and
- Reconcile these with their overall turnover
- This adds complexity and costs for compliance.
3. Dependence on Internet availability
- The e-way bill system works entirely online.
- In areas with poor internet connectivity, generating bills becomes difficult.
- Many small transporters and businesses (especially in rural areas), lack familiarity with internet-based systems.
- This further adds to the struggle of adopting the technology.
Conclusion
Since its implementation on April 1, 2018, the e-way bill system has transformed logistics in India by:
- Improving transparency
- Reducing transit delays
- Cutting logistics costs
This system has further simplified documentation requirements and reduced tax evasion for authorities. However, several challenges like limited extension time and internet dependence remain. This troubles rural sellers who lack better infrastructure and are less familiar with Internet technology.