The key to the smooth running of the e-commerce industry lies with sturdy logistics. E-commerce companies heavily rely on logistic service providers to fulfil the requirement of transportation across states. Safe to say, customer satisfaction pertaining to e-commerce businesses is now majorly driven by logistics. While some e-commerce companies manage their logistics by availing services from traditional logistic partners, a large number is moving towards building an in-house logistic system. Read on to know the impact of the e-way bill system on e-commerce operators.
The Eway bill is an imperative component of the GST regime. It is mandatory for the document to be generated before goods are transported to another state. Eway bill generation is only applicable when the value of the goods exceeds ₹ 50,000. Simply put, the GST authorities have made it mandatory for parties to carry an E-way bill when moving goods across states under certain conditions.
The e-commerce business is booming in the country and there is an intense movement of goods from one state to another. The government, upon realizing the volume of transactions within the industry, has ensured the applicability of the Eway bill on goods moved by e-commerce operators. Here are certain conditions that are levied on e-commerce operators.
When the intra-state movement of goods via roadways is undertaken by an e-commerce operator or logistics company when the aggregate value of the goods consignment is less than ₹ 50,000 but the value of an individual consignment is less than ₹ 50,000.
The vehicle details do not have to be provided during the intra-state movement of goods if the distance covered during the transportation is 50 Km or less. Previously, the limit was set at 10 Km.
As per the requirements laid down by the GST authorities, persons undertaking the consignment or in charge of the transportation must carry the following documents:
Delivery challan, invoice, or bill of supply
E-way bill or E-way number embedded on the vehicle transporting the goods. The same must also be mapped to the Radio Frequency Identification Device (RFID)
The IRN or Invoice Reference Number must be generated by uploading the tax invoice on the E-way bill portal. The IRC document carries validity The person in charge may also be notified to carry the physical copy of the bill of supply or bill of entry. This factor may be subjective based on the nature of goods and the discretion of the Commissioner in charge.
To ensure that the system rules are diligently followed by the concerned persons, authorities carry out verification of documents and the conveyance. The verification may be carried out in the following different ways:
Physical inspection – The commissioner may empower an authorized officer to intercept the conveyance. The transporter will have to present the physical copy of the E-way bill for verification, especially for the movement of goods across states. The officer, if empowered, may also undertake an inspection of the goods in transit.
Installation of RFID Readers – RFID readers are installed across the way to conduct verification. The reader conducts the verification automatically while mapping the e-way bill.
Once the conveyance or the documents are inspected, a summary report must be sent by the inspection officer within 24 hours of the inspection. This report has to be recorded online. Another final report must be prepared and sent within 3 days of the conducted inspection.
A Conveyance that has undergone inspection in one state does not have to undergo physical verification in the next state. However, the goods may be reinspected in transit if the authorities have received any kind of information pertaining to the goods or evasion of tax.
As per the GST rule, no vehicle can be reserved for inspection beyond 30 minutes if there is no valid reason. If so, then the transporter can seek the intervention of higher authorities by submitting ‘Report of Detention’ in the GST-EWB-04.
The introduction of the E-way bill system has worked towards streamlining the process of transporting goods across the country. E-commerce operations have been simplified with the recent amends made by the GST committee. Stay updated on the developments made against the E-way bill by visiting Finserv MARKETS.