Impact of Eway Bill on FMCG Sector

FMCG (Fast-Moving Consumer Goods) sector consists of businesses dealing in goods that are quickly consumable (therefore called fast-moving) such as milk and dairy products, beverages, cosmetics, etc. Since FMCGs have a short shelf life, quick delivery of goods is critical in the FMCG sector. The introduction of the e-way bill system 2018, apart from facilitating a smoother and faster transfer of goods, has benefitted the FMCG industry in many other ways as well. In this article, we will be discussing how the e-way bill system has benefited the businesses in the FMCG sector, which happens to be the fourth largest sector in the Indian economy.

Benefits of E-Way Bill on FMCG Sector

The introduction of GST and then the e-way bill by the government of India has benefited the FMCG industry in a number of ways. Following are some of the major benefits that the FMCG sector enjoys post the implementation of the e-way bill system:

 

• Interstate transportation of goods has become smoother and faster after the introduction of e-way bills as many check posts and barriers have been removed. This is a major benefit as quick transfer of goods is critical for the FMCG industry due to the short shelf life of the products.

• An e-way bill is required only if the total value of taxable items in a consignment exceeds ₹50,000. Since many products in the FMCG sector such as milk, egg, wheat, rice, etc. are excluded from GST, FMCG companies need not generate any e-way bill in many cases.

• No e-way bill is required unless the value of each of the consignments in a shipment crosses ₹50,000 even if the total value of the shipment is more than ₹50,000. This is beneficial for FMCG companies as in many cases, companies transport multiple consignments in bulk.

• No e-way bill is required for intra-state transportation if the distance is less than 50 km.

• The sub-user functionality in the e-way bill system is also an advantage for FMCG companies for it allows them to create a controlled network within the organisation with a presence in multiple locations across the country. The system also enables the companies to assign different roles to different team members.

• Companies also have the option to generate e-way bills in bulk. This significantly improves the efficiency of the organisation as large FMCG companies have to transfer hundreds of consignments on any given day. Moreover, the e-way bill tool can also be linked to the company’s ERP (Enterprise Resource Planning) software through an API (Application Programming Interface).

• The government allows multiple ways for e-way bill generation including SMS, web module, bulk upload tool and API integration. This has made the process and the system easier for the companies.

Types of FMCG Products

The FMCG industry is a vast industry and a large class of products fall in the FMCG category. Products that fall in the FMCG category include:

 

• Fresh/Frozen Food and Dairy Products: Milk, curd, fruits, vegetables, raisins and nuts

• Processed Food: Cereals, potato chips and packaged pasta

• Beverages: Bottled water, soft drinks, energy drinks, and fruit juices

• Baked Products: Biscuits, cookies, and bagels

• Prepared Food: Ready-to-eat meals

• Toiletries: Soaps, toothpaste, and hair care products

• Cleaning Products: Window/glass cleaner, baking soda, dish cleaner and oven cleaner

• Stationery and Office Supplies: Pen, pencil, eraser and marker

The recently introduced e-way bill system by the government of India has helped the FMCG sector in a number of ways. It has not only ensured better compliance of norms by the transporters but has also improved the efficiency of the businesses. You can learn how to generate e-way bills through the e-way bill login portal on Finserv MARKETS, the exclusive financial services marketplace.