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.
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.
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.