E-Way Bill for SKD and CKD Goods – Requirements and Generation Procedure

An E-Way Bill (EWB) is required for goods being transported between states if their value exceeds ₹50,000. However, some items may be too large to fit in a single vehicle. To solve this, these items are disassembled for easier transport. After disassembly, the goods are referred to as Semi Knocked Down (SKD) or Completely Knocked Down (CKD) goods. SKD goods are partially dismantled, while CKD goods are fully dismantled into individual components, which are later assembled at the destination. These goods are then sent to their destination state using multiple vehicles.

This practice is commonly adopted in industries such as automotive manufacturing, where vehicles are transported in SKD or CKD form to assembly plants across different states, and in large machinery and industrial equipment manufacturing, where heavy machines are dismantled into smaller components for safe inter‑state movement.

When generating an E-Way Bill, the person must choose between two transaction types: 'Outward supplies' or 'Inward supplies'. If SKD or CKD goods are being transported, and the 'Outward supplies' option is selected, the transaction subtype must be marked as 'SKD/CKD'. This ensures proper GST compliance when goods covered under a single invoice are moved in parts across multiple consignments and vehicles, a scenario frequently seen in automotive assembly lines and large‑scale machinery installations.

The SKD/CKD transaction type is commonly used across multiple industries where goods are large, heavy, or complex to transport in a fully assembled form. Key industries and use cases include:

• Automotive Industry (Two‑Wheelers and Cars)

Two‑wheelers, passenger cars, and commercial vehicles are often transported in SKD or CKD form from manufacturing units to regional assembly plants. This approach reduces transportation costs and enables local assembly across states.

• Heavy Machinery Manufacturing

Industries dealing with construction equipment, mining machinery, turbines, and large plant equipment frequently dismantle machines into SKD/CKD form for safe and compliant inter‑state transportation.

• Industrial Equipment and Capital Goods

Factory machinery, production line equipment, and customised industrial installations are transported in dismantled condition due to size constraints and installation requirements at the destination site.

• Electronics and Electrical Assembly

Large electronics such as televisions, appliances, control panels, and electrical equipment are often shipped in CKD or SKD condition to assembly or testing units located in different states.

• Furniture and Modular Infrastructure Solutions

Large furniture pieces, modular fittings, and infrastructure components are dismantled at the origin, packed compactly, and transported using multiple vehicles.

To generate an e-way bill for goods that must be transported in SKD/CKD form, the supplier must follow the below-mentioned procedure for generating an e-way bill for SKD/CKD goods:

1. Raise the complete single invoice prior to the initiation of the shipment of goods

2. Include a delivery challan that should include the invoice number, along with a certified copy of the invoice along with each

3. Raise an E-Way Bill for each conveyance that is carrying the goods related to the invoice and provide the invoice number while making the e-way bill. This relates directly to SKD in e way bill processing.

4. Include the original copy of the invoice

For example, let us say that a single invoice has been generated for Toothbrush Tufter Machine A, which has been unassembled so that it can be transported via 3 trucks. In such cases, 3 delivery challans and an equal number of e-way bills will be generated, one for each vehicle. These e-way bills will be given to the driver of the vehicle whose details are mentioned on the e-way bill. Just like in the case of e-way bills for goods that are shipped in one piece, this document will need to be furnished when required. Note that the goods must satisfy the laid-down e-way bill norms.

To generate an e-way Bill for Completely Knocked Down (CKD) or Semi Knocked Down (SKD) goods, the supplier must follow the below-mentioned steps:

1. Issue one tax invoice for the full consignment value of SKD/CKD goods before dispatch, even if transportation happens through multiple vehicles.

2. Determine whether the movement is outward or inward supply and ensure the transaction subtype is classified as SKD/CKD.

3. Prepare a separate delivery challan for each vehicle, clearly referencing the same invoice number, challan number, and date.

4. Capture supplier and recipient details, HSN code, total consignment value, and the corresponding delivery challan details.

5. Record transporter GSTIN/ID and the vehicle number for each conveyance before the movement of goods.

6. Generate a distinct e‑way bill for each delivery challan and vehicle, with all e‑way bills linked to the same invoice.

7. Each vehicle must carry the relevant e‑way bill copy, delivery challan, and invoice copy during transit.

8. Ensure adherence to e‑way bill validity, amendment rules, and GST inspection requirements until final delivery.

When goods are transported in Semi Knocked Down (SKD) or Completely Knocked Down (CKD) condition, proper documentation is critical to ensure GST compliance and smooth inter‑state movement. Since a single consignment is moved across multiple vehicles, the following documents must be prepared and maintained carefully:

• Tax Invoice (for Full Consignment Value)

A single tax invoice or bill of supply covering the complete value of the SKD/CKD goods must be raised before dispatch. A certified copy of this invoice should accompany every vehicle transporting part of the consignment.

• Delivery Challan (Per Vehicle)

A separate delivery challan must be issued for each vehicle carrying dismantled parts of the goods. Each challan should clearly reference the same invoice number, along with its own challan number and date.

• GSTIN Details of Supplier and Recipient

The GSTIN of the consignor (supplier) and consignee (recipient) must be available when generating the e‑way bill. If the recipient is unregistered, the status should be marked as URP (Unregistered Person).

• Transporter Details and Vehicle Number

Details such as the transporter GSTIN or transporter ID, along with the vehicle number for the specific conveyance, must be entered for each e‑way bill linked to the delivery challan.

• HSN Code and Place of Delivery

The correct HSN code for the goods and the destination pincode are required to determine the distance and validity of the e‑way bill.

• E‑Way Bill Copy

Once generated, a copy of the relevant e‑way bill must be carried in each vehicle, along with the delivery challan and invoice copy, and produced during inspection if required.

Non‑compliance with e‑way bill provisions for Semi Knocked Down (SKD) and Completely Knocked Down (CKD) goods can lead to serious financial and operational consequences under GST. Since SKD/CKD consignments are typically moved across multiple vehicles under a single invoice, any lapse in documentation or e‑way bill generation is treated as a contravention of GST law.

Monetary Penalty for Non‑Compliance

If SKD/CKD goods are transported without a valid e‑way bill, with incorrect details, or without following prescribed procedures, authorities may levy a penalty under Section 122 of the CGST Act. The penalty applicable is ₹10,000 or the tax sought to be evaded, whichever is higher

This penalty can apply even in cases of incorrect or incomplete e‑way bill data, such as missing vehicle details or failure to generate separate e‑way bills for each delivery challan.

Vehicle Detention and Seizure

In cases of non‑compliance during movement, Section 129 of the CGST Act empowers GST officers to detain or seize the goods and the transporting vehicle. This typically occurs when:

• No e‑way bill is generated for SKD/CKD movement

• Delivery challans or invoice copies are missing or inconsistent

• Vehicle numbers or transporter details are incorrect or not updated

The detained goods and vehicle are released only after payment of the applicable tax and penalty, which may extend to 100% or more of the tax payable, depending on whether the owner of the goods comes forward for release.

Operational Impact

Apart from direct penalties, detention or seizure can lead to:

• Delays in delivery and project timelines, especially for large machinery or automotive assemblies

• Additional logistics and storage costs

• Increased scrutiny by GST authorities on future consignments

Transporting goods in SKD or CKD condition under GST requires careful planning, accurate documentation, and strict adherence to e‑way bill rules. From issuing a single invoice for the full consignment to generating multiple e‑way bills linked to delivery challans, each step plays a critical role in ensuring smooth, compliant movement of goods and avoiding penalties or vehicle detention. Bajaj Markets offers Business Loans to help support logistics costs, GST compliances and operational gaps, without disrupting day‑to‑day cash flow.