Frequently Asked Questions (FAQs ) on eWay bill

The e-way bill provisions aim to remove the ills of the erstwhile way bill system prevailing under VAT in different states, which was a major contributor to the bottlenecks at the check posts.The e-way bill provisions aim to remove the ills of the erstwhile way bill system prevailing under VAT in different states, which was a major contributor to the bottlenecks at the check posts.

Moreover different states prescribed different e-way bill rules which made compliance difficult. The       eWay bill provisions under GST will bring in a uniform eWay bill rule which will be applicable throughout the country. The physical interface will pave way for digital interface which will facilitate faster movement of goods.

It is bound to improve the turnaround time of vehicles and help the logistics industry by increasing the average distances travelled, reducing the travel time as well as costs.

We are sharing some FAQ’s that will be helpful to know eWay bill:

1. What is an eWay bill ?

eWay bill is a document required to be carried by a person in charge of the conveyance carrying any consignment of goods of value exceeding Rupees 50,000 as mandated by the Government in terms of section 68 of the Goods and Services Tax Act read with rule 138 of the rules framed thereunder. It is generated from the GST Common Portal by the registered persons or transporters who causes movement of goods of consignment before commencement of such movement .

 

2. What is the common portal for generation of e – way bill .

The common portal for generation of eWay bill is https://ewaybill.nic.in

3. Why is the eWay bill required?

Section 68 of the Goods and Services Tax Act mandates that the Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed.

Rule 138 of Karnataka Goods and Services Tax Rules , 2017 prescribes eWay bill as the document to be carried for the consignment of goods of value more than rupees 50,000 . Government has issued a notification under rule 138 of Goods and Services Tax Rules , 2017 mandating to carry eWay bill for transportation of goods of consignment of value more than rupees 50,000. Hence eWay bill generated from the common portal is required to be carried .

4. Who all can generate the eWay bill ?

Every registered person who causes movement of goods of consignment value exceeding 50,000 rupees in relation to supply; or reasons other than supply; or inward supply from unregistered person shall generate eWay bill.

It means , the consignor or consignee, as a registered person or a transporter of the goods can generate the eWay bill . The unregistered transporter can enroll on the common portal and generate the eWay bill for movement of goods for his clients. Any person can also enroll and generate the eWay bill for movement of goods for his/her own use.

5. Who all can update the vehicle number for the eWay bill ?

The eWay bill is not valid without the vehicle number updated on the common portal , if on the mode of transport is the road. The Vehicle number can be updated by the generator of the eWay bill or the transporter assigned for that eWay bill by the generator.

6. What are pre – requisites to generate the eWay bill ?

To generate the eWay bill , it is essential that the person shall be registered person and if the transporter is not registered person it is mandatory to get enrolled on the common portal of eWaybill before generation of the eWay bill. The documents such as tax invoice or bill of sale or delivery challan and T ransporter ’s Id , who is transporting the goods with transporter document number or the vehicle number in which the goods are transported are required.

7. If there is a mistake or wrong entry in the eWay bill , what has to be done?

If there is mistake, incorrect or wrong entry in the eWay bill , then it cannot be edited or corrected. It has to be cancelled within 24 hours of its generation.

8. Whether the eWay bill can be cancelled? if yes, under what circumstances ?

Yes, eWay bill can be cancelled if either goods are not transported or are not transported as per the details furnished in the eWay bill . eWay bill can be cancelled within 24 hours from the time of generation.

9. If the vehicle in which goods are being transported having eWay bill is changed , then what has to be done?

The eWay bill for transportation of goods always should have the vehicle number that is actually carrying the goods. There may be requirement to change the vehicle number after generating the eWay bill or after commencement of movement of goods due to transshipment or due to breakdown of vehicle .

In such cases , the transporter or generator of the eWay bill can update the changed vehicle number.

10. Why the transporter needs to enroll on the eWay bill system?

There may be some transporters, who are not registered under the Goods and Services Tax Act and if such transporters cause the movement of goods for their clients , they are required to generate the eWay bill on behalf of their clients for update the vehicle number for eWay bill . Hence, they need to enroll on the eWay bill portal and generate the 15 digits Unique Transporter Id.

11. Can I transport the goods with the eWay bill without vehicle details in it?

No, One needs to transport the goods with eWay bill specifying the vehicle number , which is carrying the goods . However, where the goods are transported for a distance of less than 10,000 km within the State from the place of business of consignor to the place of transporter for further transportation , then the vehicle number is not mandatory.

12. Whether eWay bill is required for all the goods that are being transported?

The eWay bill is required to transport all the taxable goods with the value exceeding 50,000 rupees except 154 goods specified in Annexure to the notification.

13. What is consolidated eWay bill ?

Consolidated eWay bill is a document containing the multiple eWay bill s for multiple consignments being carried in one conveyance (goods vehicle) . That is, the transporter, carrying the multiple consignments of various consignors and consignees in one vehicle is required to carry one consolidated  eWay bill instead of carrying multiple eWay bill s for those consignments.

14. Who can generate the consolidated eWay bill ?

A transporter can generate the consolidated eWay bill s for movement of multiple consignments in one vehicle.

15. Can the eWay bill be deleted or cancelled?

The eWay bill once generated cannot be deleted. However, it can be cancelled by the generator within 24 hours of generation.

16. Who can reject the eWay bill and Why?

The person who causes transport of goods shall generate the eWay bill specifying the details of other person as a recipient of goods.

There is a provision in the common portal for the other party to see the eWay bill generated against his/her GST IN. As the other party, one can communicate the acceptance or rejection of such consignment specified in the eWay bill. If the acceptance or rejection is not communicated within 72 hours from the time of generation of eWay Bill , it is deemed that he has accepted the details.

17. If the goods having eWay bill has to pass through transshipment and through different vehicles, how it has to be handled?

Some of the consignments are transported by the transporter through transshipment before it is delivered to the recipient at the place of destination . Hence for each movement from one place to another, the transporter needs to update the vehicle number in which he is transporting that consignment.

18. Is there any validity period for eWay b ill?

Yes. Validity of the eWay bill or consolidated eWay bill depends upon the distance the goods have to be transported. The validity is one day upto 100 km and for every 100 km or part thereafter it is one additional day.

19. Which types of transactions that need the eWay bill ?

For transportation of goods in relation to all types of transactions such as outward supply inter state, inward supply whether from inter state including from an unregistered persons or for reasons other than supply also eWay bill is mandatory .

 

20. Who is required to generate the eWay bill ?

Every registered person, who causes movement of goods, needs to generate the eWay bill . If the registered person is unable to generate the eWay bill , the transporter who transports the goods can generate the eWay bill on behalf of his/her client. If the movement is caused by an unregistered person, he may at his option generate the eWay bill .

21. Can I use the different modes of transportation to carry the goods having the eWay bill ? If so, how to update the details?

Yes .One can transport the goods through different modes of transportation – Road, Rail, Air, Ship . However, always eWay bill needs to be updated with the latest mode of transportation or conveyance number accordingly. That is, at any point of time, the details of conveyance specified in the eWay bill on the portal should match with the details of conveyance through which goods are actually being transported .

22. What are the documents that need to be carried along with the goods being transported?

The person in charge of a conveyance shall carry copy of the eWay bill or the eWay bill number generated from the common portal.

23. How to generate the eWay bill from different registered business places?

The registered person can generate the eWay bill from his account from any registered business place. However, he/she needs to enter the address accordingly in the eWay bill . He/she can also create multiple sub – users and assigned to these places and generate the eWay bills accordingly.

24. What are the modes of eWay bill generation , the tax payer can use?

The eWay bill can be generated by the registered person in any of the following methods ; –

o Using Web based system

o Using SMS based facility

o Using Android App

o Using Site – to – Site integration

o Using GSP ( Goods and Services Tax Suvidha Provider )

25. How can the taxpayer use the SMS facility to generate the eWay bill ?

The taxpayer has to register the mobile numbers through which he wants to generate the eWay bill on the eWay bill system .

26. How can the taxpayer use the Android App to generate the eWay bill ?

The tax payer has to register the EMEI numbers of the mobiles through which he wants to generate the eWay bill on the eWay bill system .

27. How can the taxpayer integrate his/her system with eWay bill system to generate the eWay bill s from his/her system?

The taxpayer should register the server details of his/her systems through which he wants to generate the eWay bill using the APIs of the eWay bill system .

Read more:

What eWay means to business  http://www.gst-insights.com/what-is-eway-bill/

 

What is eWay bill?

eWay bill is a document required to be carried by a person in charge of the conveyance carrying any consignment of goods of value exceeding Rs. 50,000. This is similar to the concept of Transit bill, Bill T used to transportation of goods except that it will eliminate state-wise documentation and ensure faster transit of goods by doing away with checkposts at state borders..

This has been mandated by the government in Goods and Services Tax (GST) Act.

How to Generate eWay bill?

An E-Way bill is generated through the GST Common Portal  – ewaybill.nic.in – by registered users or transporters who cause movement of goods of consignment. The bill came into effect on April 1, 2018.

Alternatively, eWay bill can also be generated or cancelled through SMS, Android App and by Site-to-Site Integration(through API). The steps to generate and cancel e Way bill via SMS Facility can be read in our blog on “Guide on how to generate eWay bill through SMS

List of details required to Generate eWay bill

The details which are required to generate eWay bill in single or bulk are:

  1. Document No. which can be the Invoice No, Challan No, Credit Note or Bill of entry
  2. Supplier information i.e. Supplier Name, GSTIN and Address {These are pre populated information}.
  3. Buyer information i.e. Party name, GSTIN and Address.
  4. Item Details i.e. Item name, description, HSN Code, Quantity, Taxable value
  5. Transportation details i.e. Transporter name, Transporter ID, Vehicle no, Document no.

After these details are furnished an eWay bill is generated, unique eway bill number (EBN) is allocated and is available to the supplier, recipient, and the transporter.

Key 09 points to understand eWay :

  1. eWay bill can be generated by the consignor or consignee, as a registered person or a transporter of the goods. The unregistered transporter can enrol on the common portal and generate the eWay bill for movement of goods for his clients.
  2. The prerequisite for generation of eWay bill is that the person who generates the bill should be a registered person on the GST portal and should register on the eWay bill portal.
  3. The documents such as tax invoice or bill of sale or delivery challan and the transporter’s ID must be available with the person who is generating it.
  4. The eWay bill is required to transport all the goods except exempted under the notifications or rules. The movement of handicraft goods or goods for job-work purposes also requires eWay bill even if the value of consignment is less than Rs. 50,000.
  5. The validity of the eWay bill is decided by Part B. Based upon the distance travelled by the goods. The validity of bill starts only after Part B is complete. Therefore one has to be careful when filling the vehicle No, Transporter id, Total distance in this section. {We recommend that it should be filled only when transporter info. are complete}. 
    1. Where the movement of goods in Other than over dimensional cargo- For every 100 km covered the validity of eWay bill is 1 day.
    2. Where the movement of goods in Over dimensional cargo- For every 20 km covered the validity of eWay bill is 1 day.
  6. Once generated, the bill cannot be edited or modified. Only Part-B can be updated.
  7. Any person can verify the authenticity or the correctness of the eWay bill by entering EWB No, EWB Date, Generator ID and Doc No in the search option on the EWB Portal.
  8. If multiple invoices are issued by the supplier to recipient, that is, for movement of goods of more than one invoice of same consignor and consignee, multiple EWBs have to be generated. i.e. for each invoice, one EWB has to be generated, irrespective of the fact whether same or different consignors or consignees are involved.
  9. If validity of the bill expires, the goods are not supposed to be moved. However, one can extend the validity of the eWay bill if the consignment is not reaching the destination within the validity period due to exceptional circumstances  such as natural calamity, law and order issues, trans-shipment delay, accident of conveyance, etc.
  10. Read our blog on “what if the validity of eWay bill expires during transit”.

Conclusion

Through this summary we have tried to explain the key steps involved in generating the bill, also this blog will help you in keeping the checklist ready that is required to generate the eWay bill.

If you have any query on eWay bill please mail us at Bhawana.joshi@gst-insights.com

Thanks

 

Ravi

 

 

All you should know about GSTR 1

GSTR-1 is a monthly return that summarizes all sales (outward supplies) of a taxpayer.

In this article, we discuss the following topics in detail:

  1. Basics of GSTR-1
    1. What is GSTR-1?
    2. When is GSTR-1 due?
    3. Who should file GSTR-1?
    4. How to revise GSTR-1?
    5. Late Fees and Penalty
  2. How to file GSTR-1 on ClearTax GST Software?
  3. General queries on GSTR-1

1. Basics of GSTR-1

A. What is GSTR-1?

GSTR-1 is a monthly or quarterly return that should be filed by every registered dealer. It contains details of all outward supplies i.e sales.

The return has a total of 13 sections.

 

B. When is GSTR-1 due?

The due dates for GSTR-1 are based on your turnover. Until March 2018 the due dates for the return has been notified.

Businesses with sales of up to Rs. 1.5 crore will file quarterly returns.

Other taxpayers with sales above Rs. 1.5 crore have to file monthly return.

Here are the due dates for the return until March  2018.

 

GSTR-1

If your turnover is greater than Rs. 1.5 crore a return should be filed for every month. This means that 4 returns have to be filed for each month July, August, September, and October.

GSTR-1

C. Who should file GSTR-1?

Every registered person is required to file GSTR-1 irrespective of whether there are any transactions during the month or not.

The following registered persons are exempt from filing the return:

  • Input Service Distributors
  • Composition Dealers
  • Suppliers of online information and database access or retrieval services (OIDAR), who have to pay tax themselves (as per Section 14 of the IGST Act)
  • Non-resident taxable person
  • Taxpayer liable to collect TCS
  • Taxpayer liable to deduct TDS

D. How to revise GSTR-1?

Return once filed cannot be revised. Any mistake made in the return can be rectified in the next periods (month/quarter) return. It means that if a mistake is made in September GSTR-1, rectification for the same can be made in October’s GSTR-1.

E. Late Fees and Penalty

Late Fees for not filing GSTR-1 is Rs. 200 per day of delay (Rs. 100 as per CGST Act and Rs. 100 as per SGST Act. The late fees will be charged from the date after the due date.

 

Latest Update: The late fees have been reduced to Rs. 50 per day and Rs 20 per day (for nil return)

Ultimate Guide to eliminate challenges in filing GSTR-2

GSTR-1 filing related activities are completed and the filing GSTR-2 is in process.

The last date for filing GSTR-2 is now 30th Nov. 2017. The magnitude of work involved in GSTR 2 is not as simple as it may seem. Perhaps it requires more attention to get the numbers right for correct input credit.

The magnitude of impact on suppliers, business owners & even GSTP’s is major.

If you are a business owner, GSTR- 2 impact

Then probably one of your biggest worry is whether you’ll be able to claim all your rightful Input Tax Credit? You want to ensure that your GSTR-2 return does not get rejected in the GSTN portal.

If you are a supplier, GSTR- 2 impact

Then you have to be careful during filing of GSTR 1, as any wrong entry here can lead to the passing of credit to the wrong person & then further litigation issues.

Even GSTP’s

They have to be very watchful while uploading these files for clients when multiple invoices get modified in the invoice matching process.

How does one update the books with the new details? This can be boggling when there are hundreds of invoices.

We believe in all these cases; solutions which are most reliable are:

  1. Overview of the work by a Chartered Accountant (GST Expert).
  2. Accounting software solutions like Tally version 6.2
  3. Outsourcing the job to Accounting firms.

After GSTR 1, you are obviously wondering how to file GSTR-2 returns for all your clients quickly and correctly?

In this blog post, we will understand the challenges involved in filing GSTR-2 and how these could be met with the following solution:

  1. Overview of the work by a Chartered Accountant.
  2. Accounting software solutions like Tally version 6.2
  3. Outsourcing the job to Accounting firms. 

Invoice Reconciliation is Central to GSTR-2

In the earlier VAT regime, businesses used to file self-assessed returns to get their Input Tax Credit.

However, in the current GST regime, businesses will get Input Tax Credit based on invoices uploaded by their suppliers.
Thereby, it is now imperative for both the buyer and the supplier to reconcile invoices together. This process is a central prerequisite for filing GSTR-2 returns.
For a buyer, the GSTN portal auto-populates GSTR-2 with invoices reported by the supplier. The buyer is required to cross-check these details with his books and confirm their correctness, before submitting his GSTR-2.

Simple, isn’t? Let us understand why this simple-sounding process is beset with a certain degree of complexities.

Challenges in Filing GSTR-2 Returns

  1. The GSTN portal auto-populates a read-only GSTR-2A form with invoice entries made by suppliers. These invoices don’t necessarily come arranged in the same order as maintained in the buyer’s books. The buyer has to go through each line item to check for correctness before accepting the invoices. For invoices that don’t match, they have to manually reconcile the details with the suppliers.
  2. Suppliers may forget to upload or report some invoices. The buyer will need to alert his client who in turn will need time to understand the reason for such lapses and check whether the supplier can report such invoices? What if the supplier does not agree to these changes?
  3. Some suppliers may have under or over-reported the invoices. Again, it will take time for both the buying dealer and the supplier to arrive at a consensus.
  4. Some invoices uploaded by the supplier may not reflect in GSTR-2A since they might be in transit. Which buyer has considered as input while filing GSTR 1.
  5. The buyer has to accept right invoices only before submitting the GSTR-2. Accepting the wrong invoice can lead to possibilities of litigation due to no provision of revision.

 Solutions for GSTR-2 Filing

To mitigate the risk absolutely, following solution should be used:

  1. Overview of the work by an independent Chartered Accountant once the business accountant has complete.
  2. Accounting software solutions like Tally version 6.2 are seamless.

Conclusion

Business owners need these services that can complete 100% vouching before uploading the data on GST portal. Using their services ensures:

  1. Simplifies the process of invoice matching
  2. Enables quick reconciliation of discrepancy in invoices
  3. Empowers business owners to make the right decisions
  4. Ensures GST compliance
  5. Saves time and reduces business team effort.

References

How to file GSTR-2 returns

Expenses excluded for Input Tax Credit in GST

Though input tax credit can be claimed by a person registered under GST for most inputs, some services are not eligible for input tax credit claim. After almost four months post GST businesses are still trying to understand the changes required in their current systems to accommodate with new compliance model.

We all are doing the analysis to understand its overall impact. On this note, we bring to you our impact analysis on those expenses which are not allowed for GST Input credit and what outcome one should draw from it.

In this article, we look at such services, which are not eligible for input tax credit under GST.

Here is the list of items excluded from input tax credit claim under GST:

Motor Vehicle and Conveyances

Input tax credit can be claimed for motor vehicles or conveyance only when they are used for

  • Making a further supply of such vehicles, Conveyances (For exampleMaruti ,Honda car manufacturers).
  • Transportation of passengers (For example Companies giving vehicles on lease to Ola, Uber, Travel agencies owning the vehicles).
  • Imparting training (Motor driving schools).
  • Transportation of goods (GTA like GATI, INTERIM, BLUE DART).

Therefore companies other than above, cannot claim GST credit of expenses incurred in the purchase of Motor Vehicle. Also, this brings us to consult with our tax advisors on treatment of input credit under following categories

    • Maintenance expenses for office vehicles
    • Conveyance expenses for employees
    • Logistic expenses incurred in transportation of goods.

Food, Beverages and Outdoor Catering

GST Input credit can be claimed for food, beverages only by such registered person who is engaged in the business of

  • Restaurant services
  • Food and catering services
  • Hotels

Therefore regular taxpayers i.e. companies other than above, cannot claim GST credit of expenses relating to food, beverages, and catering incurred during Staff welfare, festivals, Canteen service, Business meetings.

This tells us to consult with our tax advisors on the treatment of input credit for food platforms like Food panda, Zomato, and other online food chains.

However from 1st Nov the GST levy on AC & Non AC Restaurants coming down to 5%, the restaurants will not be able to take the benefits of ITC.

Membership of a club, health and fitness center

In most of the Multinational companies, large size Indian companies generally following expenses are offered to employees:

  • Beauty treatment
  • Health services
  • Cosmetics
  • Medicines.

These expenses are also out of the purview of claiming GST Input credit even if it is given as gifts up to 50,000 for the regular taxpayer.

Life and Health Insurance

The policy holders who have taken general insurance (includes fire, marine, car, theft, etc.) can enjoy GST Input credit paid on the policy premium.However, the premium paid for health and life insurance will not be allowed for GST input credit.

Travel Benefit for Employees

The travel benefits extended to employees on vocation such as leave or home travel concession cannot be claimed for GST input credit.

Conclusion:

We believe it is imperative for the companies to make the necessary operational and financial changes for accommodating the above cases of ineligibility of ITC. In our next edition of the blog, we will discuss some more such expenses in detail.

This leaves us all with a question, what do I need to discuss with my accountants and tax consultants on the requirement to re-structure my business process?

References:

Ineligible input credit under CGST Act.

 

 

What are e-Way bills in GST & How are they going to make business easy ?

e-Way bills is the relaplacement of all the transportation bills like DS-T2 under VAT which were there in existing scenario.

IN THE EXISTING SCENARIO

The submission of way bill known as T2 form on line has to be done with the mutual coordination of the buyer and the seller. It is the buying registered dealer who has to use his user id to open the form from the web site,take the necessary information from the selling dealer and fill it. After filling the T2 completely the same has to be forwarded to the selling dealer,who has to carry a copy of it along with the vehicle carrying such interstate purchased goods. A consignment being received without T2 creates more problem to the buying dealer. Further such non issuance creates problem in creation of C forms.

SO WHAT’S GOING TO CHANGE ABOUT WAY BILLS WHICH IN GST KNOWN AS e-WAY BILLS

The way bills obtained in the current VAT is notoriously used by VAT Authorities for restricting movement of goods across states.

Under GST there will be a free flow movement of goods, physical verification of the consignment can be done if there is any specific information relating to tax evasion or any other malpractice. Otherwise goods once verified can continue unimpeded through the rest of the journey.

Verifying officer needs to submit summary of inspection within 3 days of  verifying a consignment.

Transporters will have the right to upload queries on the GSTN portal if their vehicle is detained for more than 30 minutes without valid reason.

However one major challenge which has to be planned well on time in GST is strict timelines for validity of e-way bills. The validity has been calculated according to the distance travelled.

Valid for                     Distance

1 day                         Less than 100 km

3 days                      100 kms to 300 kms

5 days                      300 kms to 500 kms

10 days                    500 kms to 1000 kms

15 days                   1000 kms or more

What has to be watched for is that looking to the current state of road infra in some parts of India where both urban & rural area fall,  are these timelines possible to meet or not ?

Conclusion

Therefore business will now be able to access these goods without much interferance of VAT authorities because of free flow movement of goods & making ways bills totally digital & seamless in GST.

References

http://www.cbec.gov.in/Way bill in GST

http://economictimes.indiatimes.com/Way bill in GST

Stock Transfer in GST to branches & it’s impact on SMB Business

Impact on Working Capital due to Taxation on Stock Transfer for branches

Stock Transfer in GST is a Boon or Bane? This question appears because it has both the legs & we believe that it has boon’s superceding banes. Here is our analysis.

In Current Scenario

  1. In the current regime Stock transfer to the branches was allowed without any VAT tax payment, based on issuance of stock transfer form known as “Form F” issued by the recipient to the source branch. The purpose of the form was that the transfer is not sale. Hence later at the time of sale of such goods there was taxability where CST was a cost & leading to cascading impact.
  2. Usually stock transfers are movement of goodsto another unit of branch. These are done without any consideration but the complexity arises at which value the tax should be paid. Under excise the excise duty was paid on the cost of manufacturing the goods & no VAT due to no tax on stock transfer.

In GST Scenario

  1. In the GST regime stock transfer is essentially free as there will be no additional cost of CST because of tax credit allowed in any state movement. However the only challenge for business would be of working capital required in excess of the tax liability that arises at the time of stock transfer to branches which has to be paid at the time of transfer & the Input tax credit of the same will be allowed only once stock gets liquidated. Therefore we believe the only challenge here for business is to arrange for ADITIONAL WORKING CAPITAL REQUIREMENT at the time of stock transfer.
  2. In GST, transaction value is broadly considered as the value on which GST is levied. However in case of stock transfer to branches there will be no consideration & accordingly no transation value. Therefore the challenge which is needs clarity in GST is that at what value tax should be paid on Stock Transfer to branches.

Conclusion

Though stock transfers are taxable under GST, the tax is fully allowed as credit. This will eradicate the cascading effect which exists under current regime and as a result, products will be more cost effective. Although this is bound to create crunch in effective working capital, effective planning of branches can reduce the impact on working capital. Therefore such provisions are prompting business to think logically & plan there branches based on demand.

Reference

http://www.cbec.gov.in/htdocs-cbec/gst/index

http://www.gst-insights.com