What is E-way Bill: Rules, Applicability, Limit, Requirement & Generation Process Explained

E-way bill was rolled out nationwide on 1st April 2018. This was implemented to help quick and easy movement of goods in the country. E-way bill is one of the key aspects for GST compliance as a business enterprise moving large batches of goods. E-way bill system helps the government track the movement of goods across the country and prevent tax evasion.

If you are a business owner, transporter, or supplier moving goods, knowing when and how to generate an e-way bill is essential. It not only keeps you compliant with GST laws but also avoids penalties and delays in delivery. In this blog, we'll break down everything you need to know about e-way bills.

What Is an E-way Bill?

An e-way bill or electronic-way bill is a document introduced under the GST regime that needs to be generated before transporting or shipping goods worth more than ₹50,000 within a state (intrastate) or between two states (interstate).

The physical copy of e-way bill must be present with the transporter or the person in charge of the conveyance and should include information such as goods, recipient, consignor and transporter.

Importance of e-way bill

Here’s why the e-way bill plays a crucial role in goods transportation and GST compliance:

• Tracks movement of goods in real-time, making logistics more transparent.
• Reduces paperwork and manual documentation at checkpoints.
• Simplifies GST compliance for businesses by digitising the process.
• Prevents tax evasion by ensuring goods are accounted for during movement.
• Improves efficiency and speed in goods delivery due to reduced stoppages.

E-way Bill Rules

Here are some of the e-way bill rules that businesses must be aware of:

• The person who generates e-way bill should be a registered person on GST portal
• The person must also register on the e-way bill portal
• If the transporter is not registered person under GST, it is mandatory for him to get enrolled on e-waybill portal  before generation of the e-way bill
• E-way bill must be generated for: supply of goods, inward supply from an unregistered person and reasons other than a supply (for example, return of goods)
• Every company responsible for the movement of goods of consignment value more than ₹50000 is required to fill Part A of FORM GST EWB-01.

The limit of consignment value changes with each state. Before you print an e-way bill make sure you know the limit of consignment value that is mandated by your state for which e-way bill has to be generated.

E-way Bill Format

The e-way bill is made up of two main parts — Part A and Part B. Each part collects specific information that helps track the movement of goods and ensures GST compliance.This is what the FORM GST EWB-01:

The e-way bill format is standardized to ensure all necessary information is captured accurately. It is divided into two main parts: Part A and Part B. 

Part A of the e-way bill (Form EWB-01) collects details about the consignment itself. This includes: 

• GSTIN of the recipient 
• Place of delivery (PIN code) 
• Invoice or challan number and date 
• Value of goods 
• HSN code 
• Reason for transportation 
• Transport document number (e.g., Goods Receipt Number, Airway Bill Number) 

Part B of the e-way bill requires the transporter to provide the vehicle number used for transporting the goods. This part is filled out by the transporter on the common portal. 

Successfully implementing these rules helps streamline logistics across India, making the cross-border movement of goods a much smoother process for all businesses involved. 

Let us understand the fields in detail:

• GSTIN of Recipient: Mention the GSTIN number of the recipient.
• Place of Delivery field must be filled with the PIN Code of place of delivery
• Invoice or Challan Number: Mention the Invoice or Challan number against which the goods are supplied.
• Value of Goods: Mention the consignment value of goods.
• HSN Code: Enter the HSN code of goods which are transported. If your turnover is up to ₹5 crores, you need to mention the first 2 digits of HSN code. If it is more than ₹5 crores, 4 digits of HSN code are required.
• Transport Document number should indicate Goods Receipt Number or Railway Receipt Number or Airway Bill Number or Bill of Lading Number.
• Reason for Transportation shall be chosen from one of the following:
• Supply
• Export or Import
• Job Work
• SKD or CKD
• Recipient not known
• Line Sales
• Sales Return
• Exhibition or fairs
• For own use
• Others

When is an e-way bill required?

An e-way bill must be generated before transporting goods under certain conditions. It applies to all modes of transport—road, rail, air, or ship.

You’ll need an e-way bill in the following situations:

• When goods worth more than ₹50,000 are moved, either for a supply (like a sale), return, or for reasons other than supply (like job work or sample).
• For interstate movement of goods, even if the value is below ₹50,000 in some specific cases.
• If you're transporting goods through a transporter, and you're registered under GST.
• When goods are sent for export or import.
• Transfer of goods between different branches of the same company, located in different states.

Who should e-way bill be issued

Who should generate an e-way bill?

Not everyone needs to generate an e-way bill, but if you're moving goods and meet certain conditions, you might be responsible.

Here’s a quick breakdown of who needs to generate an e-way bill:

• Registered suppliers: If you’re a GST-registered business and you're sending goods worth more than ₹50,000, you must generate the e-way bill.
• Registered recipients: If you're receiving goods and the supplier hasn’t generated the e-way bill, you (as the buyer) are responsible for doing it.
• Transporters: If neither the supplier nor the buyer generates the bill and the value is above ₹50,000, then the transporter moving the goods must generate it.
• Unregistered persons: If you're not registered under GST but are moving goods to a registered person, the registered recipient must generate the e-way bill.
• E-commerce operators and couriers: In some cases, logistics or courier companies handling deliveries on behalf of sellers may also be responsible for generating e-way bills.

E-way Bill System

e-Way bill system refers to the e-Way bill portal, an Information and Communication Technology based solution developed by National Informatics Centre.  This portal allows businesses to generate e-Way bill for the movement of goods.

Based on the e-Way Bills generated, the e-way bill system pulls GSTR-1 related information and automatically feeds it to a business’s GSTR-1 returns. This helps businesses avoid spending time on filling GSTR 1.

Other benefits of using the e-way bill system includes:

• This system supports different modes of e-Way Bill generation. Businesses can register any mode of e-Way Bill generation and use them for e-Way Bill generation.
• Businesses can create their own masters like customers, suppliers, products and transporters to make e-Way Bill generation smoother.
• The system allows businesses to prepare the consolidated e-Way Bill instead of giving the multiple e-Way Bills for movement of multiple consignments in one vehicle.
• The system notifies businesses through the web and SMS about the various activities like rejected EWB, verified EWB, etc.
• Businesses can create, modify and freeze ‘sub-users’ for generation of the e-Way Bill and assign them to employees or branches as per need. Businesses can also authorise sub-users to execute only certain activities on the system.

Validity and Cancellation of E-way Bills

Validity of the e-way bill depends upon the distance the goods are transported. In case of a regular vehicle, for every 100 KM or part of its movement, one day validity is provided. In the case of Over Dimensional Cargo vehicles, for every 20 KM or part of its movement, one day validity is provided. This validity expires on the midnight of last day.

For example, suppose an e-way bill is generated at 00:04 hours (12:04 am) on 14th March. Then first day would end on 00:00 hrs (12 am) midnight of 15 -16 March. Second day will end on 12:00 am midnight of 16 -17 March and so on.

If you have made a mistake on your e-Way bill you can cancel it. An e-way bill is usually cancelled if you make a mistake while entering data or if the goods didn’t get transported on the scheduled date. The time limit to cancel the bill is within 24 hours of its generation.

One can easily carry out e-way bill cancellation, by visiting the homepage and following these steps:

1. Under the "E-way Bill", tab, click the sub-option "Cancel"
2. Choose an e-way bill from the list that appears
3. Enter the 12 digit e-way bill no., for the e-way bill which needs to be cancelled
4. Select "Go"
5. Fill in a suitable reason for the cancellation

Once this is done, the e-way bill will be cancelled, and you will not be able to use it further.  

Penalties for Non-compliance

Failing to follow e-way bill rules can lead to serious consequences for businesses and transporters. These penalties are meant to ensure the smooth movement of goods and prevent tax evasion.

Let’s look at what can go wrong and what penalties apply:

What are the penalties?

1. Monetary penalty: A fine of Rs. 10,000 or the amount of tax evaded (whichever is higher) may be imposed.

2. Detention and seizure: If the authorities suspect non-compliance, the vehicle and goods can be detained or seized. To release the goods, the taxpayer may be asked to:

• Pay the applicable tax  and
• Pay a penalty equal to 100% of the tax amount (if the owner comes forward), or
• Pay tax + 50% of the value of goods (excluding tax) (if the owner does not come forward).

When is a penalty charged?

You could face a penalty in the following situations:

• Goods are moved without a valid e-way bill when required under the rules.
• Wrong or incomplete information is entered in the e-way bill.
• The vehicle is stopped for inspection and the driver fails to produce a valid e-way bill.
• Expired validity – the goods reach after the e-way bill validity has expired without an extension.

How to avoid penalties?

• Always generate a valid e-way bill before transporting goods.
• Double-check the details entered in the bill like GSTINs, value, HSN code, distance, vehicle number, etc.
• Ensure that goods are delivered within the validity period or request an extension if needed.
• Train your logistics staff and drivers to carry e-way bills and understand the rules.

Cases when an e-way bill is not required

While the e-way bill is mandatory for most goods movement, there are a few exceptions where it is not needed. These exemptions help reduce unnecessary paperwork in specific low-risk or practical scenarios.

Here’s a look at the main cases where an e-way bill is not required:

• Goods below the threshold value: If the value of the consignment is less than Rs. 50,000, no e-way bill is needed.
• Non-motorised transport: If goods are being transported by hand, bicycle, or rickshaw, an e-way bill is not required.
• Specific exempted goods: Some goods are exempted from e-way bill requirements. These include:
  • Fresh fruits and vegetables
  • Meat, milk, curd, and eggs
  • Books and printed material
  • Handloom products
  • LPG for household use

• Goods transported under customs supervision: No e-way bill is required for goods moved:

  • From port, airport, air cargo complex to an Inland Container Depot (ICD)
  • Under customs bond or customs clearance
• Empty cargo containers: When empty containers are moved, an e-way bill is not needed.
• Transport by defence forces: Goods transported by or to Defence or Armed Forces are exempted from e-way bill rules.
• Transport within a notified area: If goods are transported within a small, notified area, like within a state or union territory, and the state government has exempted such movements, then no e-way bill is needed.

State-wise e-way bill rules and limits

While the e-way bill system is governed under GST and applies across India, individual states can set specific rules and threshold limits for the movement of goods within their boundaries (intra-state).

Illustrative table of intra-state e-way bill thresholds (as per latest updates)

What must be done if the validity of the e-way bill expires due to vehicle breakdown or other circumstances?

The validity of the e-way bill can be extended under circumstance of exceptional nature, law and order issue, trans-shipment delay, accident of conveyance etc by updating the reason for extension and the details in Part B of Form GST EWB-01.

• E-Way Bill Registration
• E-Way Bill Generation
• Bulk E-Way Bill Generation
• E-Way Bill FAQs
• Consolidated E-way Bills
• E-Way Bill Verification

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