What is an E-way bill?

Introduction

An E-Way Bill is an electronic document required under GST for the movement of goods worth more than a certain limit. It ensures that goods transported within or across states comply with GST regulations. Introduced to reduce tax evasion and improve transparency, the e-way bill system is mandatory for businesses moving goods by road, rail, air, or ship. For Financial Year 2025-26, there are updated rules and limits for e-way bill generation. Understanding the purpose, components, generation process, and benefits is important for businesses and transporters. This guide explains e-way bills in simple terms suitable for beginners and non-financial professionals.

What is the E-Way Bill?

An E-Way Bill is a digital document that contains details about the goods being transported, the supplier, the recipient, and the transporter. The bill is generated on the GST portal before goods are moved.

Key points:

1. Mandatory for Goods Movement: Required for transporting goods worth more than ₹50,000 (threshold may vary by state).
2. Electronic Format: Can be generated online, ensuring authenticity and reducing paperwork.
3. Purpose: Helps authorities track goods, prevent tax evasion, and ensure compliance with GST rules.
4. Applicable Modes: Road, rail, air, or ship transport of goods.
5. Link with GST: E-way bill details are connected with GST returns of supplier and the recipient, making it easier to track taxes.

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What are the Components of an E-Way Bill?

An E-Way Bill contains:

1. GSTIN of Supplier: GST Identification Number of the business sending goods.
2. GSTIN of Recipient: GST Identification Number of the person or business receiving goods.
3. Invoice or Bill Details: Invoice number, date, and value of goods.
4. Transporter Details: Name, GSTIN, and vehicle number (if applicable).
5. Goods Details: HSN code, quantity, unit of measurement, and tax rate.
6. Place of Origin and Destination: State codes, city names, and pin codes.
7. E-Way Bill Number: Unique number generated upon submission on GST portal.

State-wise E-Way Bill Rules and Limits

1. Interstate Transport: Mandatory for goods worth over ₹50,000.
2. Intrastate Transport: Some states may lower the threshold (as per state notification).
3. Budget 2025 Update: Certain essential goods and small businesses may have exemptions.
4. Compliance: E-way bill must accompany the consignment to avoid penalties.

Latest Updates (FY 2025-26) and Budget 2025:

1. Focus on Automation: The government is putting a bigger focus on technology. There are plans to make the E-Way Bill system work even better and faster with E-Invoicing and GPS tracking in vehicles.
2. Stricter Time Limits: New rules have been introduced to restrict the time limit for generating an E-Way Bill based on the date of the invoice (usually limited to 180 days from the invoice date). This is to ensure tax compliance is up-to-date.
3. Over-Dimensional Cargo (ODC) Rules: Special rules for very large goods (ODC) have been tightened to ensure correct validity calculation based on their unique movement challenges.

Ways to Generate an E-Way Bill

1. Online GST Portal: Direct login and fill details to generate E-Way Bill
2. SMS: Some states allow SMS-based generation.
3. Android App: E-Way Bill generation through GST official mobile application.
4. API Integration: Businesses with large transactions can integrate their ERP systems with the GST portal.

When Should the E-Way Bill be Issued?

The E-Way Bill must be generated before the movement of goods begins. This means the vehicle cannot start its journey to the delivery location without having a valid E-Way Bill with it.

The process of issuing it involves two main steps:

1. Generating Part A: The details of the goods (like who is sending/receiving, value, HSN code) must be filled in by the supplier or recipient who is causing the movement. This can be done as soon as the invoice is ready.
2. Updating Part B: The details of the vehicle (like the vehicle number and transporter ID) must be filled in. This is usually done by the transporter once the vehicle is assigned to pick up the goods.

Once both Part A and Part B are filled, the E-Way Bill is considered complete and is valid for transport. If a tax officer stops the vehicle and the E-Way Bill has not been generated or is incomplete, the business can face heavy fines, and the goods might even be held up.

Who Should Generate GST Ewaybills?

The responsibility of generating the E-Way Bill usually depends on who is sending the goods and whether they are registered under GST.

Situation

Who is Responsible for Generating E-Way Bill (EWB)?

Movement is by a GST-registered person (Supplier or Buyer) in their own vehicle or a hired vehicle.

The Registered Person (Supplier or Recipient).

Movement is by a Transporter (and the Registered Person did not generate the EWB).

The Transporter must generate the EWB based on the details provided by the Registered Person.

Goods are sent by an Unregistered Person to a Registered Person.

The Registered Recipient (the one receiving the goods) must generate the EWB.

Value of Goods is less than ₹50,000 (for Inter-State movement or as per Intra-State limit).

E-Way Bill generation is optional (not mandatory).

Movement of Handicraft Goods or certain goods for Job Work between states, even if the value is below ₹50,000.

The person causing the movement (Supplier or Recipient).

Exceptions to E-Way Bill

1. Goods transported within the same premises.
2. Goods transported for personal use, not for sale.
3. Exempt goods under GST (like unprocessed food items).
4. Consignment value below ₹50,000 (threshold may vary by state).
5. Transportation of goods under Customs supervision or in exempted zones.

How to Generate an E-Way Bill?

1. Visit the GST Portal: E-Way Bill System
2. Select ‘Generate New’: Click ‘Generate E-Way Bill’.
3. Enter Supplier & Recipient Details: GSTIN, invoice number, and place details.
4. Enter Goods Information: HSN code, quantity, value, and tax.
5. Transport Details: Vehicle number, transporter GSTIN (if applicable).
6. Submit: Click Generate to receive E-Way Bill Number (EBN).

Requirements for an E-Way Bill Generation Process

1. Valid GSTIN of the supplier and the recipient.
2. Invoice or Bill of Supply for the consignment.
3. Transporter ID or Vehicle Number.
4. Correct HSN codes for goods.
5. Distance details for validity calculation.

Step-by-Step Guide to E-way Bill Generation.

Here is a step-by-step guide for generating a new E-Way Bill on the online portal:

Step 1: Get Ready

• Make sure you have all the required documents and information (GSTIN, Invoice, Vehicle No., etc.) ready.

Step 2: Log in to the Portal

• Go to the official E-Way Bill portal: ewaybillgst.gov.in.
• Enter your valid username, password, and the CAPTCHA code to log in.

Step 3: Start New EWB

• Click on the "E-Way Bill" option on the left side of the screen.
• Click on "Generate New".

Step 4: Fill in Transaction Details

• Transaction Type: Select 'Outward' if you are the supplier/seller or 'Inward' if you are the recipient/buyer who is generating the bill.
• Sub Type: Select the reason for movement (e.g., Supply, Job Work, etc.).
• Document Type: Select the type of document (Invoice, Bill of Supply, etc.).
• Document No. and Date: Enter the number and date of your document.

Step 5: Fill in Party Details (From/To)

• The 'From' and 'To' sections will appear. Your GSTIN and address will be auto-filled in the 'From' section.
• Fill in the GSTIN, address, and PIN Code of the 'To' party (recipient).

Step 6: Fill in Goods Details

• Enter the item details: Product Name, Description, HSN Code, Quantity, Value of goods, and Tax Rates (CGST, SGST, IGST).

Step 7: Fill in Transportation Details (Part B)

• Mode of Transport: Select Road, Rail, Air, or Ship.
• Approximate Distance: Enter the distance in kilometers.
• Transporter ID: Enter the Transporter's ID (if applicable).
• Vehicle Number: Enter the vehicle's registration number.

Step 8: Final Submission

• Click on "Submit".
• The system will generate the E-Way Bill with a unique E-Way Bill Number (EBN). You can now print this bill or save it digitally to be carried with the goods.

Time Limit to Generate E-Way Bill.

The E-Way Bill must be generated before the start of the movement of the goods. There is no specific time limit like "must be done in 30 minutes" once the invoice is made, but it must be done before the vehicle starts moving.

1. Limit on Document Date:

• For Financial Year 2025-26, the E-Way Bill must generally be generated for an invoice or other document (like a delivery challan) that is not older than 180 days from the date of generation.
• For example, if you are generating an E-Way Bill on September 1, 2025, you cannot use an invoice dated before March 5, 2025. This rule prevents businesses from generating bills for very old transactions.

2. Updating Vehicle Details (Part B):

• Once the E-Way Bill (Part A) is generated, the vehicle number (Part B) must be updated as soon as the vehicle is assigned for transport.

3. Validity of E-Way Bill:

• Once the full E-Way Bill (Part A + Part B) is generated, there is a limited time for the goods to reach the destination, called its validity period. If the journey takes longer than this period, the bill expires, and the vehicle can be stopped and fined.

Validity of E-Way Bill.

The validity period for a completed E-Way Bill (Part A and Part B are filled) is calculated as follows (for conveyances other than Over-Dimensional Cargo - ODC):

Distance (in Kilometers)

Validity Period

Up to 200 km

1 Day

For every additional 200 km (or part of it)

Plus 1 additional Day

Calculation Examples:

• Journey of 199 km: Validity is 1 Day.
• Journey of 201 km: Validity is 1 Day (for the first 200 km)+1 Day (for the extra 1 km)=∗∗2Days∗∗.
• Journey of 450 km: Validity is 1 Day (for the first 200 km)+1 Day (for the next 200 km)+1 Day (for the remaining 50 km)=∗∗3Days∗∗.

Important Notes:

1. Start and End Time: The validity period is counted from the date and time the E-Way Bill is generated. The validity expires at midnight on the last day.
2. Extension: If the vehicle gets delayed due to reasons like a vehicle breakdown, accident, or natural disaster, the transporter can request an extension of the E-Way Bill's validity on the portal. This extension must be applied for within 8 hours before or after the expiry time.

Benefits of E-Way Bill

1. Reduces Tax Evasion: Tracks goods across states.
2. Simplifies Compliance: Standardized system for interstate and intrastate transport.
3. Transparency: Authorities can monitor the real-time movement of goods.
4. Ease of Filing: Online generation reduces manual documentation.
5. Time-Saving: Quick online process saves transport time.
6. Penalty Avoidance: Ensures compliance with GST rules.

Conclusion

The E-Way Bill system is a key component of GST compliance, ensuring transparent and efficient movement of goods. It provides benefits like reduced tax evasion, faster transport, and easier compliance for businesses. For FY 2025-26, understanding generation, rules, exceptions, and validity is crucial for suppliers, recipients, and transporters. Timely generation of E-Way Bills ensures smooth operations and avoids penalties under GST.