Eway Bill under GST in Karnataka

Karnataka is one of the first States to adopt and implement the Central Government-led E-way bill system under GST with effect from 25th September 2017. Traders and transporters moving goods within and outside Karnataka have to generate Eway bills where the value of the consignment of goods exceed Rs. 50,000 with some exceptions.

Latest Updates on E-Way Bill

29th August 2021
From 1st May 2021 to 18th August 2021, the taxpayers will not face blocking of e-way bills for non-filing of GSTR-1 or GSTR-3B (two months or more for monthly filer and one quarter or more for QRMP taxpayers) for March 2021 to May 2021.

4th August 2021
Blocking of e-way bills due to non-filing of GSTR-3B resumes from 15th August 2021.

1st June 2021
1. The e-way bill portal, in its release notes, has clarified that a suspended GSTIN cannot generate an e-way bill. However, a suspended GSTIN as a recipient or as a transporter can get a generated e-way bill. 
2. the mode of transport ‘Ship’ has now been updated to ‘Ship/Road cum Ship’ so that the user can enter a vehicle number where goods are initially moved by road and a bill of lading number and date for movement by ship. This will help in availing the ODC benefits for movement using ships and facilitate the updating of vehicle details as and when moved on road. 

18th May 2021
The CBIC in Notification 15/2021-Central Tax has notified that the blocking of GSTINs for e-Way Bill generation is now considered only for the defaulting supplier’s GSTIN and not for the defaulting recipient or the transporter’s GSTIN. 

Brief about ‘e-SUGAM’- prevalent during VAT era

Transit document had to be generated online by a seller or dealer for movement of goods of value above Rs. 20,000 both within Karnataka and in & out of Karnataka in the pre-GST period. The document was known as e-SUGAM. Any dealer had to register himself on the common portal of http://sugam.kar.nic.in/ to generate e-SUGAMs online.

Each dealer was required to identify himself/herself through a unique username and password to access the online system, which had been issued to him/her by the Department. These documents could also be generated via SMS using the registered mobile number of the dealer. This system was called ‘m-Governance Mobile based Sugam’.

A unique number was allotted to each e-SUGAM that was generated. This number became the passport for the transport vehicle at the check-post. The e-SUGAM number had to be presented by the transporter to the check-post officer (CPO). CPO verified it against the actual goods under transport vis-a-vis the details displayed by the system and recorded his agreement in the system. In case of any discrepancy, the officer recorded his remarks in the system and took necessary action, as per law.

This process was applauded and received several accolades as it ensured that the sales are properly accounted for by the dealers along with higher tax compliance. This system upheld ‘Self-declaration over the Departmental policing’. The current E-way bill system under GST also functions on this model widening its applicability across the country and allowing the recipients and transporters to participate in the process. Therefore, not many conceptual changes in the current system against the previous system can be something that Kannadigas can cheer about!

Are c-forms still required to be issued for goods moving out of the State

While e-SUGAM existed, side-by-side, the system of C-form was also prevalent. Nationwide applicable law, CST Act 1956 was amended by The Taxation Laws (Amendment) Act, 2017. Although CST was subsumed with GST, this tax is still applicable to certain non-GST goods.

As per this Act, goods mentioned thereunder when purchased from outside the State could be taxed at a concessional rate of 2 %. C-form had to be issued for this purpose. After the amendment, Section 2(d) that defined goods has now been reduced to a limited scope to cover:

(i) Petroleum crude; 
(ii) High-speed diesel; 
(iii) Motor spirit (commonly known as petrol); 
(iv) Natural gas;
(v) Aviation turbine fuel; and 
(vi) Alcoholic liquor for human consumption.

Form 1st July 2017 onwards, C-form can be continued to be issued for the aforementioned goods in respect of following transactions only:

• Resale
• Use in manufacturing or processing
• Use in the telecommunication network or in mining or in the generation or distribution of electricity or any other power.

Whether movement of goods within, in and out of Karnataka need EWay bill as of today

Inter-state movement of goods requires Eway bills only from 1st April 2018. For the movement of goods within the State, Eway bills are required to be generated as of today since the State has notified the implementation of Eway bill system with effect from 6th September 2017.

No further communication this regard is received for any postponement of the implementation. Though a trial period is running for most of the States until 15th April 2018, Karnataka is one of the few States to have actively promoted the Eway bill system to be used by its people.

However, recently amendment was made to E-way bill rules with Karnataka Government yet to issue a fresh notification for bringing into effect the amended law as earlier notification was issued quite some time back. Coming days we expect a communication this regard. The official site where the Eway bills can be generated and managed is https://ewaybillgst.gov.in

Cases when Eway bills are not required

The recently amended Eway bill rules dated 7th March 2018 by which certain goods and transactions are kept out of the scope of Eway bill requirement. Few Items kept out of the scope of Eway bill generation are:

1. Jewellery, goldsmiths’ and silversmiths’ wares and other articles 
2. Natural or cultured pearls and precious or semi-precious stones; precious metals and metals clad with precious metal. 
3. Currency 
4. Used personal and household effects 
5. Postal baggage transported by Department of Posts 
6. Kerosene oil sold under PDS 
7. LPG for supply to household and non-domestic exempted category of customers. 
8. Coral, unworked (0508) and worked coral (9601)

Some of the transactions that do not need Eway bills are : 
1. Goods being transported by non-motorised conveyance like animal pulled carts, push carts and so on… 
2. Where empty cargo containers are being transported. Eg: Empty carriers or trucks moving. 
3. Where the goods being transported are transit cargo from or to Nepal or Bhutan 
4. Where the goods being transported are alcoholic liquor for human consumption, petroleum crude, high-speed diesel, motor spirit (commonly known as petrol), natural gas or aviation turbine fuel. 
5. Transactions that are treated as no supply under Schedule III of the Act. Please visit our blog on Eway bill rules & its compliance to read the detailed list.

How to register to start generating Eway bills

Every person who must use Eway bills has to one-time register on the common Eway bill portal. For GST taxpayers/registered transporters: Users have to go to the Eway bill portal-> Click Registration on the homepage tab->Click ‘e-Way Registration’ and complete the registration formalities. At the end of this, User will be allotted a unique user ID for logging into the portal.

For transporters unregistered under GST : Logistics sector has a fragmented market. So, the number of small and medium-sized businesses in this sector is high. These businesses operate using 4-5 trucks on an average. Their average turnover also would be less than the threshold limit for GST registration in most of the cases. Such transporters have to enrol themselves on the eway bill portal following the section 35(2) of CGST Act.

In cases where goods are received from an Unregistered Supplier: In such cases, Recipients have to generate Eway bill. Go to the Eway bill portal-> Click Registration on the homepage tab->Click ‘e-Way Registration’ and complete the registration formalities. At the end of this, User will be allotted a unique user ID for logging into the portal. Know the steps for Registration on the Eway bill portal

When and who should generate Eway bills

Eway bills are required to be carried by person-in-charge of the conveyance in which the consignment of goods is being transported only where the value of such consignment exceeds Rs. 50,000.

Following to be kept in mind while arriving at Value of consignment: –

It includes the IGST or CGST & SGST as the case may be -It excludes the value of exempt supply of goods being carried in the conveyance, where the bill is issued for both taxable and exempt supply Eway bills have to be generated by a Seller prior to movement of goods and has to be carried in either a physical copy or in electronic mode by the Person-in-charge of the consignment of goods for delivering it to the buyer’s place.

Other cases where Eway bills are required to be generated are, by: –

The Recipient/Buyer/Consignee as the case may be, has to generate Eway bill if they buy goods from an Unregistered Seller -The Transporters, In case of transport by road in a vehicle with multiple orders, where the aggregate value of consignment in a conveyance exceeds the limit of Rs.50,000 although individual order/Invoice is less than Rs 50,000. In this case, first Eway bills (EWB-01) are to be generated against individual Invoices and a consolidated Eway bill (EWB-02) is finally generated for the consignment

Different ways of generating EWay bills

Eway bills can be generated online on the common portal of Eway bills. Learn the step-by-step process of generating Eway bills online. Also, the Eway bills can be generated and managed via SMS. Eway bill users of Karnataka have to send the SMS code to mobile number 97319 79899. Know how to use this SMS facility to manage eway bills.

Android-enabled Application is also developed for Eway bills. API integration with your ERP is also in the offering as it helps businessmen seamlessly integrate their billing software to the Government portal to comply Eway bill rules.    

For further reading on the Eway bills implemetation, check out:

• Whether Eway bills are required in Uttar Pradesh
• How to modify, reject or cancel Eway bills