Logistical speed-breakers could cost an economy several billion dollars annually, as a study conducted by McKinsey. Therefore, a change in the system which brings even small benefits should be welcomed. For manufacturing companies, seamless shipments spark returns and profits.
With the roll-out of Eway Bill, it is expected that a lot of bottlenecks would be eliminated from the compliance as well as operational front bringing transparency and seamless the movement of goods both within and across states.
Eway Bill would reduce the amount of time which is wasted at the state borders for validating the documents relating to interstate goods movement. Eway bill would offer simplicity and standardization as each state previously had their own declaration forms, waybills, and permits which were a deterrent to businesses daring to grow beyond the home states.
Eway Bill and Job Work
Job work forms an integral part of manufacturing industry as most of the manufacturing businesses outsource some part of the manufacturing activities. The process of job work could include initial processing, further processing, packing, assembling or such other process of completion.
Specific scenarios which might happen with respect to job work which requires movement of goods–
- Inputs sent by a principal to job worker
- Inputs sent to a job worker directly from a vendor
- Inputs received back by a principal after the job work is done
- Finished goods supplied directly to the end customer from job worker
Inputs sent by Principal to Job worker or vice-versa
In case the principal is situated in a different state, and the principal is sending his goods to the job worker located in some other state, the principal needs to generate Eway bill compulsorily.
Here, the threshold limit of INR 50,000 isn’t applicable; hence even where the value of goods sent out to the job worker doesn’t exceed INR 50,000, the principal needs to generate the Eway bill.
Inputs received back by a principal after the job work is done
Once a job work has finished the goods, the principal could either receive the goods back or could ask job worker to supply such goods to the end customers directly.
In case such job worker is registered on the Eway bill portal, the job worker would generate the Eway bill for such movement of goods, and in case the job worker hasn’t registered himself, the respective principal needs to generate an e-way bill.
Finished goods supplied directly to the end customer from job worker
Where the goods are supplied directly from job worker’s place of business to the end customers, it’s mandatory that:
- Such job worker must be registered under section 25 or,
- Such principal must declare the job worker’s place as his additional place of business.
Here also, in case the job worker has registered himself on the portal, he would issue an Eway bill or such principal needs to issue Ewaye-way bill.
Documents required to be issued prior to sending goods to the Job Worker
In case the goods are sent to a job worker, there isn’t any requirement to issue a tax invoice. However, a delivery challan (DC) is to be issued for such goods.
The DC would contain the following details –
- Number of the DC along with the date,
- Name, GSTIN and address of the principal (consignor) and the Job Worker (consignee). GSTIN is required to be mentioned in case consignor and consignee are registered under the GST.
- HSN code and the description of such goods,
- Quantities of goods supplied
- Taxable Value of such goods
- The rate of tax and amount of tax
- Place of supply
Supply of Liquid Gas
Eway bill is required to be generated for the supply of liquid gas where quantity while removal from supplier’s place of business is not known. Also, a delivery challan (DC) needs to be issued by the supplier and has to be carried by a person who is in charge of the conveyance. In the case where the transportation is outsourced, the transporter needs to issue the delivery challan.
Supply on Approval Basis
As per the circular issued by the government, goods which are supplied on approval basis could be moved from place of business of a registered supplier to any other place within the same State or outside the State with a DC (delivery challan) together with Eway bill wherever relevant and invoice could be issued on delivery of such goods. The person could carry his invoice book and issue invoice as and when the supply is fructified.
Stock Transfer and Branch Transfers
As per the rules laid down with respect to Eway bill, a manufacturer (supplier) is required to generate the Eway bill for stock transfer or branch transfer if the value of such consignment exceeds INR 50,000.
The Eway bill needs to be generated for each and every consignment where the value of such consignment exceeds INR 50,000. There are many manufacturers with branch offices and multiple places of business at various. Generating the Eway Bill from different places with the single login could be a difficult task.
For overcoming this issue the sub-users concept is introduced. A sub-user could use the login credentials which were created originally and execute the actions according to the access provided to them. For instance, a sub-user could be allowed to generate the Eway Bill and could be restricted from rejecting any Eway Bill.
However, the registered person is required to enter address accordingly in Eway bill. He could also create several sub-users and generate e-way bills accordingly.
In the pre-GST era, a mammoth amount of documentation was required which required a lot of human intervention, and with human intervention comes the scope of corruption and tax evasion.
With the roll-out of the eway bill the manufacturer (supplier), the transporter and the recipient would be on a single platform, and with their joint participation, one single document would accompany all the consignments and would be valid throughout the country.