Compliance Requirement for E-Way Bill By Manufacturers
One of the main gainers from implementing GST was the manufacturing sector. The lead time for the transit of products into and out of states has been shortened by removing checkpoints at state borders. This enhanced the productivity of Manufacturers. The factories of manufacturing enterprises are often concentrated in a few places, whereas the branch and field offices are dispersed throughout the country. Additionally, some businesses employ Job Workers for some or all of the manufacturing procedures.
In this article, we will explore the E-Way Bill Requirements for manufacturers, including e-way bills for job work as well as other cases.
BOOK A FREE DEMO
E-Way Bill Requirements and Job Work
Job work is a term used for someone other than the manufacturer who has contributed to the manufacturing procedures. Following are the stages in manufacturing where a job worker can contribute:
- The initial stage of processing raw materials
- Processing semi-finished goods
- Packaging finished goods
- Assembling goods
- Any additional procedure to help the Manufacturer produce the finished goods
Scenarios where goods might be transported to or from a job worker include:
- Inputs Sent by the Principal to a Job Worker or Vice-Versa.
- Inputs That a Principal Receives Upon the Completion of the Work
- Finished Products Sent by the Job Worker Directly to the Customer
Given below are the E-way Bill Requirements in each of these scenarios:
Get a Free Trial – Best Accounting Software For Small Business
E-Way Bill Requirements For Branch Transfer
An e-way bill is required for branch transfers by the manufacturer when the taxable value of the goods being transferred exceeds INR 50,000. The manufacturer must indicate this transfer as a stock transfer while generating the e-way bill. For stock transfers, a GST invoice is not applicable, and instead, a delivery challan should be generated.
E-way Bill Requirements for Inputs Sent by the Principal to a Job Worker or Vice-Versa
If the principal and the job worker are located in different states, the principal is required to generate an e-way bill. The threshold restriction of Rs. 50,000 does not apply in this case, so the principal must produce the e-way bill even if the value of the products sent to the job worker does not exceed Rs. 50,000.
When products are delivered to customers directly from a job worker’s place of business, one of the two E-way Bill Requirements mentioned below becomes mandatory:
- Either the principal needs to declare the job worker’s location as his additional place of business, or
- The job worker needs to be registered under section 25.
In this instance as well, if the job worker is registered on the portal, they would be required to submit an E-way bill, and in case they are not registered, the e-way bill needs to be generated by the principal.
Get a Free Demo – Best Billing and Invoicing Software
E-way Bill Requirements for Inputs That a Principal Receives Upon the Completion of the Work
After a job worker finishes the goods, the principal may either accept the finished goods back or request that the job worker deliver the finished goods straight to the consumers. If the job worker is already registered on the e-way bill portal, the job worker will generate the e-way bill for the transportation of goods; otherwise, the respective principal will need to comply with the E-way Bill Requirements.
E-way Bill Requirements for Finished products sent by the job worker directly to the customer
When products are delivered to customers directly from a job worker’s place of business, it is necessary that:
- The principal must either identify the job worker’s location as his additional place of business
- The job worker must be registered under section 25.
In this instance, if the employee is registered on the portal, they would be required to submit an E-way bill by the principal.
What Documents are Required Before Sending the Goods to a Job Worker?
There is no need to send a tax invoice if the goods are delivered to a job worker. For these goods, a delivery challan (DC) must be provided. The DC would include the following information:
- Number and date of the delivery challan.
- Name, GSTIN, and address of the consignor and the job worker. If the consignor and the job worker are registered under GST, then the GSTIN must be mentioned.
- HSN code and the description of the goods.
- Quantities of the goods supplied.
- Value of the goods, including taxes.
- Rate and amount of the tax.
- Place of supply.
- Signature.
E-way Bill Requirements for Supply of Liquid Gas
An e-way bill must be generated for the supply of liquid gas when the quantity transported from the supplier’s location is unknown. Additionally, a delivery challan must be supplied by the provider and carried by the transporter. If transportation has been outsourced to a third party, the transporter needs to be the one to issue the delivery challan.
E-way Bill Requirements for Supply on an Approval Basis
Goods that have been supplied on an approval basis can be transported from a registered supplier’s place of business to any other place within or outside the state with a DC (delivery challan) and, where needed, an Eway bill. An invoice can be provided when the goods have been delivered. If and when the buyer agrees to buy the product, the person can issue an invoice
Explore a Free Demo of – Best Inventory Management Software For Small Business
E-way Bill Requirements for Sub-user Facility
For every shipment with a value greater than Rs. 50,000, an e-way bill must be generated. Numerous manufacturers operate from multiple locations, many of which have branch offices. It could be complicated to generate the e-way bill with a single login from multiple locations.
The sub-user concept is presented as a solution to this problem. A sub-user could enter in with the original login information and perform according to the permissions granted to them. A sub-user might, for example, be permitted to generate the e-way bill but prohibited from rejecting any e-way bill. The registered person must, however, provide their address correctly on the e-way bill to fulfil E-way Bill Requirements.
Explore a Free Demo of – Automated E-invoice Software for Easy Compliance
Conclusion
Pre-GST regulations called for a staggering quantity of paperwork, which needed a lot of human interaction, which increased the likelihood of corruption and tax evasion. The maker (supply), the transporter, and the recipient would all be on the same platform when the eWay Bill was implemented, and with their combined efforts, a single document would accompany all of the consignments and be accepted across the entire nation. BUSY accounting software makes the generation of e-way bills seamless.
I am a chartered accountant with over 14 years of experience. I understand income tax, GST, and balancing financial records. I analyze financial statements and tax codes effectively. However, I also have a passion for writing, which is different from working with numbers. Recently, I started writing articles and blog posts. My goal is to make finance easier for everyday people to understand.
Frequently Asked Questions
- What is an e-way bill, and why is it important for manufacturers?An e-way bill is a document required for transporting goods worth over a certain amount. For manufacturers, it ensures compliance with GST regulations, enabling smooth interstate and intrastate movement of goods while reducing tax evasion risks.
- Who is required to generate an e-way bill in the manufacturing industry?Manufacturers moving goods worth over a specified limit are required to generate an e-way bill. This applies when transporting goods either interstate or intrastate, ensuring compliance with GST laws and aiding tax authorities in tracking movement.
- What are the compliance requirements for manufacturers when generating an e-way bill?Manufacturers must provide details like the shipment’s value, vehicle number, and transporter ID when generating an e-way bill. They must ensure accuracy and retain records for audits, maintaining compliance with GST rules.
- Is an e-way bill required for intra-state transportation by manufacturers?An e-way bill may be required for intra-state transport, depending on state rules and shipment value. Some states have specific exemptions, so manufacturers should check local regulations before shipment.
- What are the penalties for manufacturers who fail to comply with e-way bill requirements?Non-compliance with e-way bill requirements can result in penalties, including fines of up to ₹10,000, seizure of goods, and additional fines based on the tax involved. Compliance ensures smooth goods transport without penalties.
- Can manufacturers amend details on an e-way bill after generation?Manufacturers can only update limited details, like the vehicle number, on an e-way bill after generation. Other details, like product or recipient information, cannot be amended, so accuracy is important at the time of creation.
