E-way Bill under GST in Karnataka  

Karnataka is among the first States to adopt and enforce the e-way bill system under the GST, effective from September 25, 2017. With rare exclusions, traders and transporters carrying goods within and outside Karnataka must produce e-way bills when the consignment's value exceeds Rs. 50,000. 

An overview of "e-SUGAM" - common during the VAT era

A seller or dealer had to establish an online transit document before implementing GST to move goods worth more than Rs 20,000 both within Karnataka and into and out of Karnataka. The document was known as e-SUGAM. To establish e-SUGAMs online, any dealer must first register on the shared portal at http://sugam.kar.nic.in.

To use the online system, each dealer had to log in using a particular username and password given to them by the Department. The dealer's registered mobile number might generate these documents through SMS. The name of this system was "m-Governance Mobile based Sugam."

Each e-SUGAM that was developed received a particular identification number. At the checkpoint, this number was made the transport vehicle's passport. The transporter had to provide the check-post officer with the e-SUGAM number (CPO). The CPO checked it against the genuine products being transported compared to the details shown by the system and then entered his approval in the system. The officer entered his comments into the system and then took the appropriate legal action if there was any discrepancy.

This procedure was praised and won numerous awards since it ensured that the dealers accurately reported the sales and increased tax compliance. This approach upheld self-declaration over departmental policing. This approach is also used by the current E-way bill system under GST, extending its application throughout the nation and enabling recipients and transporters to participate in the process. Therefore, there are few conceptual differences between the current and prior systems.

C-forms- must they still be given for products leaving the State?

In addition to e-SUGAM, the C-form system was also widely used. The Taxation Laws (Amendment) Act 2017 revised the CST Act of 1956, a national statute. Even though CST was incorporated into GST, some non-GST commodities are still subject to this tax.

According to this Act, 2% of the price of the items covered by it that are bought outside the State may be taxed. For this reason, a C-form was required. Following the change, the scope of Section 2(d), which specified goods, has been condensed to include only:

• Oil-based crude (petroleum)

• High-speed diesel

• Motor spirit (commonly known as petrol)

• Natural gas

• Aviation turbine fuel

• Alcoholic liquor for human consumption

C-forms can still be issued for the products as mentioned earlier as of July 1, 2017, but only for the following transactions:

• Resale

• Utilize in production or processing

• Use in mining, the telecommunications network, the production or distribution of electricity, or any other power-related activity.

Does the movement of products inside, into, and out of Karnataka require an E-way bill?

E-way bills are only necessary for interstate transportation of products as of April 1, 2018. Since the State announced the deployment of the e-way bill system with effect from September 6, 2017, e-way bills are now required to be generated to move goods within the State.

There has been no additional word regarding any deferral of the implementation. Even though other States are still in a trial stage that lasts through April 15, 2018, among the few States actively encouraging its residents to use the e-way bill system is Karnataka.

The Karnataka Government is yet to release a new notification to put the recently amended law into effect because the previous notification was issued quite some time ago. However, the e-way bill rules have recently been amended. The official website is https://ewaybillgst.gov.in.

Situations where E-way bills are not necessary

The most recent changes to the e-way bill regulations, effective March 7, 2018, exempt some products and transactions from the requirement. The following items are excluded from the creation of e-way bills:

• Jewelry, goods made by gold- and silversmiths, and other items

• Pearls, whether natural or cultured, valuable or semi-precious stones and precious metals and metals covered in precious metal.

• Currency

• Used objects for the home and person

• The Postal Department of Posts transports mail.

• Kerosene sold with a PDS

• LPG for supply to exempt customers in the domestic and non-domestic sectors

• Coral, both worked and unworked (0508) (9601)

Some transactions don't require E-Way bills, including:

1. Transporting goods with non-motorized vehicles such as push carts and animal-pulled carts

2. Where the transfer of empty freight containers takes place. For instance, moving trucks or carriers.

3. When the shipment is transit freight from or to Bhutan or Nepal

4. For moving items such as alcoholic beverages intended for human consumption, crude oil, high-speed diesel, motor spirit (also known as gasoline), natural gas, or aviation turbine fuel.

5. Transactions that, according to Schedule III of the Act, do not constitute a supply. To view the complete list, please visit our blog on the Eway bill requirements and their compliance.

How to sign up and start producing E-way bills?

Everyone who needs to utilize e-way bills must register once on the main e-way bill portal. For transporters who are GST taxpayers: Users must access the Eway bill portal, click "E-Way Registration" on the homepage tab, and then adhere to the instructions to complete the registration process. After completing this, the user will receive a particular user ID for accessing the portal.

The market for transporters who are not GST-registered is fragmented. Consequently, there are a lot of small and medium-sized enterprises in this industry. On average, 4-5 vehicles are used by these companies to operate. In most cases, their average turnover would also be below the qualifying criterion for GST registration. Section 35(2) of the CGST Act states that these transporters must register on the e-way bill platform.

The market for transporters who are not GST-registered is fragmented. Consequently, there are a lot of small and medium-sized enterprises in this industry. On average, 4-5 vehicles are used by these companies to operate. In most cases, their average turnover would also be below the qualifying criterion for GST registration. Section 35(2) of the CGST Act states that these transporters must register on the e-way bill platform.

Who should produce E-way bills and when?

Only when the value of the consignment exceeds Rs. 50,000 must the person in charge of the vehicle carrying the shipment of goods carry an e-way bill.

When calculating the value of the shipment, the following factors should be taken into account- 

When a bill is produced for both a taxable and an exempt supply, it includes the IGST or the CGST and SGST, depending on the situation, but excludes the value of the exempt supply of goods transported. An e-way bill, which must be carried by the person in charge of the consignment of goods for delivery to the buyer's location and be in either physical or electronic form, must be created by the seller before transferring items.

Other situations when e-way bills must be produced include the following:

When purchasing goods from an unregistered seller—the transporters—and having them transported by road in a vehicle with multiple orders, even when each order or invoice is less than Rs. 50,000, the recipient, buyer, or consignee, depending on the situation, must produce an e-way bill. First, e-way bills (EWB-01) must be created against individual Invoices, and then a consolidated e-way bill (EWB-02) must be designed for the consignment.

Various techniques for producing E-way bills

The everyday e-way bills portal allows users to produce e-way bills online. Discover how to create e-way bills online in detail. Additionally, SMS can be used to develop and manage the same. Users of Karnataka's e-way bill must text the code to the cellphone number 97319 79899. Learn how to manage your e-way bills by using this SMS feature.

Android-enabled Applications for e-way bills are also being developed. The package includes API integration with your ERP, which enables business owners to easily connect their billing software to the government portal to comply with e-way bill regulations.