E-way Bills for Imports and Exports

India plays a major role in the global import and export market, with a thriving economy dependent on international trade. Entities engaged in import and export activities must comply with the E-way bill regulations under the GST Act. E-way bills are required for intra-state and interstate transportation of goods valued at more than Rs 50,000. One of the key elements of an economy is its imports and exports, which affect foreign exchange income.

When we talk about the movement of goods, we should also pay attention to the goods that are moved during import and export processes, as well as the need for e-way bills in those instances.

Under the GST Act, import and export are made clear. Exporting commodities from India to another country is known as export, whereas importing goods implies bringing them into India. The IGST will also apply to any imported products following the IGST Law as it will be considered an interstate supply. Exports will not be taxed as they are regarded as zero-rated supplies.

What Import and Export Transactions are E-way Bills Applicable to?

As import is classified as an interstate transaction, it is important to consider the relevance of e-way bills to such transactions. Therefore, let us explore the circumstances in which these bills are applicable and must be generated.

The stages of an Import process are as follows:

1. Goods are only said to be imported when they reach an Indian port or airport.
2. The customs department receives the products at the port or airport and transports them to an Inland Container Depot (ICD) or a Container Freight Station (CFS) for clearance. Rule 138 does not apply to this conveyance, i.e., the transit described above.
3. From the ICD or CFS, the bill of entry is submitted, the importer pays the customs duty, and the items are cleared for domestic use (e.g. place of business like the factory or warehouse of the importer). For this transportation, an e-way bill is necessary.
4. The products may also be held in a bonded warehouse until they are approved for domestic use. The necessity of carrying an e-way bill is waived for the transit of goods in accordance with or from the ICD to the bonded warehouse. However, an e-way bill must be created when the products are cleared from the bonded warehouse and delivered later to the importer’s location.

The process of Exporting includes:

Generating an e-way bill for export is necessary for transporting goods from a business location to an exporter’s warehouse. However, when these goods are subsequently moved to an ICD or a CFS, no export e-way bill is required. It should be noted that certain items such as petrol, diesel, and kerosene are exempt from e-way bill generation.

Additionally, GST e-way bills are not required in the following situations:

1. When goods are transported to or from Nepal/Bhutan
2. When goods are moved between custom ports/ICDs or CFS.

The following table shows depicts when generating an e-way bill is required and not in the case of import and export:

How Can an E-way Bill for Imports and Exports be Generated?

Whether it is an import or an export transaction, the process and methods for generating the e-way bill remain the same. However, the user needs to be mindful of the following important information while creating an e-way bill in such cases:

A key element in determining the validity of an e-way bill is calculating the distance to be travelled. Knowing the starting point for distance calculation is essential to determine its legality in import and export scenarios accurately.

1. When importing, the e-way bill must be generated when the goods are approved for domestic use. The distance between the ICD and the importer’s place of business must be assessed, and the validity of the e-way bill must be determined accordingly.
2. If the items are being exported, the e-way bill must be generated when transported to the port. The distance shall be determined from the warehouse/place of business to the port for the purpose of e-way bill validity.

Do High Seas Sales Require an E-way Bill?

As the high sea sale occurs outside the Indian territory and does not fall under any of the above cases, generating an e-way bill is not required. The government aims to reduce the compliance burden on businesses engaged in international trade. Importers and exports and streamline the process by ensuring that all other relevant documents, such as shipping documents and bills of entry, are in order and valid e-way bills are available when necessary. 

Conclusion

E-way bills are essential to the import and export process, providing a reliable way to track goods as they move across different locations. By generating e-way bills accurately and in a timely manner, businesses can ensure compliance with legal regulations, streamline their operations, and enhance overall efficiency. As e-way bills are progressively improving, it is important for businesses engaged in international trade to stay informed and updated on any changes or new requirements to maximise their benefits and avoid potential pitfalls.