Impact of E-Way Bill on FMCG Sector

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Date: 28 Dec 2022


Impact of E-way Bill on the FMCG sector 

 

With a staggering size of around INR 500 billion, the FMCG sector in India represents one of the most significant portions of the economy. Many commonly used consumer items, such as dairy products, soaps, soft beverages, confectionery, fruits, and vegetables, are frequently found in the fast-moving consumer goods sector. In more detail, let's examine the e-way bill's function in the FMCG industry.

 

The effectiveness of the supply chain is crucial in the FMCG industry. Due to the intense rivalry in India's FMCG industry and its complicated distribution system, companies are constantly working to innovate their supply chains. Better supply chain management would benefit businesses, while inefficient supply chain management would make it challenging for businesses to survive in this cutthroat market.

Complex tax arrangements and convoluted distribution setup

There are multiple layers of small merchants in India's FMCG industry's intricate distribution network between the corporation and the final customer. Securing the availability of goods at the last step of distribution becomes a nightmare for businesses as the number of stock-keeping Units (SKU) grows tremendously. The situation is made worse by India's complicated tax system. Gray markets emerge due to the nation's diverse municipal tax laws encouraging businesspeople to engage in the interstate smuggling of goods.

 

In addition, due to tax on interstate sales, businesses must first move their products to state-level warehouses on a consignment basis before distributing them to final customers. With the implementation of the GST and e-way bill, the complexity of the interstate supply of goods would be harmonised, and FMCG companies would experience improvements in the management of their supply chains.

 

E-way Bill RollOut

The Union Government has mandated using e-way bills for transporters moving products worth more than INR 50,000 between states to keep up with tax reforms. A single e-way bill for many deliveries made during the same trip could be produced to ease the load on e-commerce enterprises. Implementing the e-way law would increase efficiency and transparency in the movement of commodities across states. The WEP platform will be available to organised sectors like FMCG, Pharma, Infrastructure, Manufacturing, etc., with features like ERP integration, centralised management for multiple locations and organisations, and bulk EWB generation for a dependable, quick, and simple e-way bill generation facility.

 

E-way bills can be created using various tools, including the web, SMS, Android app, bulk upload tool, and API-based site-to-site connectivity. Transporters can create numerous sub-users and assign them different roles. It allowed the big transporters to list their many offices as sub-users. Additionally, the e-way bill may be cancelled by the person who generated it within 24 hours of its validity.

 

E-way bills are also subject to rejection by the recipient within 72 hours of the consignor's creation, whichever comes first. The new regulations stipulate that an e-way bill is unnecessary for any intra-state transportation of goods by road when the value of each consignment does not exceed INR 50,000 but surpasses INR 50,000 overall.

Recent Updates on E-way Bill

The Union Government modified the e-way bill regulations, which will aid FMCG companies in the efficient flow of goods and make determining the worth of commodities simpler. The Union government has made it possible for firms to evaluate the value of taxable supplies when creating e-way bills when the sales invoice includes both exempt and taxable supplies of products, which is a significant relief for FMCG companies.

 

It suggests that just the value of the food products should be considered for the e-way bill of goods that are exempt from GST, such as milk, are shipped along with food items that are subject to GST. Additionally, for the benefit of local enterprises, vehicle information will be optional for transporting goods up to 50 miles. According to subsequent changes, the e-way bill's validity will now last until midnight on the day that follows the date it was generated.

Bulk Generation Facility

When the e-way bill's trial implementation was started, the portal witnessed the daily generation of more than 2 lakh e-way bills. It is understandable, given that businesses need to produce a lot of e-way bills. Big company houses or logistic operators who ship several shipments throughout the nation daily would prefer a time-saving and easy system where they could create the e-way bills they need or update the vehicle information by uploading a single file. It is made feasible via the e-way bills portal's bulk-generating feature. The user can use this option to create multiple e-way bills, amend multiple e-way bills, or merge several e-way bills with a single upload.

Sub-User Facility

Several stakeholders oversee a firm's operations, including procurement, sales, and operations. The case of the e-way bill is typical. Some taxpayers may need to generate e-way bills from multiple locations where their businesses are operated, or they may need to generate a vast number of e-way bills during different time shifts, or they may even need to create several e-way bills at the same time, all of which would require additional resources for its execution. To address this, the e-way bill portal gives businesses access to a feature that allows them to create many e-way bill sub-users quickly, assign them roles, and manage all of the sub-users that have access to a portal.

E-way Bill API Interface

The e-way bill team would provide the API interface with the e-way bill system. Carriers or taxpayers can use this API to generate the e-way bill online if they have automated systems. The transporters and taxpayers could connect the automated system to the EWB system to generate, update, and extract data related to their e-way bills using the API interface. The following advantages are provided through the API interface to taxpayers or transporters:

  • One way to prevent double billing or duplication invoicing

  • The possibility of errors when creating the e-way bill exists.

  • A taxpayer cannot connect an e-way bill to an invoice number in the system via the manual approach.

 

Once a taxpayer uses this API interface, his computerised system automatically enters the e-way bill number and invoice details.