Impact Of E-Way Bill On FMCG Sector
The FMCG sector is the fourth largest sector of the Indian economy, consisting of businesses that deal in quickly consumable goods such as milk and dairy products, beverages, cosmetics, and other everyday goods. Due to their perishable nature, these goods must be delivered timely. In 2018, the government introduced the e-way bill system, which significantly impacted the FMCG sector, particularly for small and medium-sized enterprises (SMEs) operating in this sector.
This article discusses the types of FMCG companies and the impact of e-way bills on the FMCG sector.
BOOK A FREE DEMO
Recent Updates on E-way Bill
As of April 2025, the E-way Bill system has been updated to improve compliance and efficiency in goods transportation. A major update is the introduction of 2-Factor Authentication (2FA) for all users generating E-way Bills.
Additionally, E-way Bills must now be generated within 180 days from the invoice date, and their validity cannot exceed 360 days from generation.
For shipments involving both taxable and exempt goods, only the taxable value is used to calculate the E-way Bill requirement. Also, for intra-state movement up to 50 km, vehicle details are no longer mandatory.
Get a Free Trial – Best Accounting Software For Small Business
The Necessity of E-way Bill for FMCG Products
In the FMCG sector, the E-way Bill plays a key role in ensuring the smooth and legal movement of goods. It is mandatory for consignments over ₹50,000, which is common in large-scale FMCG distribution.
Since FMCG includes perishable items like milk, snacks, and ready-to-eat foods, timely deliveries are crucial—and E-way Bills help avoid transport delays.
They also help maintain supply chain transparency, allow better tracking, and ensure that companies stay compliant with GST rules, reducing the risk of penalties and shipment hold-ups.
Get a Free Trial – Best GST Accounting Software For Small Business
E-way Bill Provisions Specific to FMCG Sector
To meet the unique needs of the FMCG sector, the E-way Bill system includes several tailored provisions. Businesses can use the bulk E-way Bill generation feature to handle large numbers of shipments at once.
For local deliveries within 50 km, entering vehicle details is optional, which helps save time.
When FMCG products include both taxable and exempt goods, only the taxable portion is used to check if an E-way Bill is needed. Also, in the case of perishable goods, special provisions may apply to allow shorter validity periods for faster delivery.
Types of FMCG Goods
The FMCG sector works with non-durable goods with a relatively short to medium shelf life and generally of lower value. This sector includes a wide range of products, some of which include:
- Processed foods such as cheese products, cereals, and boxed pasta.
- Prepared meals such as ready-to-eat meals, soups, and fast food.
- Baked goods like bread, cookies, croissants, and bagels.
- Fresh and frozen foods include vegetables, fruits, peas, and carrots.
- Beverages such as bottled water, energy drinks, and juices.
- Over-the-counter medicines like aspirin, pain relievers, and other medicines.
- Cleaning products such as baking soda, oven cleaner, window, and glass cleaner.
- Cosmetics and toiletries include toothpaste, soap, hair oil, and other hair-care products.
- Office supplies like pens, pencils, and markers.
The FMCG sector provides essential products that are designed for everyday use and quick consumption. These products are generally purchased frequently and are readily available at most retail stores.
How Have E-way bills Impacted the FMCG Sector?
The introduction of the e-way bill system by the government has had several positive impacts on the FMCG industry. Here are some advantages the FMCG sector enjoys with the introduction of e-way bill:
- The transportation of goods across state borders has become more seamless and efficient, as the e-way bill has eliminated numerous check-posts and barriers. This is particularly important for the FMCG industry, where the quick and timely transfer of goods is essential due to the short shelf life of the products.
- For FMCG companies, generating an e-way bill is necessary only if the total value of taxable items in a consignment exceeds Rs. 50,000. Since many FMCG products, such as milk, eggs, wheat, rice, etc., are excluded from GST, there is often no need for generating e-way bills.
- E-way bill isn’t required for each good when companies ship multiple goods in bulk as long as the value does not exceed Rs. 50,000, even if the total value of the transport exceeds Rs. 50,000.
- If the distance covered for intra-state transportation is less than 50 km, no e-way bill is required.
- The e-way bill system’s sub-user functionality is particularly advantageous for FMCG companies. It allows them to create a controlled network within the organisation, with a presence in multiple locations across the country. This feature also enables companies to assign different roles to different team members.
- FMCG companies can generate e-way bills in bulk, significantly improving the organisation’s efficiency. For instance, the e-way bill tool can be linked to the company’s ERP software through an API, enabling the automation of the process.
- The government has provided multiple options for generating e-way bills, including SMS, web modules, bulk upload tools, and API integration, making the process more convenient and accessible for FMCG companies.
Challenges and Solutions for FMCG Companies
Challenges:
- Frequent Movements: FMCG goods move quickly across states and cities, requiring constant E-way Bill generation and tracking.
- Bulk Shipments: Handling large volumes daily increases chances of errors in invoice entry and E-way Bill compliance.
- Short Shelf Life: Many FMCG products are perishable, making timely movement and quick E-way Bill processing critical.
- Complex Supply Chains: Involves multiple warehouses, distributors, and retail outlets, leading to logistical complexity.
- Penalty Risk: Any delay, mismatch, or missing E-way Bill can result in hefty fines and detention of goods.
Solutions:
- Use Bulk E-way Bill Generation Tools: Automate creation of multiple E-way Bills to handle high volumes easily.
- Integrated GST Software: Adopt software that connects invoicing with E-way Bill systems for error-free processing.
- Real-Time Tracking: Monitor goods in transit to avoid delays and ensure timely deliveries.
- Staff Training: Regularly train logistics and warehouse teams on the latest E-way Bill rules and updates.
- Pre-Planning Shipments: Plan dispatches with valid invoices and advance E-way Bill generation to avoid last-minute issues.
Conclusion
The introduction of the e-way bill system has brought about several benefits for the FMCG sector in India. Eliminating check posts and barriers has facilitated smoother and faster interstate transportation of goods, which is essential for an industry with short shelf-life goods. Moreover, e-way bills have made the process simple and efficient for FMCG companies.
This, in addition to the sub-user functionality, has enabled companies to create a well-controlled network within their organisation, which has resulted in improved productivity and cost-effectiveness. Overall, implementing the e-way bill system has significantly benefited India’s FMCG industry and paved the way for further growth and development.
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.
