Impact of Eway Bill on E-Commerce Operators

The e-commerce industry's expansion depends on logistics, which is also becoming increasingly important as a differentiator in terms of operational efficiency and client satisfaction.

Effect of E-way Bill rules on E-Commerce businesses

While many e-commerce businesses have collaborated with logistic service providers to meet their business demands, some players have built their own internal logistics infrastructure. While internal logistics businesses dominate roughly 50% of the market, the remaining 50% is controlled by third-party logistics service providers, including e-commerce-focused providers, India Post, and conventional Logistics Service Providers.

What logistics strategies are being used by e-commerce retailers?

Internal logistical capabilities: The internal divisions of the e-commerce platform offer substantial volumes, some of which also provide similar services to other e-commerce retailers.

Traditional LSPs (logistics service providers) have entered the delivery market for the retail e-commerce industry. Due to their reach, established network, knowledge, and experience in providing logistics services across India, these service providers have an advantage.

E-commerce-centric LSPs (logistics service providers) have emerged in the past three to four years in response to the explosive growth of the retail e-commerce industry, and they currently account for around 50% of the market. These service providers' improved customer service, a wide range of product offerings, investments in technology infrastructure, capacity for fast cash reimbursements, and competitive pricing largely allow them to do this.

A brief history of Way bill

Before the introduction of the GST, way bills were necessary to facilitate the supply of commodities. Physical documentation, known as waybills, were received from the VAT authorities. Waybills hindered and obstructed the movement and delivery of products across states because of their complexity and compliance requirements. Due to the structure's complexity, the transportation sector ultimately spent 30–60% of its time and resources on tax compliance, with 16% of that time being used by trucks to line up at interstate checkpoints for inspection and tracking.

Rules for E-Way Bills

E-way bills generated by a consignor or the consignee are required when transportation is made by hired, personal, or commercial aircraft, trains, or ships. If a transporter road transports the items, the transporter must produce the E-way bill. If neither the consignor nor the consignee generates an e-way bill and the value of the items exceeds Rs 50,000, it is the transporter's responsibility to do so. You can learn more about E-way bills in our detailed guide here.

Details to be provided before the commencement of the goods transportation and the generation of an e-way bill

1. Registered individuals who are in charge of transporting commodities whose consignment value exceeds Rs. 50,000 —

   1. With regard to the supply of products; or

   2. For purposes other than the supply of goods; or

   3. Due to the inbound supply of goods from the unregistered person, one should electronically submit information about those products on the common portal in Part A of form GST INS-01 before starting the movement.

      1. When a registered person uses their own or a leased vehicle to transport goods as the consignor or recipient of the supply as the consignee, they can electronically generate an e-way bill in Form GST INS-1 by giving the information needed in Part B of Form GST INS-01; or

      2. When an e-way bill isn't issued under clause (a), and goods need to be transported, the registered person should upload information about the transporter in Part B of the GST INS-01 form to the common portal, and the transporter should then generate an e-way bill using the data in Part A of the GST INS-01 form.

2. The supplier, the carrier, and the recipient will have access to a specific EBN (e-way bill number) on the common site after the e-way bill has been generated. 

3. A transporter moving goods from one conveyance to another during transit must generate a new e-way bill in FORM GST INS-01 on the GST portal by providing the mode of transportation before the transfer and any future movement of the goods.

4. Before transferring the goods, the transporter must electronically indicate the serial number of each of the e-way bills for each consignment that will be transported in a single conveyance on the common portal and create a consolidated e-way bill in form GST INS-02 on the common portal:

If the consignor hasn't generated the FORM GST INS-01 as required by the rules and the value of the goods being shipped in the transport exceeds Rs. 50,000, the transporter must generate the FORM GST INS-01 depending on the supply bill, the invoice, or the delivery challan and also generate the consolidated e-way bill on the GST portal in FORM GST INS-02.

5. A registered supplier could use the common portal to access the information provided in Part A of GST INS-01 and use it to provide the information in GSTR-1:

If an email address or mobile number is provided when the unregistered provider provides the information in GST INS-01, the unregistered will be notified electronically.

6. The e-way bill may be electronically cancelled on the common portal within 24 hours after e-way bill generation if the goods are not transported or are not transported following the details specified in the e-way bill when the e-way bill is issued per this regulation.

If the e-way bill has been verified in transit in keeping with the provisions of the rules established, the e-way bill cannot be cancelled.

Documents to be carried by the transporter

1. The person in charge of the vehicle should have —

• A bill of supply, delivery challan, or invoice, and

• A physical or digital copy of the RFID (Radio Frequency Identification Device) embedded on the conveyance or the e-way bill number.

2. By uploading the tax invoice he generated in GST INV-1 on the relevant portal and providing that for approval by an appropriate officer of the tax invoice, the registered person can receive the invoice reference number from the GST portal. The invoice reference number would be valid for 30 days following the upload date.

3. When a registered person uploads an invoice under rule (1), the common portal will automatically fill out Part A of the GST INS-01 form with the data from the GST INV-1 form.

4. By notification, the Commissioner may require a class of transporters to obtain the specific Radio Frequency Identification Device, embed it on the conveyance, and map the e-way bill to the RFID before transferring the goods. In certain situations, the Commissioner may request in writing that the person in charge of the conveyance take with him instead of the e-way bill the following documents:

   1. A bill of supply, bill of entry, or tax invoice;

   2. A delivery challan is if products are transported differently than the supply.

Verifying documents and conveyances

1. For all intrastate and interstate movements of goods, the Commissioner, or the officer designated by the Commissioner with this authority, may allow the officer to intercept any transportation to validate the presence of an e-way bill or an e-way bill number in the physical form.

2. The Commissioner must install RFID readers where it is necessary to verify the movement of products, and the movement of vehicles should be verified using RFID readers where the RFID on the e-way bill is mapped.

3. The proper officers, as approved by the commissioner or the officers given this authority by the commissioner, would carry out the physical verification of the conveyances:

As long as the officer receives the necessary consent from the Commissioner or the officers designated on this behalf, physical verification of the conveyance may also be carried out by the officer upon receipt of explicit information about tax evasion.

Verifying and inspecting the goods

1. A proper officer must submit an online summary report for each inspection of goods in transit in Part A of the GST INS - 03 form within 24 hours of the inspection and a full report in Part B within three days of the inspection.

2. Unless specific information regarding tax evasion is later received, there won't be any additional physical verification of the goods being transported on the conveyance in the State after physical verification of the goods was conducted during transit at a particular location within a State or in another State.

The ability to upload data related to the vehicle's detention

When a vehicle is stopped and detained for longer than thirty minutes, the transporter may upload the relevant information in FORM GST INS- 04 to the common site.