Impact Of E-Way Bill On E-Commerce Operators
E-way bill is a permit generated on the GST portal that is required for the movement of goods worth over Rs. 50,000 within India. This system was introduced to ensure smooth and efficient transportation of goods across the country, and its impact on the e-commerce sector has been significant.
E-commerce operators are among the major users of the e-way bill system, as they rely mostly on the transportation of goods. Implementing the e-way bill has posed challenges and opportunities for e-commerce operators, and its impact on their operations has been the subject of much discussion.
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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 Logistics Capability:
Most e-commerce retailers have built their own internal logistics capabilities to ensure that they have a complete control over their supply chain. This may include managing delivery vehicles, warehouses, and inventory management systems. With these capabilities, e-commerce retailers can ensure greater control over the complete logistics process and provide a better customer experience. - Traditional Logistics Service Providers:
E-commerce retailers partner with traditional logistics service providers, such as courier companies, to handle the last-mile delivery of products to customers. These logistics providers have extensive experience in handling deliveries across different geographies, and their logistics operations expertise helps e-commerce retailers manage inventory and optimise delivery times. - E-commerce-centric Logistics Service Providers:
Demand for e-commerce logistics has been growing, and new logistics providers are emerging that specialise in catering for the unique needs of e-commerce retailers. These providers offer services such as order fulfilment and last-mile delivery, specially tailored to the requirements of e-commerce businesses. By leveraging the expertise of these specialised providers, e-commerce retailers can streamline logistics operations and provide an improved customer experience.
A Brief History of Way Bill
Before implementing GST, waybills were mandatory during the transportation of goods. These waybills were physical documents issued by VAT authorities. However, due to their complexity and compliance requirements, they posed a challenge during the movement and delivery of goods across different states. As a result of this, the transportation industry ended up spending 30-60% of its time and resources on tax compliance, with 16% of that time being utilised by trucks waiting in line at interstate checkpoints for inspection and tracking.
Rules for E-Way Bills
When goods are transported through commercial aircraft, trains, or ships, it is mandatory to generate e-way bills by either the consignor or the consignee. On the other hand, when goods are transported by road, the transporter must produce the e-way bill.
In cases where neither the consignor nor the consignee generates an e-way bill, and the value of the goods being transported exceeds Rs. 50,000, it becomes the transporter’s responsibility to generate the bill.
You can learn more about E-way bills in our comprehensive guide here.
Documents for E-way bill Generation
The person transporting or conveying goods must carry the following documents:
- An invoice, delivery challan, or bill of supply
- Either an e-way bill, the e-way bill number, or an e-way bill linked to RFID embedded in the vehicle transporting the goods.
- An invoice reference number from the common portal. This can be obtained by uploading the tax invoice on the common portal, and its validity is for 30 days from the date of upload.
- Depending on the situation, the commissioner may require the transporter to carry a physical copy of the tax invoice, bill of entry, or bill of supply.
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Verifying Documents and Conveyances
- 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.
- 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.
- 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
- 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.
- 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.
Also Know About – GST Composition Scheme
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.
Impact of Eway Bill Implementation on E-Commerce Operators
The Eway bill is a crucial part of the GST system. Before items are moved to another state, the document must be generated. Here is the impact on e-commerce operators.
Conclusion
The e-way bill system has significantly impacted e-commerce operators in India, bringing in greater accountability and efficiency in the movement of goods. While the system has required e-commerce businesses to adapt and comply with the regulations, it has also reduced transit times and streamlined processes. The e-way bill system has helped to create a level playing field for e-commerce and traditional businesses, ensuring transparency in the supply chain and promoting fair competition.
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.
Frequently Asked Questions
- How has the implementation of the E-Way Bill affected logistics for e-commerce businesses?The E-Way Bill has streamlined the movement of goods by improving transparency and reducing delays caused by checkpoints. However, it has added compliance challenges for businesses to ensure timely generation and validation of bills for every shipment.
- What are the compliance requirements for e-commerce operators under the E-Way Bill system?E-commerce operators must ensure sellers generate E-Way Bills for taxable goods exceeding specified limits. They must verify seller compliance and maintain proper records for all consignments transported through their platform.
- How does the E-Way Bill impact interstate and intrastate movement of goods for e-commerce?The E-Way Bill applies to both interstate and intrastate goods movement. It simplifies logistics by providing a unified system but requires businesses to manage additional documentation for smooth transportation across states.
- Are e-commerce operators liable for E-Way Bill generation, or is it the responsibility of sellers?Sellers are generally responsible for generating E-Way Bills for their goods. However, e-commerce operators may need to assist or monitor compliance, especially if they manage logistics on behalf of sellers.
- What role do e-commerce platforms play in ensuring E-Way Bill compliance for their sellers?E-commerce platforms must educate sellers on compliance, provide tools for E-Way Bill generation, and enforce rules to prevent shipments without proper documentation, ensuring smooth operations and legal adherence.
- How has the E-Way Bill impacted delivery timelines and operational efficiency in e-commerce?The E-Way Bill reduces delays at checkpoints, improving delivery speed. However, delays in bill generation or errors in documentation can negatively impact timelines, requiring efficient systems for better operational flow.
- What penalties do e-commerce operators face for non-compliance with the E-Way Bill system?Non-compliance can result in penalties, including fines, seizure of goods, and vehicle detention. Operators may also face reputational damage, emphasizing the need for strict adherence to E-Way Bill requirements.
- How does the E-Way Bill influence inventory management and order fulfillment in e-commerce?Accurate E-Way Bill compliance ensures better tracking of goods in transit, aiding inventory management and timely order fulfillment. Non-compliance can lead to shipment delays, disrupting stock availability and customer satisfaction.
- Are there exemptions to the E-Way Bill requirement for certain goods sold through e-commerce?Yes, exemptions exist for specific goods, such as those of low value or certain types of perishable items. It is essential to check the government’s list of exempted goods to determine applicability.
