In 2017, the Goods and Service Tax (GST) system streamlined the taxation system in India.
With as many changes in rules and regulations for businesses that were brought about, the most important and useful provision of the CGST Act of 2017 is Section 68.
This article is about understanding section 68 of cgst act 2017 inspection of goods in movement.
Section 68 of the CGST Act gives authorities the power to verify the compliance of goods being transported with GST laws.
If you are a business owner, it’s important to avoid the legal consequences of not following the provisions of Section 68. Keep reading to learn more and make sure you follow the correct procedures to comply with the Act.
Understanding Section 68 of CGST Act (2017) - Inspection of Goods in Movement.
This section involves the person in charge of a conveyance carrying a consignment of goods.
If the goods carried by him or her exceed the specified amount, he or she will need to carry a few documents. This includes:
- Bill of supply
- Delivery challan
- E-way bill
These documents need to be presented to proper officers, who must also be allowed to check the goods.
The most important part of Section 68 of the CGST Act is the provisions related to e-way bills.
Before the movement of any consignment carrying goods, an e-way bill needs to be generated.
In case of a lack of relevant documents, the goods can be detained, seized, or released. Another section of the Act, Section 130, states that goods can be confiscated and penalties can be imposed.
What is an E-way Bill?
Electronic Way Bills (EWB) are often called e-way bills. Under the Goods and Service Tax, an important document that is used to track goods in transit is called an e-way bill.
Any consignment carrying goods over the value of Rs. 50,000 must have an e-way bill. This bill can be generated online, and the steps for generation are written below in this blog.
E-way bills are generated via an online portal, and Ledgers have simplified the management of e-way bills.
GST invoices, bills of supply, purchase invoices and customer or supplier accounts are synced with the Ledgers e-way bill tool. The procedure of transport of goods and services is contained in the bill, making it a vital document.
Eligibility for E-way Bills
Not every transaction needs to have an e-way bill. The only transactions that require an e-way bill are those related to the transportation of goods.
Any person in charge of transporting a consignment exceeding the value of Rs. 50,000 needs to be accompanied by an online-generated e-way bill.
Though, this limit may vary since states have different rules for intra-state transport.
Regardless of whether the goods are related to supply or not, an e-way bill is needed in these conditions.
Documents Needed for an E-way Bill
There are a few things to keep in mind while generating an e-way bill. The e-way bill is usually split into two parts, Part A and Part B.
The form is called FORM GST EWB-01. Part A of the form is related to the details of the goods. On the other hand, Part B of the form is related to conveyance.
The E-way Bill Number (EBN) will be provided once you complete the form. The EBN is sent to the supplier, the transporter, and the recipient, so make sure to keep an eye out for the notification.
If the goods are transported over a distance of 50 kilometres or less, Part B of the form does not need to be filled in. However, the distance must be covered within a state or a union territory.
This journey can be from the location of business of the consignor to the transporter. It can also be from the location of business of the transporter.
The “Consignment Value” in the form is necessary when the value is beyond the threshold limit. An EWB is mandatory in this case.
When the consignment value is calculated, it needs to include GST but exclude the value of exempt supplies. This is mainly in the case of a tax invoice or a bill of supply.
If you are transporting goods from one state or union territory to another, an EWB is required regardless of consignment value.
The principal or job worker can generate the EWB. An EWB is only not required if the applicant is exempt under Section 24(i) and (ii). It is also not applicable if the goods are exempt under Rule 138(14).
If the goods are being transported by a non-motorized vehicle, like via railways, empty cargo containers, or ports, then an EWB is not required.
Non-taxable goods and empty LPG cylinders are also exempt from needing an EWB. The responsibility of procuring the EWB lies solely on the one causing the transport of the goods.
Bill-to-ship-to transactions may involve two journeys but require only one EWB. If you are confused about a Bill-to-ship-to transaction, we are here to help. It involves Person 1 making Person 2 transport goods from Person 1 to Person 3.
If the ship-to-state is different from the bill-to-state, then details of taxes need to be filled into the form. According to the Act, the sole e-way bill can be generated by Person 1 or Person 2.
How to Generate an E-way Bill
An e-way bill is simple to generate and can be done from the comfort of your own home. All you need to do is follow a few steps on your computer.
- The first step is to log into the e-way bill system.
- The second step is to press the “Generate new” option.
- The third step is to fill in the transaction and output type.
- If you are a consignor, then your transaction type would be "outward", and it would be inward if you are a consignee.
- The fourth step is to submit the relevant documents. You can submit either an invoice, a bill challan, a bill of entry, or a credit note.
- The fifth step is to enter the document number or invoice number.
- Enter the required addresses and consignment details as the sixth step.
- The second last step is to enter the transport details.
- Lastly, check for errors and submit the form.
- Remember to download a copy of the form for further proof.
Validity of an E-way Bill
An e-way bill is valid for a period of 24 hours unless it is cancelled within a day of generation. An EWB is valid for 100 kilometres or inter-state transportation of goods.
The limit drops to 20 km in case transport is multimodal. An example of this would be if half of the journey is covered by a ship.
Gist of Section 68
The limit for the value of the consignment value is Rs. 50,000. Beyond this limit, officers can stop the transport vehicle at any point for verification.
Goods can be seized, detained, or released, and you may receive a penalty under one condition. If the goods are removed or supplied in a fashion that violates the provisions of the Act, legal action will be taken.
The law allows leeway in the sense that if the vehicle is held up for over half an hour, the person in charge may fill in the details and download an e-way bill. This is done to ensure accountability, transparency, and trust among citizens.
Officers may inspect the goods or vehicles under the jurisdiction of the Commissioner. Officers may be authorized to inspect the goods or vehicle.
To make this a smooth-sailing process and avoid penalties, an e-way bill needs to accompany the goods.
To conclude, an e-way bill is a necessary document that can be easily generated. It must accompany the consignment of goods along the transport journey.
We hope this article helped you better understand Section 68 cgst act inspection of goods in movement. Reach out to us at Especia if you need further help or have questions.
FAQs Related to Section 68 of CGST Act
1. Can an e-way bill be extended?
The validity of the e-way bill can be extended by 8 hours. The transporter can only do this.
2. Is there a case where EWB can not be generated?
An e-way bill may not be applicable for a generation if GSTR-3B or GSTR-R1 has not been filed in two or more tax periods. In this case, transporting goods is impossible, and GST needs to be filed.
3. What is the penalty for not carrying an e-way bill?
A fine of Rs. 10,000 or the value of tax evaded is levied, depending on which is greater.