The government has changed e-way bill rules which are expected to help e-commerce companies in the smooth transportation of goods and ease the method of calculating the value of goods.
The government has notified changes in rules of e-way bill which includes permitting even job workers to generate the electronic receipt for movement of goods. Electronic way or e-way bill will be required from April 1 for transporting goods valued over Rs 50,000 between states.
In a major relief to FMCG companies, the government has allowed businesses to consider only the value of taxable supply for the purpose of generating e-way bill in cases where sales invoice includes both exempted and taxable supply of goods. This would mean that if food products which are subject to GST are being sent along with items which are exempt from the tax, say milk, then only the value of food products shall be considered for e-way bill.
Besides, to help smaller businesses operate within a particular state, it has said that vehicle details will not be required in case of movement of goods up to 50 kms between the consignor/ consignee and transporter's place. The limit was 10 km earlier, said tax consultancy firm PWC.
Also, it has done away with the requirement to produce e-way bill for intra-state movement of goods by road in cases where value of each consignment is less than Rs 50,000 but aggregate consignment value in the vehicle is more than Rs 50,000.
"This is a major relief for courier, e-commerce companies etc. and will reduce the paperwork substantially. The Government should consider extending this relief to inter-state consignments as well," PWC said.
As per the amendments, the validity of e-way bill will now be till the midnight of the day immediately following the date of generation of e-way bill, instead of 24 hours earlier. For example, if an e-way bill is generated at 3 pm on March 8th, 2018 for a movement within 100 kms., the validity period of one day shall be counted till midnight of March 9th, 2018. Earlier, the e-way bill would have been valid till 3 pm of March 9th, 2018. "Therefore, in most cases, the industry will get more than 24 hours for the first 100 km of shipment," PwC said.
As per the changes in the rules, in addition to principal manufacturer/ brand owner, the job worker can also generate e-way bill in case of inter-state movement of goods to job worker irrespective of the consignment value. Earlier only the principal manufacturer could only issue the e-way bill.
"With these changes, E-way bill rules have become much simpler than earlier. The timing of these changes suggests that Government is keen to implement the e way system from April 1, 2018, as indicated recently," said Pratik Jain, Partner and Leader Indirect Tax, PwC.
AMRG & Associates Partner Rajat Mohan said one of the finest changes brought about by the government is an option given to taxpayers, who can now authorize transporters to generate E-way bills on their behalf. "This provision will be a win-win situation, as first this would promote ease of doing business for taxpayers," he said.