Rule 138 discusses in details when an e-way bill is required and the same Rule notes the scenarios when there is no e-way bill required. Sub-rule 14 has 14 conditions where no e-way bill is required to be generated. From a business operation perspective, you should assume generally that when the value of the supply is greater than 50,000 an e-way bill is required these are important carveouts to consider. One of the most important of these is when the goods or services are exempt from the GST.
Situation 1 – Specified goods
The Annexure to Rule 138(14) lists 8 classes of items where no e-way bill is required. The first is LPG for households and NDEC customers – this is done to reduce the burden on those deliveries. A similar rationale exists for the second situation a supply of kerosene oil sold under PDS. The third situation is the transport of Postal Baggage by the Department of Posts. The fourth and fifth situation is the movement of specified items in HS Chapter 71.
- Natural or cultured pearls
- Precious or semi-precious stones
- Precious metals and metals clad with precious metals
- Goldsmiths’ and silversmiths’ wares
The sixth instance is the movement of currency which does not require an e-way bill. The seventh instance is used personal and household effects so when you shift between a location you and the transporters are not required to issue e-way bills. Finally coral which is worked or unworked does not require an e-way bill.
Situation 2 – non-motorized conveyance
When the goods are moving on a vehicle which is not motorized then there is no e-way bill requirement.
Situation 3 – Customs clearance
When goods move from a customs port, airport, air cargo complex and land customs station to an inland container depot or container freight station for clearance by Customs then no e-way bill is required. In this instance there is an e-way bill which could cover the importation of the goods to the clearing customs station. The interim port does not intervene here.
Situation 4 – Specified Areas Notified to not require e-way bill
Under Union Territory Tax Notification 2, 3, 4, 5 and 6 all dated 31 March 2018 no e-way bill is required for the internal movement of goods within the Andaman Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu and Lakshadweep.
Situation 5 – Goods exempt from GST
Any goods which are exempt from GST per Notification 02/2017 – Central Tax (Rate) do not require an e-way bill. Notification 2/2017 – Central Tax (Rate) has been changed several times most recently on 25 January 2018 so it is best to have a up to date copy of the exemptions. Among the exemptions – there is an exemption – Rule 138(14)(e) requires de-oiled cake to have an e-way bill for transport although it is exempt from GST.
Situation 6 – Items not in scope of GST
Remember that alcoholic liquor for human consumption, petroleum crude, high speed diesel and petrol, natural gas and ATF are all out of scope of GST. Therefore these items do not require an e-way bill to be generated.
Situation 7 – Schedule III items
Under CGST Action Schedule III certain activities and items are not treaty as a supply of goods or services. Similarly these items do not require an e-way bill to be issued.
Situation 8 – Transshipment of Goods
When goods are moved under a customs bond from one container depot or freight station to a customs port or from one customs station to another customs station no e-way bill is required. Alternatively when the goods are under customs supervision or under customs seal no e-way bill is required.
Situation 9 – Transit to Nepal or Bhutan
When goods move from India to Nepal or Bhutan then no e-way bill is required.
Situation 10 – Supplies the CSD
A supply to a CSD does not require an e-way bill.
Situation 11 – Defence related movements
When goods move because of defence movement or the Ministry of defence is the consignor or consignee then there is no e-way bill.
Situation 12 – Government related transport
Consignor of the goods is the Central government, State government or local authority for transport of goods by rail does not required an e-way bill.
Situation 13 – empty cargo containers
Transport of empty cargo containers does not require an e-way bill.
Situation 14 – Specified transport
When goods are transported up to 20 kilometers from a place of business of the consignor to a weighbridge for weighing and then back then there is no e-way bill provided a delivery challan is issued.
When you consider these 14 situation which remove the e-way bill requirement the obvious ones are the situations when the goods are exempt from the GST. Therefore, understanding the GST treatment of goods will be critical to understanding the e-way bill requirement. GST influences the e-way bill even when the goods are not under a sale rather are just a movement. Always remember the GST treatment of the goods when considering the e-way bill implications.