E-Way Bill Precautions: A Guide to Inter-State GST Compliance

Precautions to Be Taken While Generating an Inter-State E-Way Bill

An e-way bill is a mandatory requirement under Section 68 of the CGST Act and Rule 138 of the CGST Rules for the movement of goods of value exceeding ₹50,000 between states. The system aims to track and regulate the movement of goods, preventing tax evasion and ensuring smooth movement.

To ensure compliance and avoid penalties, specific precautions must be taken while generating and carrying an inter-state e-way bill.

1. Pre-requisites for E-Way Bill Generation

a. Appropriate Registration and Access

• GST Registration: Ensure both consignor and consignee are properly registered on the GST portal (except in cases specifically exempt).

• E-Way Bill Portal Registration: Register at ewaybillgst.gov.in and securely set your username and password.

• Updated Mobile Number: The registered mobile number should be current for OTP authentication, especially with the implementation of Multi-Factor Authentication (MFA) as per GSTN Advisory Dec 2024.

b. Accurate Consignment Value Calculation

• As per Rule 138(1) Explanation 2, CGST Rules, consignment value must include:

  • Value under Section 15 of the CGST Act (transaction value)

  • GST (CGST, SGST/UTGST, IGST, Cess) as applicable

  • Exclude exempt supply value if the invoice covers both exempt and taxable goods.

2. Documentation & Information to Provide

a. Essential Documents

• Invoice/Bill of Supply/Delivery Challan: Must be available and accurate.

• Other Relevant Permits: For imports, include the Bill of Entry.

b. Accurate Data Entry in E-Way Bill (FORM GST EWB-01)

• Part A: Consignor and Consignee GSTIN, document details, description of goods (HSN code), taxable value, quantity, etc.

• Part B: Vehicle number and transporter details (to be filled before actual movement).

  • Transporter/driver must be carrying the e-way bill number in physical or electronic form (Section 68, Rule 138A).

c. HSN and SAC Codes

• From 1st February 2024 (per Notification No. 78/2020–CT, 15.10.2020):

  • AATO > ₹5 Crore: 6-digit HSN mandatory for B2B/exports

  • AATO ≤ ₹5 Crore: 4-digit HSN mandatory

d. Validity of E-Way Bill

• Generated before commencement of movement.

• Ensure the e-way bill's validity period covers the entire journey (refer to the distance covered and e-way bill validity as per rules).

• For exceptional circumstances (like vehicle breakdown), extension within 8 hours of expiry is allowed (Notification No. 94/2020-CT).

e. Recent Restrictions

• Document Age Restriction: E-way bill can only be generated for documents not older than 180 days (effective 1 Jan 2025, GSTN circular Dec 2024).

• Extension Limit: Validity extension cannot exceed 360 days from the original generation date.

3. Special Scenarios

• No E-Way Bill Needed (Rule 138(14), Notf No. 2/2017-CT(R), sec. 138(14)):

  • Certain goods as per the Annexure

  • Non-motorised conveyances

  • Alcohol, crude oil, etc.

  • Movement within notified areas by State/UT

4. Data Accuracy & Common Mistakes

a. Accuracy is Critical

• Verify spelling, document numbers, HSN, and vehicle details.

• Ensure place of delivery is correct; this must match the e-way bill to avoid confusion—critical for inter-state transactions.

b. Minor Mistakes & Penalty (Circular No. 64/38/2018-GST, 14.09.2018)

• Small errors (in name, pin, address, HSN’s first-2 digits correct, vehicle number, etc.) may attract penalty of ₹500/- each for CGST/SGST but are not usually grounds for detention.

5. Key Compliance Points

• Part B Update: Always ensure Part B (vehicle details) is updated, especially after transshipment or vehicle change.

• Accept/Reject on Portal: After generation, supplier/recipient can accept/reject the consignment details within 72 hours; after that, it is deemed accepted.

• Possession During Transit: Driver/transporter must always carry the e-way bill (physical print or electronically).

• Consolidated E-Way Bill: If multiple consignments are in one vehicle, generate a consolidated e-way bill (FORM GST EWB-02).

6. Principal Legal References

7. Penalties for Non-Compliance

8. Recent System and Compliance Updates

• Multi-Factor Authentication (MFA) Implementation: Mandatory for AATO > ₹20 Crores from Jan 2025, > ₹5 Crores from Feb 2025, and all from Apr 2025.

• HSN Code Length: 6-digits for AATO > ₹5 Crores, 4-digits otherwise (w.e.f. 01.02.2024).

• SMS Alert for High-Value Invoices: For invoices > ₹10 Crores, additional SMS alert on e-way bill generation.

Practical Compliance Checklist for Inter-State E-Way Bill

9. Conclusion

• Pay close attention to the accuracy of documents, portal data entry, and timely updates.
• Be mindful of applicability and exemptions when creating an inter-state e-way bill.
• Missing these details could lead to penalties, detention, or compliance issues.
• Keep yourself informed with the latest system advisories and GST notifications to ensure smooth and compliant inter-state goods movement.

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