Generation of E-Way Bill in Case of the Supply of Services

The Central Board of Indirect Taxes and Customs has published an advisory on September 16, 2021, concerning the generation of the e-way bill where the principal supply is the supply of services. The GST Network is the information technology drive for the indirect tax system. It has been announced that no e-way bills (EWB) are required if the principal supply is service and no supply of goods is involved. However, where the supply is a bundled supply with a mix of goods & services, e-way bills are mandated. The supplier has to obtain an e-way bill by entering codes for both. The CBIC highlighted that representations were received from numerous trade bodies asserting that they cannot generate an EWB bill for the movement of those goods where the principal supply is essentially a service. This is because there is no requirement for generating an E-way Bill for the supply of services.

Recognizing that there is no necessity for producing an E-way Bill by entering SAC (Service Accounting Code-Chapter 99) on the E-way bill portal, the taxpayers, are suggested as below:

• Rule 138 of CGST Rules, 2017 requires information to be furnished before the initiation of the movement of goods. Filing of e-way bill is required where every registered supplier transports a consignment of goods worth more than fifty thousand rupees.
• In the case of the supply of service where there is no involvement in the movement of goods, the e-way bill is not required to be generated.
• However, in circumstances where the principal supply is service, but the movement of goods happens, an e-way bill is to be filed accordingly. In such matters, e-way bills are created by registering the items of the HSN code of the goods, along with the SAC (Service Accounting Code) of services involved. Under the Goods and Services Tax (GST) framework, the terms "composite supply" and "mixed supply" pertain to different scenarios of supplying multiple goods or services together.
  A "composite supply" refers to a situation where various goods or services are provided together as a package, forming an integral part of a single supply. In such cases, all components of the supply are linked in such a way that one of them can be considered as the principal supply, determining the applicable tax rate for the entire package.
  On the other hand, a "mixed supply" involves a combination of goods or services that are supplied together, but they do not have the same inherent connection as in a composite supply. Each component of a mixed supply retains its individual identity, and they are bundled merely for convenience or commercial purposes.
  The distinction between the two is crucial for GST treatment. In a composite supply, the tax rate applicable to the principal supply is extended to the entire package. In a mixed supply, the tax rate for the highest-taxed component is usually applied to the entire bundle.Understanding whether a supply is composite or mixed is essential for correctly determining the applicable GST rate and fulfilling the associated compliance requirements.

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