Fast Moving Consumer Goods (FMCG) is one of the most important sectors in the Indian market. The FMCG sector operates in non-durable products with short to medium term shelf life which is generally of lower value. Examples include milk and milk products, rice and pulses, vegetables and fruits, soaps and shampoos, perfumes and deodorants, etc. The FMCG sector was one of the biggest beneficiaries with the introduction of GST in India. The E-Way bill was introduced in 2018 to enable the smooth movement of goods for inter-state and intra-state supplies. In this article, we will discuss the impact of E-Way Bill on the FMCG sector.
What Is E-Way Bill?
E-Way bill is an electronic document generated when there is a supply/return or inward supply of goods from an unregistered person. There are various conditions for generation of E-Way bills. Refer to a detailed article on E-Way bill here.
E-Way Bill In FMCG Sector
The benefits of the E-Way bill on the FMCG Sector are:
- With the removal of barriers and check posts for the inter-state supply of goods, the supply chain costs will be lower, and time taken to deliver the goods will also be shorter. The E-Way bill will reduce the number of checks performed by tax authorities.
- E-Way bill system enables Companies to create sub-users. This helps large FMCG companies to build their presence in multiple locations to create a network within the Company. With this feature, companies can assign roles to various team members and monitor/manage all the sub-users that have access to the portal easily.
- E-Way bill is required to be generated only when the taxable value of goods exceeds INR 50,000. Here, when non-taxable goods like ‘Essential Commodities’ are also supplied, the value of such non-taxable goods is not required to be considered for the INR 50,000 limit.
- An E-Way bill is not required to be generated if the value of each consignment does not cross INR 50,000, even though the value of the entire consignment exceeds INR 50,000. This is particularly useful for FMCG companies which generally transport multiple consignments at the same time.
- To help smaller companies, the Government has notified that a supplier is not required to include transporter’s details in the E-Way bill if the distance involved in the movement of goods does not exceed 50 kms for intra-state supplies.
- Bulk generation of E-Way bills is another useful facility introduced by the Government which has significantly reduced the time taken to generate hundreds of E-Way bills during the day. The tool can be linked to the Company’s ERP as well, and thus enabling seamless transfer of data.
- EWBs can be generated through SMS, Android App, Bulk Upload Tool, Web module or from an API based site to site integration. The API interface will help the transporters and taxpayers to connect with the EWB system easily by enabling an automated system for generation of e-Way bills.
The Masters India e-Way Bill APIs can help users to:
- Generate EWBs (Single and Consolidated)
- Modify EWBs (Update, Cancel or Reject)
- Get EWBs.
Most FMCG Companies set up manufacturing units in states which provide benefits like tax holiday, incentives, subsidies, etc. This means the Companies would have to set up warehouses to cater to the needs of consumers in other states. GST laws require an E-Way bill to be generated and the Companies have to pay GST on supplies for inter-state branch transfers as well. This can result in temporary cash-flow crunches for Companies.