The Manufacturing industry was one of the key beneficiaries with the introduction of GST. The removal of check posts at state borders has reduced the lead time for inward and outward movement of goods. This helped Manufacturers to improve their efficiency.
Manufacturing companies generally have factories located in selected locations, and the field/branch offices are scattered across the country. These companies also engage Job Workers for some or all the manufacturing processes.
In this article, we will cover the E-Waybill requirements for the Manufacturers:
E-Way bill is an electronic document generated for the supply or return or inward supply of goods from an unregistered person. There are various conditions for generation of E-Waybill (EWB). Generally, EWBs have to be generated when the value of the consignment (to be transported) is more than INR 50,000. Refer to a detailed article on E-Way bill here.
When a part of the manufacturing process is undertaken by someone other than the Manufacturer, it is known as Job Work. The various stages at which a Job Worker may be involved are:
- First level processing of raw materials
- Processing of semi-finished goods
- Packaging of the finished goods
- Assembly of goods
- Any other process to assist the Manufacturer with the production of the finished goods.
The movement of goods to and from the Job Worker might occur for various reasons. As there is no requirement to generate a GST invoice for Job Work, a Delivery Challan has to be issued. The E-Way bill requirements here are:
|Scenarios||E-Way Bill Requirements|
|Goods sent by Manufacturer to the Job Worker||The limit of INR 50,000 is not applicable when goods are transferred for Job Work when the Manufacturer and the Job Worker are in two different states. E-Way bill must be generated for all inter-state transfers related to the Job Work, irrespective of the value involved.|
|Goods sent back by Job Worker to Manufacturer||The Job Worker can generate the E-Way bill if he/she is registered under GST. If the Job Worker does not have a GST registration, the Manufacturer has to generate the EWB.|
|Goods sent by Job Worker directly to the customer||To send goods directly to the end customer, the Job Worker must be registered under Section 25 of the CGST Act 2017, and the Manufacturer must add the Job Worker’s location as an additional place of business to their GSTIN.
Thereafter, E-Way bills can be generated by either the Manufacturer or the Job Worker while dispatching the goods to the end customer.
A Manufacturer is required to generate an E-Way bill for branch transfers when the taxable value of the goods being transferred exceeds INR 50,000. The Manufacturer must indicate this as a stock transfer at the time of generating the E-Way bill. A GST invoice is not applicable for stock transfers, and therefore a delivery challan should be generated.
The details to be included in the EWB are as follows:
- Transaction type: Outward/Inward
- Sub Type: Job Work /Job Work Returns/Others (For Stock Transfer)
- Document Type: Delivery Challan
- GST Rate and Amount: Zero/Nil as there is no GST on Job Work/Stock Transfer
The rest of the process remains the same.