Understanding Rule 138: E-Way Bill Rules in GST with Practical Example

Understanding Rule 138: E-Way Bill Rules in GST with Practical Example

What is Rule 138 of GST?

Rule 138 requires an e-way bill for the movement of goods valued at more than Rs. 50,000, regardless of the mode of transport (road, rail, air, or vessel). The rule is designed to ensure seamless tracking of goods and curb tax evasion.

Expolore Sub-Rules of Rule 138 with Practical Examples is explaining below

Sub-Rule (1): Who Must Generate an E-Way Bill?

An e-way bill must be generated in the following cases:

-When goods are supplied

-For reasons other than supply (e.g., exhibitions, job work, or branch transfers)

-When purchasing from an unregistered person

Example:

A supplier in Mumbai sells goods worth ₹80,000 to a buyer in Pune. The supplier must generate an e-way bill before dispatching the goods.

Sub-Rule (2): Generating E-Way Bill When Using Own or Hired Transport

When goods are transported by a registered person in their own or hired vehicle, they must fill Part B of Form GST EWB-01 to generate the e-way bill.

Example:

A bakery owner uses their van to transport raw materials worth ₹1,20,000. They must generate the e-way bill with vehicle details before the journey.

Sub-Rule (3): Goods Handed Over to a Transporter

If a transporter is moving the goods, the registered person must fill Part A of Form GST EWB-01. The transporter generates the e-way bill using this information.

Example:

A textile trader in Gujarat sends ₹60,000 worth of fabric to Rajasthan via a logistics company. The trader shares Part A details with the transporter, who generates the e-way bill.

Sub-Rule (4): Unique E-Way Bill Number (EBN)

Upon generating an e-way bill, a unique e-way bill number (EBN) is provided to the supplier, recipient, and transporter.

Sub-Rule (5): Transfer of Goods Between Vehicles

If goods are transferred from one vehicle to another during transport, the transporter must update the e-way bill with the new vehicle details.

Example:

A shipment traveling from Haryana to Himachal Pradesh is moved from one truck to another midway. The transporter updates the vehicle details on the portal.

Sub-Rule (6): Consolidated E-Way Bills

For multiple consignments in one vehicle, a consolidated e-way bill is generated using individual e-way bill numbers.

Sub-Rule (7): E-Way Bills for Unregistered Persons

Unregistered persons causing the movement of goods may generate e-way bills. For transactions with registered recipients, the movement is deemed to be caused by the recipient.

Example:

An unregistered vendor delivers goods worth ₹70,000 to a registered buyer. The buyer can generate the e-way bill.

Sub-Rule (8): Auto-Population in GSTR-1

Details from Part A of Form GST EWB-01 are auto-populated in GSTR-1 for the supplier.

Sub-Rule (9): Cancellation of E-Way Bill

If goods are not transported or the e-way bill details are incorrect, it can be canceled within 24 hours, provided it hasn’t been verified during transit.

Sub-Rule (10): Validity Period of E-Way Bill

The e-way bill's validity depends on the distance:

-Up to 200 km: 1 day

-For every additional 200 km: 1 additional day

-Over-Dimensional Cargo (ODC): Validity for every 20 km.

Example:

If any Goods transported 450 km will require an e-way bill valid for 3 days.

Provided that The Commissioner (a senior government official) has the authority to extend the validity period of an e-way bill for specific types of goods. This extension can only happen after receiving recommendations from the Council (a body of experts) and by issuing a Notification.

Example: Suppose a new notification is issued for the extension of e-way bills for    medical supplies, due to their urgent and critical nature. If a transporter's e-way    bill for medical equipment is nearing expiry, the validity could be extended based    on the new rules set by the Commissioner.

Explanation: The validity period of an e-way bill can be extended within 8 hours from its expiry. This allows for a short grace period for extensions to avoid penalties for minor delays.

Example: If an e-way bill expires at 12:00 PM on a Monday, the transporter can        still extend the validity of the e-way bill until 8:00 PM that same day. They would    need to update the relevant details to reflect this extension.

Explanation:The relevant date is the date when the e-way bill is generated. The validity period begins from this date, and each day is counted, ending at "midnight" on the following day after the e-way bill was generated. 

    Example:- E-way bill generated: January 15, 2025  

    - Validity period: Suppose the validity is 3 days. The e-way bill would be valid             until "midnight on January 18, 2025".

Explanation: Over Dimensional Cargo refers to goods that are too large and exceed the dimensions allowed under "Rule 93 of the Central Motor Vehicle Rules, 1989". These goods are considered as a single, indivisible unit.

Example: A large industrial machine that cannot be broken down into smaller pieces and exceeds the prescribed dimensional limits (like height, width, and length) would be categorized as "Over Dimensional Cargo". Transporting this type of cargo might require special permits, and an e-way bill would apply to monitor the movement of such goods.

Sub-Rule (11): Acceptance or Rejection of E-Way Bill

The recipient must accept or reject the e-way bill within 72 hours of its generation. If no action is taken, the bill is automatically accepted.

Sub-rule (12): Acceptance or Rejection of Information

Where the person to whom the information specified in sub-rule (11) has been made available does not communicate their acceptance or rejection within seventy-two hours from the time the details are made available to him on the common portal, or from the time of delivery of goods (whichever is earlier), it shall be deemed that he has accepted the said details.

Example: Suppose a consignor generates an e-way bill and shares the details with the consignee through the common portal. If the consignee does not respond (accept or reject) within 72 hours of receiving the information on the portal, or within 72 hours of the goods being delivered, the details will be automatically considered accepted.

Sub-rule (13): Validity of E-Way Bill

The e-way bill generated under this rule or under Rule 138 of the Goods and Services Tax Rules of any State or Union Territory shall be valid in every State and Union Territory.

Example: An e-way bill generated in Maharashtra for transporting goods to Delhi will be valid in both Maharashtra and Delhi. It can be used for inter-state transportation without needing to generate a new e-way bill in Delhi.

Sub-Rule (14): Cases Where E-Way Bills Are Not Required

No e-way bill is needed for:

-Non-motorized transport

-Goods specified in the Annexure (e.g., LPG, jewelry, personal effects)

-Transport within 20 km for weighment.

Practical Tips for Compliance

Ensure Timely Generation: Always generate the e-way bill before transporting goods.

Keep Documents Handy: Carry invoices, e-way bills, and delivery challans during transport.

Update Details Promptly: Update vehicle or transporter details as required.

Check Exemptions: Know when e-way bills are not needed to avoid unnecessary documentation.

Conclusion

Rule 138 provides accountability and transparency in the movement of goods under GST. Their sub-rules and compliance requirements need to be understood to avoid penalties and delays. It is essential to know the rules pertaining to e-way bills whether it is supply, transport, or receiving goods.