When E-Way Bill is Not Required: Understanding Exemptions and Exceptions

The E-Way Bill system ensures transparent goods movement under GST. Key exemptions include perishable items, low-value consignments, and certain transportation methods, reducing paperwork and enhancing compliance. Proper documentation is crucial.

CA Raj Kumar - Avatar Image Written by CA Raj Kumar - Updated on June 12, 2024. Estimated Reading Time: 18 minutes.
View more from: GST

When E-Way Bill is Not Required: Understanding Exemptions and Exceptions

The E-Way Bill system is a cornerstone of GST compliance in India. It ensures the smooth and transparent movement of goods across state borders. However, navigating the complexities of E-Way Bill requirements can be daunting. This article aims to assist you in understanding the key exemptions available and ensuring your business stays compliant.

 

What is an E-Way Bill?

An e-way bill is an electronic document generated online by taxpayers. It acts as a digital permit for the movement of goods within India. This document is crucial for facilitating the smooth and transparent movement of goods across state borders. It is mandatory for most interstate and even some intra-state transportation of goods.

The E-Way Bill system aims to streamline the process of goods transportation by reducing paperwork and human intervention. It integrates with the Goods and Services Tax (GST) network, ensuring a seamless flow of information between the transporter, the supplier, and the recipient of the goods. This digitalization helps authorities track the movement of goods and combat tax evasion.

E-way bills can be generated from the E-way Bill Portal. Anyone with a valid GST identification number can register, and after logging in, generate the e-way bills for the movement of goods. The user needs to fill out the necessary details, such as the invoice number, supplier and recipient information, product description, quantity, and value. Once all the required fields are completed, the system will generate a unique E-Way Bill number along with a QR code.

 

Why are e-way bills important, and when are they required?

E-Way bills are crucial for GST compliance. They provide a digital trail of goods movement, preventing tax evasion and facilitating efficient tax collection. They also help in streamlining logistics and simplifying the transportation process.

 

E-Way bills are generally required for goods transported across state borders and sometimes even within the same state. The threshold for mandatory E-Way Bill generation varies depending on the value of the consignment.

Understanding Exemptions: Who is Exempt?

The E-Way Bill system offers exemptions for certain goods, suppliers, transportation methods, and purposes. The provisions related to exemptions from the e-way bill are covered under Rule 138 (14) of the CGST Rules, 2017.

Exemptions based on the nature of goods:

  • Perishable items like fruits, vegetables, livestock, dairy products, etc. are exempted via Notification No. 2/2017. See below the full table containing a list of such items. See below Annexure u/s 138.

  • Alcoholic liquor for human consumption and petroleum products. These items aren't yet covered by GST laws.

  • Where goods are not supplied under Schedule III of the CGST Act, [these are not treated as supplies under the CGST Act, and hence their transportation also doesn't need an e-way bill].

 

Exemptions based on Consignment Value:

  • Consignments below a specific value threshold are often exempt. This threshold varies depending on the state. The threshold for interstate supply is Rs. 50,000. For intra-state supplies, the threshold may vary from state to state and can often be higher than Rs. 50,000 depending upon the notification of such a state.

Example: A transport of goods worth Rs. 50,000 may be exempt in one state, while the threshold could be Rs. 75,000 in another state.

 

Exemptions based on transportation methods:

  • When goods are transported by non-motorized conveyances.

Example: Transportation of goods by handcart or bicycle does not require an E-Way Bill.

  • Transportation by rail where the consignor is either the central government, the state government, or any local authority.

 

Exemptions based on supplier categories:

  • Any movement of goods caused by a defense formation under the Ministry of Defense as a consignor or consignee.

Example: Supplies for defense or diplomatic missions might be exempt.

 

Exemptions based on Purpose of Transportation:

  • Personal goods, like household items transported not for business, are typically exempt from E-Way Bill requirements.

Example: A family transports household items for a personal relocation.

  • Empty cargo containers are also exempt from E-Way Bill rules.

  • Goods are transported within 20 km from the place of business to be weighed at the weighbridge.

  • Empty LPG cylinders for packing purposes.

 

Special Case Exemptions:

  • Transportation under customs Supervision and Seal: Goods transported from an Inland Container Depot (ICD) to a port or vice versa under customs supervision and seal are exempt.

  • Transit cargo to Nepal and Bhutan: Goods transiting to these countries are exempt.

  • Specific relief schemes and notifications: Goods transported under certain government relief schemes or notifications may be exempt.

 

Documentation for Exempt Transport:

Even with exemptions, proper documentation is vital to demonstrating compliance, depending on the different scenarios. This can include:

  • Delivery Challan: A detailed document listing the transported goods and their receiver.

  • Invoice: The original invoice for the goods being transported.

  • GST Registration Certificate: Proof of the transporter's GST registration ID.

  • Other relevant documents: Any specific documentation related to the exemption being claimed.

 

 

Penalties for non-compliance:

Failing to comply with E-Way Bill requirements can lead to penalties. These can include:

  • Penalties under Section 122(1)(xiv) of the CGST Act: A penalty of up to Rs. 10,000 for not having the correct documents for the movement of taxable goods.

  • Penalties and seizures under Sections 129 and 130 of the CGST Act: These sections provide heavy penalties and seizures of goods, including vehicles. Penalties can vary depending on the circumstances, from 50% of the total value of goods to 200% of the tax payable on the goods as penalties.

Further, the transporter, if unable to prove innocence in the movement of goods in contravention of the GST laws, shall also have to bear penalties up to 100% of the tax payable on goods transported.

 

Understanding through different examples and scenarios:

  • Scenario 1: A farmer transports freshly harvested fruits from his farm to a local market within the same state. The transportation distance is short, and the consignment value is below the threshold limit for his state. This scenario may not require an E-Way bill.

  • Scenario 2: A small-scale business owner transports ready-made garments from his workshop to a customer's shop within the same city. The consignment value is below the threshold limit, and the transportation is done by a non-motorized conveyance. This scenario may not require an E-Way bill.

  • Scenario 3: A manufacturer transports raw materials for industrial use from one state to another. The consignment value is above the threshold limit. This scenario requires an E-Way bill.

 

Conclusion:

Understanding the complexities of E-Way Bill exemptions is essential for business owners to ensure they follow regulations and avoid any potential penalties. By carefully evaluating the nature of goods, transportation methods, and the purpose of transportation, you can ensure the smooth and legal movement of goods. Remember to maintain all necessary documentation to prove your eligibility for exemptions. Consulting with a GST expert can further assist you in navigating these complexities.

ANNEXURE [(See rule 138 (14)] – Eway Bill not Required

S.  

No.  

Chapter or  

Heading or

Sub-heading  or        Tariff item  

Description of Goods  

1.   

0101  

Live asses, mules and hinnies  

2.   

0102  

Live bovine animals 

3.   

0103  

Live swine 

4.   

0104  

Live sheep and goats 

5.   

0105  

Live poultry, that is to say, fowls of the species Gallus domesticus, ducks, geese, turkeys and guinea fowls. 

6.   

0106  

Other live animal such as Mammals, Birds, Insects 

7.   

0201  

Meat of bovine animals, fresh and chilled. 

8.   

0202  

Meat of bovine animals frozen [other than frozen and put up in unit container] 

9.   

0203  

Meat of swine, fresh, chilled or frozen [other than frozen and put up in unit container] 

10.   

0204  

Meat of sheep or goats, fresh, chilled or frozen [other than frozen and put up in unit container] 

11.   

0205  

Meat of horses, asses, mules or hinnies, fresh, chilled or frozen [other than frozen and put up in unit container] 

12.   

0206  

Edible offal of bovine animals, swine, sheep, goats, horses, asses, mules or hinnies, fresh, chilled or frozen [other than frozen and put up in unit container] 

13.   

0207  

Meat and edible offal, of the poultry of heading 0105, fresh, chilled or frozen [other than frozen and put up in unit container] 

14.   

0208  

Other meat and edible meat offal, fresh, chilled or frozen [other than frozen and put up in unit container] 

15.   

0209  

Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted, fresh, chilled or frozen [other than frozen and put up in unit container] 

16.   

0209   

Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted, salted, in brine, dried or smoked [other than put up in unit containers] 

17.   

0210 

Meat and edible meat offal, salted, in brine, dried or smoked; edible flours and meals of meat or meat offal, other than put up in unit containers

18.   

3            

Fish seeds, prawn / shrimp seeds whether or not processed, cured or in frozen state [other than goods falling under Chapter 3 and attracting

2.5%] 

19.   

0301      

Live fish. 

20.   

0302      

Fish, fresh or chilled, excluding fish fillets and other fish meat of heading 0304 

21.   

0304      

Fish fillets and other fish meat (whether or not minced), fresh or chilled. 

22.   

0306      

Crustaceans, whether in shell or not, live, fresh or chilled; crustaceans, in shell, cooked by steaming or by boiling in water live, fresh or chilled. 

23.   

0307      

Molluscs, whether in shell or not, live, fresh, chilled; aquatic invertebrates other than crustaceans and molluscs, live, fresh or chilled. 

24.   

0308      

Aquatic invertebrates other than crustaceans and molluscs, live, fresh or chilled. 

25.   

0401      

Fresh milk and pasteurised milk, including separated milk, milk and cream, not concentrated nor containing added sugar or other sweetening matter, excluding Ultra High Temperature (UHT) milk 

26.   

0403      

Curd; Lassi; Butter milk 

27.   

0406      

Chena or paneer, other than put up in unit containers and bearing a registered brand name;   

28.   

0407      

Birds' eggs, in shell, fresh, preserved or cooked 

29.   

0409      

Natural honey, other than put up in unit container and bearing a registered brand name 

30.   

0501      

Human hair, unworked, whether or not washed or scoured; waste of human hair 

31.   

0506 

All goods i.e. Bones and horn-cores, unworked, defatted, simply prepared (but not cut to shape), treated with acid or gelatinised; powder and waste of these products 

32.   

0507 90 

All goods i.e. Hoof meal; horn meal; hooves, claws, nails and beaks; antlers; etc. 

33.   

0511 

Semen including frozen semen 

34.   

Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage  

35.   

0701 

Potatoes, fresh or chilled. 

36.   

0702 

Tomatoes, fresh or chilled. 

37.   

0703 

Onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or chilled. 

38.   

0704      

Cabbages, cauliflowers, kohlrabi, kale and similar edible brassicas, fresh or chilled. 

39.   

0705      

Lettuce (Lactuca sativa) and chicory (Cichorium spp.), fresh or chilled. 

40.   

0706      

Carrots, turnips, salad beetroot, salsify, celeriac, radishes and similar edible roots, fresh or chilled. 

41.   

0707      

Cucumbers and gherkins, fresh or chilled. 

42.   

0708      

Leguminous vegetables, shelled or unshelled, fresh or chilled. 

43.   

0709      

Other vegetables, fresh or chilled. 

44.   

0712      

Dried vegetables, whole, cut, sliced, broken or in powder, but not further prepared. 

45.   

0713      

Dried leguminous vegetables, shelled, whether or not skinned or split. 

46.   

0714      

Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, fresh or chilled; sago pith. 

47.   

0801      

Coconuts, fresh or dried, whether or not shelled or peeled 

48.   

0801      

Brazil nuts, fresh, whether or not shelled or peeled 

49.   

0802      

Other nuts, Other nuts, fresh such as Almonds, Hazelnuts or filberts (Coryius spp.), walnuts, Chestnuts (Castanea spp.), Pistachios, Macadamia nuts, Kola nuts (Cola spp.), Areca nuts, fresh, whether or not shelled or peeled 

50.   

0803      

Bananas, including plantains, fresh or dried 

51.   

0804      

Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh. 

52.   

0805      

Citrus fruit, such as Oranges, Mandarins (including tangerines and satsumas);clementines, wilkings and similar citrus hybrids, Grapefruit, including pomelos, Lemons (Citrus limon, Citrus limonum) and limes (Citrus aurantifolia, Citrus latifolia), fresh. 

53.   

0806      

Grapes, fresh 

54.   

0807      

Melons (including watermelons) and papaws (papayas), fresh. 

55.   

0808      

Apples, pears and quinces, fresh. 

56.   

0809      

Apricots, cherries, peaches (including nectarines), plums and sloes, fresh. 

57.   

0810      

Other fruit such as strawberries, raspberries, blackberries, mulberries and loganberries, black, white or red currants and gooseberries, cranberries, bilberries and other fruits of the genus vaccinium, Kiwi fruit, Durians, Persimmons, Pomegranates, Tamarind, Sapota (chico), Custard-apple (ata), Bore, Lichi, fresh. 

58.   

0814      

Peel of citrus fruit or melons (including watermelons), fresh. 

59.   

9            

All goods of seed quality  

60.   

0901 

Coffee beans, not roasted 

61.   

0902 

Unprocessed green leaves of tea 

62.   

0909 

Seeds of anise, badian, fennel, coriander, cumin or caraway; juniper berries [of seed quality] 

63.   

0910 11 10 

Fresh ginger, other than in processed form 

64.   

0910 30 10 

Fresh turmeric, other than in processed form 

65.   

1001 

Wheat and meslin [other than those put up in unit container and bearing a registered brand name] 

66.   

1002 

Rye [other than those put up in unit container and bearing a registered brand name] 

67.   

1003 

Barley [other than those put up in unit container and bearing a registered brand name] 

68.   

1004 

Oats [other than those put up in unit container and bearing a registered brand name] 

69.   

1005 

Maize (corn) [other than those put up in unit container and bearing a registered brand name] 

70.   

1006 

Rice [other than those put up in unit container and bearing a registered brand name] 

71.   

1007 

Grain sorghum [other than those put up in unit container and bearing a registered brand name] 

72.   

1008 

Buckwheat, millet and canary seed; other cereals such as Jawar, Bajra, Ragi] [other than those put up in unit container and bearing a registered brand name] 

73.   

1101 

Wheat or meslin flour [other than those put up in unit container and bearing a registered brand name]. 

74.   

1102 

Cereal flours other than of wheat or meslin, [maize (corn) flour, Rye flour, etc.] [other than those put up in unit container and bearing a registered brand name] 

75.   

1103   

Cereal groats, meal and pellets [other than those put up in unit container and bearing a registered brand name] 

76.   

1104 

Cereal grains hulled 

77.   

1105 

Flour, of potatoes [other than those put up in unit container and bearing a registered brand name] 

78.   

1106 

Flour, of the dried leguminous vegetables of heading 0713 (pulses) [other than guar meal 1106 10 10 and guar gum refined split 1106 10 90], of sago or of roots or tubers of heading 0714 or of the products of Chapter 8 i.e. of tamarind, of singoda, mango flour, etc. [other than those put up in unit container and bearing a registered brand name] 

79.   

12 

All goods of seed quality 

80.   

1201 

Soya beans, whether or not broken, of seed quality. 

81.   

1202 

Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken, of seed quality. 

82.   

1204 

Linseed, whether or not broken, of seed quality. 

83.   

1205 

Rape or colza seeds, whether or not broken, of seed quality. 

84.   

1206   

Sunflower seeds, whether or not broken, of seed quality. 

85.   

1207 

Other oil seeds and oleaginous fruits (i.e. Palm nuts and kernels, cotton seeds, Castor oil seeds, Sesamum seeds, Mustard seeds, Saffower (Carthamustinctorius) seeds, Melon seeds, Poppy seeds, Ajams, Mango kernel, Niger seed, Kokam) whether or not broken, of seed quality. 

86.   

1209 

Seeds, fruit and spores, of a kind used for sowing. 

87.   

1210 

Hop cones, fresh. 

88.   

1211 

Plants and parts of plants (including seeds and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or chilled. 

89.   

1212 

Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh or chilled. 

90.   

1213 

Cereal straw and husks, unprepared, whether or not chopped, ground, pressed or in the form of pellets 

91.   

1214 

Swedes, mangolds, fodder roots, hay, lucerne (alfalfa), clover, sainfoin, forage kale, lupines, vetches and similar forage products, whether or not in the form of pellets. 

92.   

1301 

Lac and Shellac 

93.   

1404 90 40 

Betel leaves 

94.   

1701 or 1702 

Jaggery of all types including Cane Jaggery (gur) and Palmyra Jaggery 

95.   

1904 

Puffed rice, commonly known as Muri, flattened or beaten rice, commonly known as Chira, parched rice, commonly known as khoi, parched paddy or rice coated with sugar or gur, commonly known as Murki 

96.   

1905 

Pappad 

97.   

1905 

Bread (branded or otherwise), except pizza bread 

98.   

2201 

Water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container] 

99.   

2201 

Non-alcoholic Toddy, Neera including date and palm neera 

100.

2202 90 90 

Tender coconut water other than put up in unit container and bearing a registered brand name 

101.

2302, 2304, 

2305, 2306,      2308, 2309     

Aquatic feed including shrimp feed and prawn feed, poultry feed and cattle feed, including grass, hay and straw, supplement andhusk of pulses, concentrates andadditives, wheat bran and de-oiled cake

102.

2501 

Salt, all types 

103.

2835  

Dicalcium phosphate (DCP) of animal feed grade conforming to IS specification No.5470 : 2002 

104.

3002 

Human Blood and its components 

105.

3006 

All types of contraceptives 

106.

3101 

All goods and organic manure [other than put up in unit containers and bearing a registered brand name] 

107.

3304 

Kajal [other than kajal pencil sticks], Kumkum, Bindi, Sindur, Alta 

108.

3825 

Municipal waste, sewage sludge, clinical waste 

109.

3926 

Plastic bangles 

110.

4014 

Condoms and contraceptives 

111.

4401 

Firewood or fuel wood 

112.

4402 

Wood charcoal (including shell or nut charcoal), whether or not agglomerated 

113.

4802 / 4907 

Judicial, Non-judicial stamp papers, Court fee stamps when sold by the Government Treasuries or Vendors authorised by the Government 

114.

4817 / 4907 

Postal items, like envelope, Post card etc., sold by Government 

115.

48 / 4907 

Rupee notes when sold to the Reserve Bank of India  

116.

4907 

Cheques, lose or in book form 

117.

4901 

Printed books, including Braille books 

118.

4902 

Newspapers, journals and periodicals, whether or not illustrated or containing advertising material 

119.

4903 

Children's picture, drawing or colouring books 

120.

4905 

Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed 

121.

5001 

Silkworm laying, cocoon 

122.

5002 

Raw silk 

123.

5003 

Silk waste 

124.

5101 

Wool, not carded or combed 

125.

5102 

Fine or coarse animal hair, not carded or combed 

126.

5103 

Waste of wool or of fine or coarse animal hair 

127.

52 

Gandhi Topi 

128.

52 

Khadi yarn 

129.

5303 

Jute fibres, raw or processed but not spun 

130.

5305 

Coconut, coir fibre 

131.

63 

Indian National Flag 

132.

6703 

Human hair, dressed, thinned, bleached or otherwise worked 

133.

6912 00 40 

Earthen pot and clay lamps 

134.

7018 

Glass bangles (except those made from precious metals) 

135.

8201 

 

Agricultural implements manually operated or animal driven i.e. Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry. 

136.

8445 

Amber charkha 

137.

8446 

Handloom [weaving machinery] 

138.

8802 60 00 

Spacecraft (including satellites) and suborbital and spacecraft launch vehicles 

139.

8803 

Parts of goods of heading 8801 

140.

9021 

Hearing aids 

141.

92 

Indigenous handmade musical instruments 

142.

9603 

Muddhas made of sarkanda and phoolbaharijhadoo 

143.

9609 

Slate pencils and chalk sticks 

144.

9610 00 00 

Slates 

145.

9803 

Passenger baggage 

146.

Any chapter 

Puja samagrinamely,- 

  1. Rudraksha, rudraksha mala, tulsikanthi mala, panchgavya 

(mixture of cowdung, desi ghee, milk and curd); 

  1. Sacred thread (commonly known as yagnopavit); 
  2. Wooden khadau; 
  3. Panchamrit,  
  4. Vibhuti sold by religious institutions,  (vi) Unbranded honey (vii) Wick for diya. 
  1. Roli 
  2. Kalava (Raksha sutra) 
  3. Chandantika 

147.

 

Liquefied petroleum gas for supply to household and non domestic exempted category (NDEC) customers   

148.

 

Kerosene oil sold under PDS 

149.

 

Postal baggage transported by Department of Posts 

150.

 

Natural or cultured pearls and precious or semi-precious stones; precious metals and metals clad with precious metal (Chapter  71) 

151.

 

Jewellery, goldsmiths’ and silversmiths’ wares and other articles (Chapter 71) 

152.

 

Currency   

153.

 

Used personal and household effects  

154.

 

Coral, unworked (0508) and worked coral (9601); 


Share this post on: Facebook Twitter (X)

Previous: The Enforcers of GST: Understanding Officers and Source of Their Powers Under the CGST Act Next: Decoding the GST Composition Scheme for Small Businesses

CA Raj Kumar Post Author Avatar
CA Raj Kumar

I love blogging and studying taxation. I write articles related to Tax laws and common issues in handling taxation in India. Often, common but small mistakes make things complicated. I write and share them to save precious time of others.


Leave a Reply

Your email address will not be published. Required fields are marked *