The Applicability of E-way bills in Foreign Trade

The government of India is keen on building a robust and full proof and indirect taxation system and advanced digital technology is the biggest ally in this quest. The implementation of the Goods and Service taxes was closely followed by the introduction of the e-way bill which, as the name would suggest, is an electronically generated way bill, replacing the traditional way bills. These efforts show that the government is trying to integrate the Indian market to create more opportunities for businesses of all sizes while also ensuring a flawless and well off economic condition for the nation.

Key information on the e-way bill

The implementation of the e-way bill has brought about a significant change in inter-state and intra-state transportation of goods. What we are going to take a look at is how this compliance mechanism has affected the foreign trade sector. But before that let us take a quick look at some general features of the e-way bill in case you are not already aware.

Every tax payer with GST registration is bound to generate an e-way bill for a consignment of goods worth more than Rs 50,000 in case of inter-state transport. In case of intra state transport the benchmark can be higher. The bill is generated by the consignor or the transporter from on the GST portal. They can use software for e-way bill creation to get things done easily. This bill contains the information regarding the source, destination, the seller and the buyer and the transporter along with the details of the consignment itself. The e-way bill has a certain period of validity after having been generated. In a recent development the e-way bill is also being used to keep track of the distance travelled by the vehicle carrying the consignment. It is really aimed at tracking all transactions involving terrestrial movement and ensuring GST compliance.

How does it impact foreign trade?

India’s foreign exchange is largely dependent on the import and export of goods. The process of importing goods can be divided in three steps. The first step is the shipping of the foreign good to an Indian harbour or an airport. The second step is the transportation of the goods to an inland container depot or ICD. Then the third step is transportation of the goods to the warehouse or the factory of the buyer.

The e-way bill is required only for the third step that is when the consignment is transported to the importer’s home depot, factory or warehouse.

While exporting goods the exporter has to generate an e-way bill for the transportation from the factory to the ICD. High sea selling does not require any e-way bill since the oceans do not come under any nation’s territory.

However, while carrying the consignment without an e-way bill the transporter must carry the supply bill and other relevant documents.

E-way bill exemptions

In certain cases tax payers are exempted from carrying e-way bill. There is a long list of things including liquid petroleum gas for domestic use, kerosene, petroleum crude and precious and semi precious stones and metals the transportation of which do not require an e-way bill.

Apart from that if the mode of conveyance is not motorized, you need not carry an e-way bill. The transportation of goods from one port or station to another does not require e-way bills. Also any transportation under customs supervision is exempted.

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