Trade globalization is ushering in sweeping trends around cross-border commerce, encompassing consumption patterns, distribution mediums, and payment interfaces. Indian shores remain buzzing with ships and aircraft offloading import containers on an everyday basis.
Now, the term ‘inter-state’ encompasses goods crossing physical state borders within India as well as entering cross-country, extending to imports or exports scenarios. Therefore, warranting the threshold value triggers e-way bill documentation, which is necessary for imports as well.
Navigating import clearances can resemble the conquest of a bureaucratic maze—customs examinations, license verifications, foreign inward remittances, and more! Now add another compliance layer called e-way bills amid this documentation battle.
Let’s examine whether e-way bills are necessary for goods entering Indian boundaries and the consequences of skipping this formality.
Import E-waybill Requirements
Now that the imported consignments are customs-cleared, one feels they are ready for use after almost two weeks of pensive waiting. However, just before you instruct logistics to start trucking them inland, the transporter calls up, asking, “Sir, do you have the e-way bills for this?”
You wonder what additional compliance warrants tackling now. Why are documents like customs attestation, FIRCs, etc. feeling insufficient suddenly? What is this new requirement, and why is it necessitated?
E-way bills get mandated for cargo movements beyond state borders valued over Rs. 50,000 to enable tracking of consignments. This applies to imports as well, since they qualify as inter-state supply transactions.
As per Rule 138(14) of the CGST Rules, when imported goods transit after clearance from the customs station towards the importer’s domestic warehouse or factory, e-way bills become essential.
However, trade parties have flexibility in terms of when and who generates this mandated documentation.
E-waybill Necessity for Imports
Those relying on global sourcing channels to fuel enterprise growth often query why tax authorities formulate multi-layered trade requirements, making compliance processes increasingly cumbersome.
In the case of e-way bills too, importers wonder: when goods movements are already trackable using customs attestations, purchase registrations, and item-wise invoices, why warrant additional documentation?
At first glance, the e-way bill may seem like trivial paperwork, given piles of other import documents already in place. However, its relevance is crucial, considering:
The interstate nature of imports makes them liable for IGST payments, which buyers need to deposit while filing GSTR-3B returns. Now authorities require substantiation as to whether due taxes were indeed paid at the time of customs clearance.
E-way bills raised at the time of cargo transit from port to importer premises contain the same particulars as those submitted across the Bill of Entry and customs documents and help corroborate the transaction. Any mismatch in details like value or HSN classification across documents can increase scrutiny.
Thus, for diligent importers, integrating e-way bill compliance paves the way for seamless availability of input tax credits.
There have been past indirect tax regime instances where imports entered city borders but were secretly diverted to local markets illegally without duties, causing huge revenue losses.
E-way bills mandate that import cargo should reach the designated business premises of the importer, avoiding diversion.
For example, if goods originating from China take Mumbai port customs clearance but have Ludhiana as the final destination, entry and exit checkposts can verify through the e-way bill if movement indeed progressed to Punjab.
Supports claim reconciliation and refund applications to authorities later.
Thus, this document bears significance across the trade value chain, and inspector vigilance during transit makes diligent compliance imperative.
Import transactions may necessitate dispute resolution if anomalies arise post-clearance around aspects like taxation, classification, valuations adopted, etc.
Thus, we note that beyond just enabling cargo tracking, the e-way bill bears systemic relevance by integrating cross-border trade with domestic taxation frameworks through structured documentation protocols, aiding transparency.
Now that we have weighed the reasons driving their requirements, let us walk through the execution procedures.
Generating an e-waybill for import compliance
While import-goods movement warrants e-way bills, parties like customs brokers or transporters can facilitate documentation. Earlier, we weighed reasons that make e-way bill issuance an unavoidable import trade formality. Now that we have convinced ourselves of its importance, let us walk through the procedural steps to furnish one:
- Customs Broker Role: Have expertise across clearance processes, hence can generate e-way bills on the importer’s behalf by capturing necessary particulars.
- Transporter Role: Where goods get transferred from the gateway port to the warehouse by multiple carriers, individual transporters can generate e-way bills for respective leg shipments.
Now let’s see the procedural aspects of imports:
Authorized signatory logs into https://www.ewaybillgst.gov.in using valid credentials
Enter party details
Importer details like GSTIN, business name, and partner transporter information need capture.
Specify the supply type
‘Import’ needs selection as the transaction subtype from the dropdown options.
Input item and invoice details
Bill of entry data like number, date, goods description, value, etc. needs furnishing.
‘99999’ gets tagged against a foreign supplier, while the importer’s address reflects delivery.
Generate an e-way bill.
On submitting information, the system generates a unique 12-digit number.
Therefore, we understand that, be it accessing the portal directly or seeking customs broker assistance, generating an import e-way bill by providing necessary trade and logistical references seems quite straightforward for ethical importers prioritizing compliance integrity.
Hence, by directly accessing the portal, or if outsourced, the necessary issuance protocols for import e-way bills can be fulfilled by businesses.
Import Documentation: E-waybill Need
Like exports, paperwork necessities are exhaustive for imports as well, comprising crucial documents like:
- Bill of Entry
- Bill of Lading
- Import License
- Customs Clearance Papers
Amid this array of documents, the e-way bill also occupies significant relevance:
|E-way Bill Relevance
|Bill of Entry
|BOE details reflected during the e-way bill generation
|Bill of Lading
|Transporter references and vehicle details were reconciled.
|Ensures a valid license is in place for goods classification.
|Cross-verification of clearance protocol compliance.
Thus, the e-way bill integrates with multiple allied documents, furnishing movement legitimacy. Absence, therefore, can have adverse implications.
Now that we have weighed the significance, let’s examine the regulatory provisions driving this compliance.
Import Regulations and E-Waybill Mandate
Formulating trade compliance guidelines warrants extensive debate, weighing quantitative benefits against the resulting procedural complexities for the regulated.
In the case of e-way bills, a series of discussions happened around goods classifications or trade modes where exceptions could be allowed before firming up detailed provisions. Let’s examine key extracts:
Section 68 of the CGST Act 2017:
This section specifically empowers the government to formulate documentation procedures for inter-state or intra-state movement of goods as they deem fit for visibility around cargo transit across state borders, along with improved transparency.
Thus, Section 68 allows provisions around e-way bill compliance to be notified as a mandatory documenting procedure before transporting goods, thereby plugging gaps around unverifiable transactions.
Section 20 of the CGST Act:
As imports are classified as inter-state trade and liable to Integrated GST, this section stipulates that necessary payment evidence has to be furnished to substantiate whether applicable IGST deposition has indeed happened.
Thus, for imports, e-way bills generated at the time goods move inland from the customs station help demonstrate such compliance and aid revenue reconciliation by authorities.
Rule 138(14) of the CGST:
Rule 138(14) of the CGST (Central Goods and Services Tax) Rules, 2017, outlines specific scenarios where an e-way bill is not required for the movement of goods. These exceptions aim to streamline compliance procedures and reduce unnecessary burdens on businesses while maintaining adequate safeguards against tax evasion.
Additionally, e-way bills are not necessary for goods in transit through India from one foreign country to another. This exemption facilitates the seamless cross-border movement of goods without unnecessary delays or procedural hurdles.
Notification 39/2018-Central Tax:
Notification 39/2018-Central Tax, dated September 4, 2018, introduced significant amendments to the CGST Rules, 2017, specifically in the context of e-way bills. These amendments aimed to address practical challenges faced by businesses and further refine the e-way bill system.
Furthermore, the notification introduced the concept of ‘pre-routed’ e-way bills, enabling businesses to generate e-way bills for goods that would be transported along a predefined route. This allowed for better planning and coordination of logistics activities.
Thus, for sizable usual import consignments, typically customs station to importer domestic premises transit journey, the mandate holds formidable relevance everywhere.
The next section captures key procedural nuances.
Requirements for E-Waybill in Import Transactions
Let’s analyze key aspects concerning e-way bill issuance for imports:
Customs Station to Registered Place Movement
Unlike other country trade regulations, India’s e-way bill provisions are applicable only for the Customs Station, or ICD stretch, from where imports get cleared to the importer’s domestic premises.
For example, imports taking Mumbai port clearance destined for Pune would not require an e-way bill for port handling aspects. However, when containers are dispatched from Mumbai ICD towards Pune, an applicable e-way bill gets mandated.
The Rs. 50,000 minimum threshold criteria depends on assessable value determination inclusive of add-on costs like imported IGST while applying Customs Act, 1962 valuation norms.
Thus, the basis value declared while submitting Bill of Entry filings has to be analyzed for e-way bill applicability.
The portal generates an e-way bill with validity from point A (customs station) to point B (importer factory distance entered). The greater the kilometers, the longer the validity period.
If the journey spans beyond this duration, the transporter can initiate extension requests on the portal, stipulating delays if any.
But data shared, like vehicle numbers and item details, cannot be edited, unlike domestic e-way bills.
B2B general imports warrant it; exemptions are given for personal use imports below thresholds.
BOE and GSTIN Reference
The 10-digit Bill of Entry identity number, comprising the first two digits of the relevant year and the next eight digits of the serialized BOE number, mandates capture while generating import e-waybills.
E.g., if the BOE number is 112233-5/2020, 22 signifies the year 2022, and 1122335 is the running serial number.
This integration helps tax officials cross-verify if cargo cleared from customs also indeed moved further inland as declared.
Transit cargo from Nepal, Bhutan, or the SEZ to DTA movements does not explicitly require e-way bills currently.
Thus, we see that for usual B2B imports having a commercial nature beyond the threshold value, the e-way bill compliance mandate holds relevance right from the point imported goods get customs cleared post-assessment.
To summarize, we noted that the inter-state nature of imports, coupled with revenue visibility imperatives, makes e-way bill issuance unavoidable for general merchandise imports entering the country.
By integrating compliance requirements early on, trade stakeholders can gear up for seamless clearances, averting unwarranted delays or disputes. With increasing digitization measures enhancing information availability coupled with outsourcing assistance, ensuring diligent documentation is becoming increasingly feasible.
Frequently Asked Questions
How to reckon import without duty transactions below the threshold value but above Rs. 50,000 from an e-way bill perspective?
Where the consignment’s assessable value is under Rs. 50,000, making it exempt from IGST under the Customs Act of 1962, the applicable GST e-way bill threshold will apply, mandating documentation compliance since movement is interstate.
Who provides transport documents where imported goods are shipped in containers by sea until ICD and then transported to the factory by road?
The carrier would issue a lorry receipt for the transhipment leg from ICD to factory, on which the transporter has to enter vehicle details while generating an import e-way bill covering road movement.
How to assess used machinery imports from an e-waybill perspective since the Bill of Entry doesn’t capture item-wise value breakup?
In the absence of invoice-wise value details for second-hand goods or bulk imports, the total assessable value gets considered under the Customs Act to validate the Rs. 50,000 threshold applicability for e-way bill generation rather than item-level values.