The All India Tax Associates Federation (AITAF) called upon the Finance Minister to abolish E-way Bills under the GST framework, arguing that the system imposes excessive compliance costs on small businesses. This demand followed the Central Board of Excise and Customs (CBEC, now CBIC) issuing new regulations governing e-way bill requirements for goods transportation across India.
What Is the E-Way Bill System Under GST?
The e-way bill is an electronic document required for transporting goods valued above Rs. 50,000 from one location to another under the GST regime. The system was designed to track the movement of goods and ensure tax compliance during transit.
Every registered person who causes the movement of goods must generate an e-way bill on the e-way bill portal before the goods are transported. The bill contains details of the consignor, consignee, transporter, goods description, value, and vehicle number. The e-way bill has a defined validity period based on the distance of transportation.
The system was introduced under Section 68 of the CGST Act, read with Rule 138 of the CGST Rules, 2017.
Why Did AITAF Oppose E-Way Bills?
AITAF raised several concerns about the practical implementation of the e-way bill system, particularly its impact on small and medium enterprises.
Insufficient confirmation time. The federation argued that the time allocated for recipients to accept or reject an e-way bill was inadequate. Recipients often operate in areas with limited internet connectivity, making timely digital confirmation challenging. This creates a compliance gap that penalises the transporter rather than addressing actual tax evasion.
Disproportionate burden on small businesses. Small traders and manufacturers, who form the backbone of Indian commerce, often lack the digital infrastructure and trained personnel required to generate and manage e-way bills for every consignment. The cost of compliance, including software, internet access, and staff training, is disproportionately higher for smaller businesses relative to their turnover.
Contradiction with GST objectives. AITAF highlighted that GST was introduced with the stated aim of simplifying business operations and facilitating smoother movement of goods across India. The practice of physical verification of goods during transit and the potential detention of vehicles for e-way bill discrepancies directly contradicts this objective. Such measures create supply chain bottlenecks and increase transit times.
Risk of harassment. The federation expressed concern that physical inspections of goods and vehicles at checkpoints could lead to harassment of transporters and traders by enforcement officials, similar to the pre-GST era of state-level checkpoints that GST was designed to eliminate.
E-Way Bill Requirements and Compliance
| Aspect | Details |
| Threshold value | Rs. 50,000 (aggregate value of consignment) |
| Who generates | Consignor, consignee, or transporter |
| Portal | ewaybill.nic.in |
| Validity (up to 200 km) | 1 day from generation |
| Validity (every additional 200 km) | Additional 1 day |
| Extension | Can be extended before or within 8 hours of expiry |
| Exemptions | Goods transported by non-motorised conveyance, goods specified in Annexure to Rule 138 |
Current Status of E-Way Bills Under GST
Despite AITAF’s opposition, the e-way bill system was implemented in phases. Inter-state e-way bills became mandatory from April 1, 2018, while intra-state implementation was completed in stages across different states by June 2018.
Over time, the government introduced several improvements to address compliance concerns raised by trade bodies. The e-way bill portal now supports multiple modes of generation, including SMS, API integration, and bulk upload through Excel files. The validity period was extended, and the process for updating vehicle details was simplified.
The threshold of Rs. 50,000 has remained unchanged since implementation. However, individual states may reduce this threshold for intra-state movement if they choose.
As of FY 2025-26, the e-way bill system generates over 10 crore bills monthly, indicating widespread adoption. The data from e-way bills has also helped tax authorities identify cases of tax evasion by comparing declared supply values with actual goods movement.
Impact on Small Businesses
The concerns raised by AITAF remain partially valid even after implementation. Small businesses continue to face challenges related to the e-way bill system.
Businesses operating in areas with poor internet connectivity sometimes struggle to generate e-way bills in real time. Part-load consignments, where multiple small shipments are combined on a single vehicle, create additional complexity in e-way bill generation and management.
However, the government has addressed some concerns by introducing the Composition Scheme exemption for specific categories and by allowing transporters to generate consolidated e-way bills for multiple consignments.
The debate over e-way bill compliance costs versus tax revenue benefits continues to be a topic at GST Council meetings.
E-Way Bill Penalties for Non-Compliance
| Violation | Penalty |
| Transporting goods without a valid e-way bill | Penalty under Section 129: tax + penalty equal to 200% of tax payable |
| E-way bill generated but not carried during transport | Subject to penalty and detention of goods and vehicles |
| E-way bill expired during transit. | The extension must be completed within 8 hours of expiry; otherwise, a penalty applies. |
| Incorrect details in the e-way bill | Goods liable for detention and penalty under Section 129 |
| Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Consult a qualified tax professional for advice specific to your situation. |
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Frequently Asked Questions
Q1: What is an e-way bill under GST?
An e-way bill is an electronic document required for transporting goods valued above Rs. 50,000 under the GST regime. It must be generated on the e-way bill portal before the goods are moved from one location to another.
Q2: Who is required to generate an e-way bill?
Any registered person who causes the movement of goods worth more than Rs. 50,000 must generate an e-way bill. This includes consignors, consignees, and transporters. Unregistered persons can also generate e-way bills through the portal.
Q2: Who is required to generate an e-way bill?
Transporting goods without a valid e-way bill can lead to detention of goods and the vehicle. The penalty includes the applicable tax amount plus an additional penalty equal to 200% of the tax payable, or Rs. 10,000, whichever is higher.
Q4: Can an e-way bill be cancelled after generation?
Yes, an e-way bill can be cancelled within 24 hours of generation, provided the goods have not been verified in transit by a tax officer. After 24 hours, cancellation is not permitted on the portal.
Q5: Are there any exemptions from the e-way bill requirement?
Yes. Goods transported by non-motorised conveyance, goods exempt from GST, goods transported within a distance of 10 km within the same state for specific purposes, and certain categories listed in Annexure to Rule 138 are exempt from e-way bill requirements.
