UDATE on Issues regarding E-way Bill

This update intends to discuss about the issues arising in case of generation of E-way bill in case of Job Work: -
1.      In case of inter-state movement of goods/capital goods for job work, the value cap of Rs. 50,000/- is not applicable. This is due to third proviso to Section 138(1) of the CGST Act which reads as follows:-

“Provided also that where goods are sent by a principal located in one State or Union territory to a job worker located in any other State or Union territory, the e-way bill shall be generated either by the principal or the job worker, if registered, irrespective of the value of the consignment:”

The same wording is used in GST Rules of Rajasthan Government. Thus, value limit is not applicable in case of movement of goods for job work from one state to another. But the same is not applicable in case of movement of goods within state. Hence, the limit of Rs. 50,000/- is applicable for movement of goods on job work basis within state of Rajasthan.

2.      Further, there is no relaxation of distance in Rajasthan as is being done in Gujarat where e-way bill is applicable on movement of goods from one city to another city. Hence, e-way bill is to be generated in state of Rajasthan for every movement of goods in a vehicle. Hence, the job work movement of goods is also not exempted and we have to generate e-way bill of each and every movement of goods. Even the inputs/capital goods moving for repair and maintenance will also require e-way bill if the value of goods exceeds Rs. 50,000/-.
Such type of repair works are quite frequently takes place in many industries. For example, Stainless steel patta patti industry sends machinery parts such as backup roll, work roll, coupling etc to the job worker on day-to-day basis for the process of grinding. Hence, e-way bill is to be generated for each such movement as the value of such parts is more than Rs. 50,000/-.

3.      Moreover, e-way bill can be generated by principal or job worker in case of return back of goods by job worker. This has been provided in Rule 138 cited supra. Event the circular number 38/12/2018 dated 26.03.2018 also allows the movement of goods either by principal or job worker. This can be done either by endorsement of job work challan or by issuance of new challan by job worker. However, the e-way portal shows that option of “job work return” in inward transaction type and as soon as the same is entered then the address of registrant comes in “Bill to” column.

Hence, it implies that the principal has also to generate e-way bill in case of return of job work. Normally, in industry the goods move from one job worker to another job worker. This is most common in textile industry. Goods move to one job worker for bleaching and then it send to another job worker for dyeing and thereafter to another job worker for printing and so on for finishing, washing, felt and packing. In each case, the principal has to generate e-way bill for each onward movement. Thus, it will make the procedure very cumbersome. The difficulty is immense if the principal is situated in another city.

Although the law as well as circular provides for the movement of goods by job worker but the e-way portal provides for job work return by principal only. The other option to job worker in case of return of job work goods generate the challan in other column. This anomaly in e-way portal is creating problems. Hence, in case of job work return, the portal should allow to enter name either in “Bill to” or “Bill from”. It will smoothen the process of e-way bill.

4.      Raw materials/Goods/ Machinery parts are sent for processing from one job worker to another job worker in various consignments. The material sent for processing is the intermediate material and have consignment value of more than Rs. 50,000/-. Since there is frequent movement of goods and that too in huge quantities, it is difficult to generate e-way bill for every movement of goods.

Besides, each e-way bill is required to be an adjunct to tax invoice or delivery challan and since the goods sent on job work involves several processes to be undertaken by different job workers, it is extremely complex to create new delivery challan with every movement of goods. In addition, if new delivery challans are issued every time, it will be intricate to keep their track record for the purpose of filing ITC-04. Hence, the requirement of issuance of e-way bill of labour intensive industry like textile and handicraft industry should be dispensed with.

5.      There was also practical difficulty pointed out by industry that movement of cars for repair work will also require e-way bill. Similarly, computer or mobile phone of more than Rs. 50,000/- for repairing will also require e-way bill. Even one scholar asked whether taking out car or mobile phone for official work will also require e-way bill. This seems to be very absurd. But author of this update does not have any answer to the same.

The content of this GST update is for educational purpose only and not intended for solicitation.
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UDATE on Issues regarding E-way Bill

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