E-Way Bills (EWB) were implemented in India in 2018, as a means to replace the pre-existing transit pass system by a single electronic document that was valid throughout the country. They are mandatorily required when goods valued at over Rs. 50,000 are transported in India. EWBs mention the details of the goods that are being transported, the details of the mode of transport, as well as details of the recipient of goods.
E-Way Bills play an important role in the context of GST implementation in India, as they streamline the tracking of goods which aids tax compliance. However, there are also certain situations where you may need to cancel an E-Way Bill, and it is important that you’re aware of each of these. Here’s a list of the top seven reasons why you might need to cancel an E-Way Bill:
1. Presence of incorrect information
Mistakes can easily occur when filling out the details required in an E-Way Bill, and these errors can get flagged off during inspections. It is, therefore crucial that you make sure that the EWB for each consignment only has factually correct information entered in it. Errors such as the entry of erroneous GST details, the presence of an incorrect vehicle number, or an error in the consignee’s details are some of the reasons because of which you will be required to cancel an EWB and generate a fresh one.
2. Change in delivery vehicle
Transportation logistics are prone to late changes due to breakdowns, route optimisation or vehicle unavailability. If the vehicle that was originally documented in the E-Way Bill changes, you would need to cancel the EWB and generate a fresh one with the correct vehicle details.
3. Duplicate E-Way Bills
At times, an E-Way Bill gets generated twice for the same shipment owing to a system error or a human error in data entry. This could potentially cause confusion during an inspection, leading to possible penalties. It’s, therefore essential to cancel the duplicate entry immediately to ensure that the documentation for each shipment remains consistent with sales data.
4. Goods not transported within the validity period
E-Way Bills are valid for a single day for distances of less than 100 km, and an additional day for every additional 100 km that the goods mentioned in the bill need to travel. In case you’ve prepared goods for transport and generated an EWB but the transportation does not occur within the validity period of the bill, cancelling the EWB is necessary.
5. Cancellation of orders
Business transactions, particularly those on online marketplaces, often see post-order cancellation after the dispatching happens. If you’re faced with such a cancellation, you should immediately cancel the EWB in order to ensure that the transportation records match with your sales data.
6. Refusal of goods
Sometimes, a consignee refuses to accept the goods upon arrival for reasons such as quality issues, incorrect dispatch or some other discrepancies. If this happens, it implies that the transaction has not been completed as planned, which makes the E-Way Bill redundant. You would then need to cancel the EWB to align the transport documentation with the actual transaction status.
7. Return of goods
If you’re faced with a situation where goods need to be returned to the sender after being dispatched, do remember that the original E-Way Bill used for sending the goods to the consignee will not be applicable for the return journey. You would need to cancel the initial EWB, and generate a new one for the return journey.
Key Points to Remember About Cancelling E-Way Bills
Should you need to cancel an E-Way Bill, here are a few key points that you must remember before doing so:
- Cancellation of an E-Way Bill must be done within 24 hours from the generation of the bill
- Only the person who generated the E-Way Bill may cancel the bill
- It is illegal to use an E-Way Bill once it is cancelled
- An E-Way Bill may not be cancelled if it is verified by an officer
Conclusion
For businesses engaged in the sales or transportation of goods, managing regulatory processes such as E-Way Bills efficiently is important as it helps the business remain compliant. This reflects a business’s commitment to regulatory compliance and operational excellence, which is often viewed favourably by banking institutions and NBFCs in the context of providing financing to these businesses.
