E-Way Bill (Rule 138, CGST Rules 2017)

By Vikram Mehta | Updated March 2026

What Is an E-Way Bill?

An E-Way Bill (Electronic Way Bill) is a compliance document mandated under Rule 138 of the CGST Rules, 2017 for the movement of goods valued above INR 50,000 (inclusive of GST). It must be generated on the official E-Way Bill portal before goods begin transit — whether the movement is inter-state or intra-state. The system, rolled out nationally on April 1, 2018, replaced the fragmented state-level waybill regimes that existed under the pre-GST VAT structure.

For foreign companies operating in India through a wholly-owned subsidiary, branch office, or project office, E-Way Bills are an unavoidable part of daily operations the moment goods move — whether raw materials arriving at a factory, finished products shipped to distributors, or imported equipment transported from a port to a warehouse. Non-compliance results in detention of goods, seizure of the vehicle, and penalties of up to 200% of the tax payable under Section 129 of the CGST Act.

The E-Way Bill system is fully digital. As of July 2025, the government operates two parallel portals — E-Way Bill 1.0 (ewaybillgst.gov.in) and E-Way Bill 2.0 (ewaybill2.gst.gov.in) — to ensure uninterrupted service. Multi-factor authentication (MFA) became mandatory for all taxpayers from April 1, 2025, regardless of turnover.

Legal Basis

The E-Way Bill system derives its authority from multiple provisions of the GST framework:

• Section 68 of the CGST Act, 2017 — Empowers the government to require persons in charge of conveyances to carry prescribed documents (including E-Way Bills) and allows inspection of goods in movement.
• Rule 138 of the CGST Rules, 2017 — The operative rule prescribing when an E-Way Bill must be generated, who must generate it, the form (GST EWB-01), validity periods, and exemptions.
• Rule 138A — Documents and devices to be carried by the person in charge of the conveyance (printed or electronic copy of the E-Way Bill, invoice/bill of supply/delivery challan).
• Rule 138B — Verification of documents and conveyances by proper officers, including physical verification procedures.
• Rule 138C — Inspection and verification of goods, requiring the officer to issue a report in Form GST EWB-03 within 3 days of inspection.
• Rule 138D — Facility for uploading information regarding detention of vehicles on the common portal.
• Section 129 of the CGST Act — Detention, seizure, and release of goods and conveyances in transit. Penalties up to 200% of tax payable.
• Section 130 of the CGST Act — Confiscation of goods and conveyances and levy of penalty in cases involving intent to evade tax.

When Is an E-Way Bill Required?

An E-Way Bill must be generated before the commencement of movement of goods when the consignment value exceeds INR 50,000. The consignment value includes the value of goods, CGST, SGST/UTGST, IGST, and cess. This threshold applies per consignment per invoice, not per vehicle.

Who Must Generate It?

Part A and Part B

Part A captures consignment details: GSTIN of supplier and recipient, place of dispatch and delivery (PIN codes), invoice or challan number and date, HSN code, value of goods, and reason for transport. Part B captures vehicle details: vehicle number or transporter ID. The E-Way Bill is considered complete — and its validity clock starts — only when Part B is filled.

For movements within 50 km in the same state, Part B is not mandatory. However, Part A must still be completed.

Validity Periods by Distance

Once Part B is filled, the E-Way Bill's validity depends on the distance and type of cargo:

One day means 24 hours from the time of generation (midnight-to-midnight is not the rule — it is exact hours). The validity can be extended before or within 8 hours of expiry by updating the portal with the reason for delay. From January 1, 2025, the maximum extension is capped at 360 days from the original generation date.

Exemptions — When E-Way Bill Is Not Required

Rule 138(14) lists specific exemptions. No E-Way Bill is needed for:

• Goods transported by non-motorised conveyance (bullock cart, hand cart, etc.)
• Goods moved under customs bond or supervision from ICD/CFS to a customs port or between customs stations
• Transit cargo to or from Nepal or Bhutan
• Goods exempted under GST notifications — including fresh fruits, vegetables, unprocessed meat, milk, curd, eggs, books, handloom products, and LPG for household use
• Empty cargo containers being transported
• Goods transported by or on behalf of the Ministry of Defence
• Consignment value below INR 50,000 (except for specified goods like jewellery, where states may set lower thresholds)
• Movement of goods caused by defence formations under the Ministry of Defence

Some states have also raised the intra-state threshold. Maharashtra, Delhi, Tamil Nadu, Bihar, and Punjab require E-Way Bills only for intra-state movements exceeding INR 1,00,000. Rajasthan exempts intra-city movements up to INR 2,00,000. However, inter-state movement always follows the central INR 50,000 threshold.

How to Generate an E-Way Bill

Three methods are available:

1. Online Portal

Log in to ewaybillgst.gov.in (or ewaybill2.gst.gov.in) using your GSTIN credentials. Navigate to "Generate New" under the E-Way Bill menu. Fill Part A with invoice details, HSN codes, and consignment value. Fill Part B with the vehicle number. Submit — the system generates a unique 12-digit E-Way Bill Number (EBN).

2. SMS

After registering your mobile number on the portal, send a structured SMS to generate, update, or cancel E-Way Bills. Useful for transporters with limited internet access in rural India.

3. API Integration

Large enterprises and logistics companies integrate their ERP systems (SAP, Oracle, Tally) directly with the E-Way Bill API for automated generation. This is the recommended approach for foreign subsidiaries handling high volumes — it eliminates manual entry errors and ensures compliance at scale.

Document Date Restriction

From January 1, 2025, E-Way Bills can only be generated for documents (invoices, challans) dated within 180 days of the generation date. Backdated document entries are no longer permitted.

Multi-Vehicle and Consolidated E-Way Bills

India's logistics network frequently involves transshipment — goods moving from a truck to a train to another truck. The E-Way Bill system handles this through specific mechanisms:

Multi-Vehicle (Transshipment)

When goods are transferred from one vehicle to another during transit, the transporter must update the vehicle number in Part B on the portal before the goods resume movement. For transfers within 10 km in the same state, this update is not required.

Consolidated E-Way Bill (Form GST EWB-02)

When a single vehicle carries consignments covered by multiple individual E-Way Bills, the transporter generates a Consolidated E-Way Bill in Form GST EWB-02. This consolidates all individual EBNs into a single document for the vehicle, simplifying roadside checks. Each underlying consignment retains its own E-Way Bill.

Cancellation

An E-Way Bill can be cancelled within 24 hours of generation — but only if it has not been verified by an officer during transit. Once verified, cancellation is not possible.

E-Way Bill for Imports

Foreign companies importing goods into India must generate an E-Way Bill when goods move from the port, Inland Container Depot (ICD), or Container Freight Station (CFS) to the importer's warehouse or factory. The requirement arises after customs clearance — once the Bill of Entry is filed and customs duty is paid.

When generating an E-Way Bill for imports:

• Transaction sub-type: Import
• Document type: Bill of Entry
• Supplier details: Enter "URP" (Unregistered Person) with PIN code 999999 and state as "Other Countries"
• Recipient details: Importer's GSTIN and delivery address
• Distance: Measured from the ICD/port to the importer's place of business

Movement from one customs station to another under customs bond or supervision is exempt. High sea sales — where ownership changes while goods are still on the vessel — do not require E-Way Bills, as the sale occurs outside Indian territory. For companies with an Import Export Code, integrating E-Way Bill generation into the customs clearance workflow prevents delays at the port.

How This Affects Foreign Investors in India

E-Way Bill compliance is a daily operational reality for any foreign company with a physical presence in India that involves movement of goods:

• Manufacturing subsidiaries generate E-Way Bills for every outbound shipment, every raw material receipt, and every inter-factory transfer. A factory in Gujarat shipping to distributors across India may generate hundreds of E-Way Bills monthly.
• E-commerce operations face unique challenges — each delivery to an end consumer above INR 50,000 requires an E-Way Bill, and marketplace models create confusion about whether the seller or the marketplace operator is responsible.
• Import-heavy businesses must coordinate between customs brokers, transporters, and internal teams to ensure E-Way Bills are generated immediately after customs clearance. Delays in E-Way Bill generation at the port mean goods sit idle, incurring demurrage.
• SEZ units moving goods between the SEZ and the Domestic Tariff Area (DTA) must generate E-Way Bills for every such movement, even for job work.

The penalty regime is severe. Unlike many compliance requirements where penalties are administrative fines, E-Way Bill violations result in physical detention of goods and vehicles — meaning your supply chain stops until the matter is resolved.

Penalties for Non-Compliance (Section 129)

Section 129 of the CGST Act governs detention, seizure, and release of goods transported in contravention of E-Way Bill requirements:

The proper officer must issue a detention notice within 24 hours. The taxpayer has 7 days to pay the penalty and secure release. For perishable or hazardous goods, timelines are compressed at the officer's discretion. To appeal, a pre-deposit of 25% of the penalty amount is required.

Recent High Court rulings (including the Allahabad High Court in 2025) have held that minor procedural lapses — such as an expired E-Way Bill caused by vehicle breakdown — do not automatically justify penalties under Section 129 if there is no intent to evade tax. However, this defence requires documented evidence of the breakdown.

Common Mistakes

• Generating the E-Way Bill after goods have already started moving. The law requires generation before commencement of movement. Officers at check-posts verify the timestamp — if the E-Way Bill was generated after the goods were intercepted, the penalty applies in full regardless of intent.
• Ignoring state-specific intra-state thresholds. The central threshold is INR 50,000 for inter-state movement, but states like Maharashtra and Delhi set INR 1,00,000 for intra-state movement. Applying the wrong threshold — especially when shipping within a state that has a higher limit — leads to unnecessary compliance burden, while applying the higher state threshold to inter-state shipments leads to penalties.
• Failing to update Part B during transshipment. When goods change vehicles mid-transit (common in India's hub-and-spoke logistics), the new vehicle number must be updated on the portal before movement resumes. Many companies update retroactively — by which time an inspection may have already flagged the mismatch.
• Not extending the E-Way Bill before expiry. Extensions must be requested before expiry or within 8 hours after expiry. Once this window passes, a new E-Way Bill must be generated, which may be impossible if the original invoice date is more than 180 days old. Goods stranded with an expired, non-extendable E-Way Bill face certain detention.
• Treating Bill of Entry number as the invoice number for imports. When generating an E-Way Bill for imported goods, the document type is "Bill of Entry" and the supplier is "URP" with PIN code 999999. Companies that enter their own PAN-linked invoice number instead create a mismatch that triggers scrutiny at checkpoints.

Practical Example

StellarTech GmbH, a German precision engineering company, operates a wholly-owned subsidiary — StellarTech India Pvt Ltd — in Pune, Maharashtra. The subsidiary imports CNC machine components from Germany and distributes finished products across India.

Scenario 1: Import Consignment

StellarTech India imports components worth INR 18,00,000 (CIF value INR 15,00,000 + customs duty INR 2,25,000 + IGST INR 75,000) through Nhava Sheva port. After filing the Bill of Entry and paying customs duty, the customs broker generates an E-Way Bill for transport from Nhava Sheva to the Pune factory — a distance of 165 km. Validity: 1 day (under 200 km). The goods reach Pune within 6 hours. No issues.

Scenario 2: Interstate Shipment Gone Wrong

StellarTech India ships finished products worth INR 8,50,000 from Pune to a distributor in Chennai (1,175 km). The logistics team generates the E-Way Bill with a validity of 6 days (1,200 km bracket). Due to heavy monsoon flooding in Karnataka, the truck is delayed by 5 days. On Day 7, with the E-Way Bill expired, the truck is intercepted at the Tamil Nadu border.

Because the logistics team did not extend the E-Way Bill within the 8-hour post-expiry window, the goods are detained. IGST payable on the consignment is INR 1,53,000 (18% of INR 8,50,000). The penalty under Section 129: 200% of INR 1,53,000 = INR 3,06,000. The truck and goods are held for 3 days until payment is processed.

Total cost of non-compliance: INR 3,06,000 in penalties + 3 days of truck detention charges (approximately INR 15,000) + delayed delivery to the customer. Had the team extended the E-Way Bill on Day 5 (citing weather delay), the entire situation would have been avoided at zero cost.

Key Takeaways

• An E-Way Bill is mandatory under Rule 138 of the CGST Rules for moving goods worth over INR 50,000 — generate it before the goods leave the premises
• The bill has two parts: Part A (consignment details) and Part B (vehicle details). Validity starts only when Part B is completed.
• Validity is 1 day per 200 km for regular cargo. Extensions must be requested before or within 8 hours of expiry, with a maximum cap of 360 days from the original generation date.
• Imported goods require an E-Way Bill for transport from the port/ICD to the importer's warehouse — use Bill of Entry as the document type with supplier as "URP"
• Penalties under Section 129 are severe: 200% of tax payable, plus physical detention of goods and vehicles until payment
• From April 1, 2025, multi-factor authentication is mandatory for all users of the E-Way Bill portal, regardless of turnover

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