The Role of E-Way Bills in Supply Chain Efficiency
The e-way bill system was launched across India on April 1, 2018, under the Goods and Services Tax (GST) rules. It was created to improve the flow of goods within the country. Before this system, logistics relied on physical documents that were easier to manipulate. This used to cause significant delays at checkpoints.
The e-way bill replaced these documents with an online system. Now, it has become harder for anyone to cheat. Also, it ensures quicker movement of goods across states. This change is especially important for businesses and transport companies, as it improves supply chain efficiency.
Want to gain an in-depth understanding? In this article, let’s understand what e-way bills are and how they are simplifying logistics.
What are e-way bills
The e-way bill is an electronic document. It is required for moving goods within India under the GST system. If the value of goods exceeds Rs. 50,000 (based on a single invoice, bill, or delivery challan), the transporter must generate an e-way bill on the government portal (www.ewaybillgst.gov.in).
Post its generation, the transporter is assigned a unique E-Way Bill Number (EBN). Then, this number is shared with the supplier, buyer, and transporter. As of August 2024, e-way bill generation reached a record of 10.54 crore bills. This statistic clearly shows how deeply this system has penetrated across India.
How do e-way bills improve supply chain efficiency
E-way bills digitise the movement of goods. This improves the efficiency of logistics operations and enhances transparency. Let’s see how e-way bills are making supply chains more efficient:
1. Faster transportation of goods
The e-way bill system has made moving goods within and across states much faster. Earlier, trucks had to stop at multiple check posts for inspections. This led to long delays. However, with the e-way bill, everything is tracked in real-time online.
Hence, physical checks at borders are no longer needed. This saves time for transporters and businesses by improving delivery schedules
Additionally, the e-way bill system reduces confusion by replacing bulky paperwork with a simple digital system. Let’s understand through an example;
- Say you ordered a smartphone from an online marketplace.
- Earlier, when such goods were shipped, transporters had to carry physical invoices and documents to show at multiple check posts.
- But now, with the e-way bill system, all shipment details (like the phone’s value, seller, buyer, and destination) are uploaded digitally.
- The transporter doesn’t need to manage bulky paperwork anymore.
- This ensures goods reach your doorstep faster.
2. More transparency
In the e-way bill system, all the details about the ‘transported goods’ (such as their value and destination) are recorded digitally. This makes it harder for anyone to hide or misreport information. Furthermore, these details are shared among the:
- Seller
- Buyer
- Transporter
All these parties are responsible for ensuring the information is correct. Such a process reduces tax evasion because authorities can easily verify the movement of goods. It also builds trust in the system, as businesses know that the process is fair and properly monitored.
3. Real-time tracking of goods
In India, each e-way bill is generated electronically via the GST Network (GSTN). It captures all the essential details such as the:
- Consignor
- Consignee
- Value of goods
- Transportation specifics.
Now, to track the movement of goods in real time, transporters can integrate their systems with the e-way bill portal using APIs. Such an integration allows direct monitoring of the status of consignments as they move through the supply chain. This tracking is also particularly beneficial for banks and NBFCs, which often finance logistics operations.
Conclusion
The e-way bill system has significantly transformed the logistics and supply chain sector by digitising the movement of goods. By doing so, it has eliminated delays caused by manual paperwork and physical inspections.
Additionally, this system has enhanced transparency by recording all shipment details digitally. This makes it harder to misreport information. Real-time tracking further adds value by allowing transporters to easily monitor the movement of goods.
In this way, e-way bills have strengthened compliance under the GST framework and increased the supply chain efficiency.