West Bengal exempts e-way bill for job work, but industry may not complain

The West Bengal government has exempted job work from the requirement of generating e-way bill for intra-state movement of goods, a move that may raise the burden on the industry to track rules for different states.

However, the industry might not complain as this is a beneficial provision, even as there is distortion in one nation-one tax principle of GST, say experts.

The state government has already raised the threshold to generate bills from Rs 50,000 to Rs 100,000 worth of transported goods. 

States can tinker with e-way bills under their state goods and services tax (SGST) laws for intra-state movement of goods. They cannot do it for inter-state movement of goods on their own without the permission of the GST Council. 

"Generation of e-way bill under the West Bengal GST Rules, 2017, for an intra-state movement of goods is exempted where such goods are being sent to a job-worker for job work," says the notification issued by the state government. 

Job work is defined under the GST laws as any treatment or processes undertaken by a person on goods belonging to another registered person or entity under the GST. These broadly include carrying out embroidery work or stitching work in the textile industry, processing of leather in shoe industry. Generally, job work is done by small businesses, particularly in West Bengal. 

However, the exemption is only for business-to-business transaction. It would not apply to final delivery of finished goods. 

Abhishek Jain, partner, EY, says these variations and different practices by states could entail efforts being required at the industry-end on maintaining a state-wise track of relaxation in e-way bill to avail such benefits. 

However, this is a beneficial provision and hence the industry might not complain. 

"Those who do not want this exemption, may continue to generate e-way bills for job workers in West Bengal," an expert said. 

M S Mani, partner, Deloitte India, said while the exemptions on every bills on job work movements in West Bengal is intended to simplify compliance for SMEs, state-specific changes on any aspect of GST would lead to a distortion of the one-on-one tax principle. 

The bills, generated on e-way bill portal, SMS, android app or through API, is compulsory for anyone whose goods worth over Rs 50,000 are transported for inter-state movement of goods from April one, 2018. This could also be generated by a transporter alternatively. 

The requirement to do so for intra-statement movement of goods was made compulsory by June 3, 2018 in a phase-wise manner. However, West Bengal and Maharashtra have now raised the threshold for generating intra-state e-way bill to Rs 1,00,000 from earlier Rs 50,000.