The execution of the Goods and Services Tax (GST) in India has brought a magnificent change in the taxation regime with regard to the movement of goods across the country. One such mechanism introduced under GST is the Electronic Way Bill (e-way bill) system, designed to keep track of the current movement of goods and ensure tax compliance. The formation of e-way bill is a digital mode system that has been in place for various goods and services; its applicability to gold and precious stones has undergone recent changes as the development of technology emerges. This article will discuss the nuances of e-way bill requirements for gold and precious stones in India, examining both inter-state and intra-state movements, highlighting state-specific mandates and putting light on various uncovered elements.
Understanding the E-Way Bill System
The e-way bill is an electronic document which is generated on the GST portal, evidencing the tracking of the movement of goods worth more than a specified amount. It contains details about the consignor, consignee, the goods being transported, the transporter and various other elements which are necessary for the transaction of goods. The primary objectives of the e-way bill system are to:
- Ensure seamless movement of goods across states.
- Curb tax evasion by tracking goods in transit.
- Simplify the documentation process for transporters and businesses.
Applicability of E-Way Bill to Gold and Precious Stones
National Framework
Under Rule 138(14) of the Central Goods and Services Tax (CGST) Rules, 2017, goods classified under Chapter 71 of the Harmonized System of Nomenclature (HSN), which includes natural or cultured pearls, precious or semi-precious stones, precious metals, and articles thereof, were initially exempt from the mandatory requirement of generating an e-way bill. This exemption of this rule was not applicable to imitation jewellery classified under HSN 7117.
However, recognizing the need for better tracking and to curb potential tax evasion in the trade of high-priced items like gold and precious stones, the GST Council revisited this exemption. In its 50th meeting which was held on July 11, 2023, the Council recommended the implementation of e-way bill requirements for the intra-state movement of gold and precious stones, subject to a consignment value threshold of ₹2 lakh or as notified by the respective states or Union Territories. This recommendation was brought into effect through the notification of CGST Rule 138F on August 4, 2023.
Inter-State Movement
For inter-state transportation of gold and precious stones, the e-way bill requirement is now mandatory, irrespective of the consignment value. The step of Inter-state movement aims to monitoring, supervise and regulate the movement of high-value goods across state borders, which ensures the elements of transparency, accountability and compliance with various tax regulations.
Intra-State Movement
The applicability of e-way bills for intra-state movement of gold and precious stones is subject to state-specific notifications. The GST Council has set a cap threshold of ₹2 lakh, for which individual states have the discretion to implement this requirement based on their administrative system and considerations as required. Consequently, the requirement for an e-way bill for intra-state movement varies across states.
State-Specific Mandates
- Kerala: Kerala has been proactive in implementing the e-way bill requirement for gold and precious stones. Effective January 20, 2025, the National Informatics Centre (NIC) enabled the “EWB for Gold” feature in the e-way bill system specifically for Kerala. This makes it mandatory that any taxpayer or transporter moving gold, precious stones, or similar items within the jurisdiction of Kerala’s borders need to generate an e-way bill if the consignment value exceeds ₹2 lakh as per the tax regulations. This initiative aims to enhance transparency and accountability and supervise and monitor the movement of high-value commodities within the state.
- Karnataka: Karnataka has also adopted the e-way bill requirement for intra-state movement of gold and precious stones. As per Notification No. 4-C/2023 issued on September 30, 2023, the state mandates the generation of e-way bills for intra-state supply or delivery of these goods when the consignment value is ₹2 lakh or more. This applies to both Business-to-Business (B2B) and Business-to-Consumer (B2C) transactions, provided the movement of goods is caused by a registered supplier.
- Other States: While states like Kerala and Karnataka have issued specific notifications, other states may have different requirements. It’s vitally important for businesses and transporters to keep themselves updated with the respective state’s GST portal or official communications and other tax ordinances to ensure compliance with local regulations and various other tax regulations.
Procedural Aspects of E-Way Bill Generation for Gold and Precious Stones
Generating an e-way bill for gold and precious stones involves several steps:
- GST Registration: Both the supplier and recipient needs to be registered under GST. Their GST Identification Numbers (GSTIN) are essential for e-way bill generation.
- Accessing the GST Portal: Users need to log in to the GST portal using their credentials to access the e-way bill system.
- Filling Part-A of Form GST EWB-01:
- Invoice Details: Include invoice number, date, and total value.
- Consignment Value: Total value of goods being transported.
- HSN Code: For gold and precious stones, this falls under Chapter 71.
- Dispatch and Delivery Addresses: Complete addresses with PIN codes.
- Part-B Details: Typically, Part-B includes transporter information and vehicle details. However, for security reasons, the system may restrict the updating of Part-B details for consignments involving gold and precious stones.
Special Considerations
- Transporter Details: Once an e-way bill is generated for gold and precious stones, the system does not permit changes to the transporter’s information to prevent tampering.
- Consolidated E-Way Bills: Unlike other goods, the consolidated e-way bills are not permissible for gold and precious stones, because it’s not required by the regulations. Each consignment requires a separate e-way bill.
- Validity Extension: Extensions to the validity of an e-way bill can be made without altering Part-B details, accommodating unforeseen transit delays.
- Cancellation/Rejection: The rule and procedures for the purpose of cancellation or rejection of an e-way bill will remain constant with those for other goods.
Compliance and Penalties
Non-compliance with e-way bill requirements can lead to:
- Monetary Penalties: Businesses may face fines for failing to generate or carry a valid e-way bill.
- Confiscation of Goods: Authorities have the power to detain or seize goods transported without a valid e-way bill or which is under the suspicion of like nature.
- Legal Proceedings: Persistent non-compliance can result in legal action under the GST Act.
Conclusion
The introduction and implementation of e-way bill requirements for gold and precious stones implies that the government is committed to enhancing transparency and accountability and to curbing criminal activity like tax evasion in the trade of high-value commodities. While the national framework provides a basic structure, state-specific mandates play a crucial role in the operation of intra-state movement of these goods as per the requirement of tax regulations. Businesses and transporters need to keep themselves informed and updated about both central and state-specific regulations to ensure hassle-free and smooth execution of processes and ensure compliance to avoid unnecessary complications. Regular consultation of official GST portals and notifications is vital to navigate the evolving regulatory landscape effectively.
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