BMPA’s intervention on eWay bill gets the result

Rationalization in process

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eWay bill generation with HSN Code, Photo credit: Unsplash
eWay bill generation with HSN Code, Photo credit: Unsplash

Since 17 March 2021, there had been a change in the system for generating of eWay bill wherein no eWay bill could be generated only for Service Accounting Code (SAC Code), and one had to mention at least one Harmonized System of Nomenclature (HSN Code) for validating and generating the eWay bill. 

Businesses in the printing industry who undertake orders to supply their goods under the SAC code were severely affected. They wondered about the process to be adopted for generating the eWay bill as they could not mention the HSN Code in the eWay bill (as the products are to be supplied under the SAC as per the board’s clarifications). Nor could they risk supplying what essentially is the ‘goods’ without generating the eWay bill. The same caused a lot of confusion in the industry, and there was no clarity on the process to be adopted to tide over this problem.

A solution for this problem could only come via suitable amendments in a procedure that the Central Board could issue for Indirect Taxes and Customs (CBITC) and the GSTN. Members of the BMPS managing committee were entirely seized of this matter. Print buyers were also invested in this issue. 

Iqbal Kherodawala, president, BMPA, put together a sub-committee including Faheem Agboatwala, Mehul Desai, and Saubhagyanidhi Seksaria to highlight concerns and challenges faced by the industry to the CBITC. BMPA also sought expert advice and support from senior advocate Shailesh Sheth of SPS Legal to represent the matter with CBITC. 

With further coordination and communication and within an interlude of fewer than six months, the outcome is relieving with a suitable directive now at hand, according to BMPA.

Issues on generating eWay bills 

On 16 September, the GST Council formally issued an advisory for taxpayers regarding generating eWay bills where the principal supply is the supply of services.  

  1. Representations have been received from various trade bodies stating that they are not able to generate eWay bill for movement of those goods where their principal supply is classifiable as a service since there is no provision for generating e-way bill by entering SAC (Service Accounting Code-Chapter 99) alone on the e- way bill portal.
  2. To overcome this issue, the taxpayers are advised as below:
  1. Rule 138 of CGST Rules, 2017, inter alia, states, “Information to be furnished prior to commencement of movement of goods and generation of eWay bill. (1) Every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees….” Thus, e-way bills are required to be generated for the movement of goods.
  2. Therefore, if the principal supply is purely a supply of service and involves no movement of goods, the eWay bill is not required to be generated.
  3. However, in cases where, along with the principal supply of service, movement of some goods is also involved, an eWay bill may be generated. Such situations may arise in cases of supply of services like printing services, works contract services, catering services, pandal or shamiana services, etc. In such cases, eWay bills may be generated by entering the details of the HSN code of the goods, along with the SAC (Service Accounting Code) of the services involved.

In the coming days, BMPA will arrange to issue a circular to its members in collaboration with SPS Legal that would make for a more precise method of generating EWB guided by the latest advisory of 16 September from GSTN.

Background on SAC code for a supply of printed goods

As per Circular No. 11/11/2017-GST dated 20 October 20, it was seen that in the case of printing of books, pamphlets, brochures, annual reports, and the like, where only content is supplied by the publisher or the person who owns the usage rights to the intangible inputs while the physical inputs including paper used for printing belong to the printer, supply of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such supplies would constitute a supply of service falling under heading 9989 of the scheme of classification of services due to the above most of the goods produced by commercial printer were classified as the supply of services and had to be cleared under the SAC code.

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

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– Naresh Khanna

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