MM TAX CLUB

Clarification on E-Way Bill Requirement for Goods under Chapter 71

The movement of goods classified under Chapter 71 of the Harmonized System of Nomenclature (HSN) has been a topic of concern for various stakeholders in the industry. To provide clarity, this advisory outlines the regulatory requirements regarding E-Way Bill (EWB) generation for such goods.

Regulatory Framework

Rule 138(14) of the Central Goods and Services Tax (CGST) Rules, 2017, along with its Annexure S.Nos. 4 and 5, specifies that goods falling under Chapter 71, which include:

• Natural or cultured pearls

• Precious or semi-precious stones

• Precious metals and metals clad with precious metal

• Jewellery, goldsmiths’ and silversmiths’ articles

are exempt from the mandatory requirement of generating an E-Way Bill, except for goods classified under HSN 7117 (Imitation Jewellery).

EWB Facility on NIC Portal

Despite the exemption, an option to generate an EWB for goods under Chapter 71 (excluding HSN 7117) was made available on the National Informatics Centre (NIC) EWB portal under the category "EWB for Gold." This was introduced in response to Kerala’s state-specific mandate for intra-state movement of such goods.

Recent Developments

It has been observed that many industry participants voluntarily generated EWBs for goods under Chapter 71 due to the availability of this option. However, it is now clarified that:

• The facility for generating EWBs for goods under Chapter 71 (except HSN 7117) has been withdrawn.

• Taxpayers and transporters should note that EWB generation is not required for the movement of goods under this category.

• An exception applies to the intra-state movement of such goods within Kerala, where EWB generation is mandated as per Notification No. 10/24-State Tax dated 27/12/2024.

Compliance Advisory

Industry stakeholders are advised to ensure compliance with the applicable provisions and refrain from generating EWBs for goods under Chapter 71 (except HSN 7117), except in cases where it is mandated by state-specific regulations, such as in Kerala.

For further clarifications, stakeholders may:

• Contact the GST Helpdesk.

• Approach their respective jurisdictional tax authorities.

Ensuring adherence to these guidelines will facilitate smooth business operations and compliance with GST regulations.