Many taxpayers believe that exempted GST sales never require an e-way bill. However, recent clarifications and enforcement practices in January 2026 have made it clear that this assumption can lead to penalties.
This blog explains when an e-way bill is required for exempted goods, what has changed, and how businesses should stay compliant.
What Are Exempted Sales?
Exempted sales include:
- Goods or services fully exempt under GST notifications
- Nil-rated supplies
- Non-GST goods
While GST tax is not applicable, movement of goods is still subject to documentation and tracking rules.
What’s New in January 2026?
E-Way Bill Requirement Depends on Goods Movement, Not Taxability
- Even if goods are GST exempt, an e-way bill may be required based on value and movement conditions.
- GST exemption does not automatically exempt e-way bill generation.
Value Threshold Still Applies
- If the consignment value exceeds ₹50,000, an e-way bill may be required, even for exempt goods.
- Value includes goods value, not GST (since GST is exempt).
Transport by Road, Rail, Air, or Vessel
- Movement of exempt goods through any transport mode is under scrutiny.
- Officers are checking e-way bills during transit, regardless of tax rate.
When E-Way Bill Is NOT Required
An e-way bill is generally not required when:
- Goods are fully exempt and specifically notified as e-way bill exempt
- Movement is for non-commercial or personal use
- Goods are transported within short distance limits, as applicable
- Movement is within the same premises or factory area
Businesses must verify whether their exempt goods fall under absolute exemption categories.
Documents Required During Movement
Even if e-way bill is not required, the following must be carried:
- Tax invoice / Bill of supply
- Delivery challan (where applicable)
- Transport document (LR / consignment note)
Lack of documents may result in detention, even for exempt supplies.
Common Mistakes Seen in 2026
- Assuming “exempted” means “no e-way bill”
- Not calculating consignment value correctly
- Transporting multiple invoices without consolidated e-way bill
- Wrong HSN classification leading to disputes
- Missing bill of supply during transit
Best Practices for Businesses
- Review exemption notifications carefully
- Generate e-way bill when value crosses threshold, even for exempt goods
- Maintain proper documentation during transit
- Educate transporters about exempt goods compliance
- Regularly review GST and e-way bill updates
Conclusion
January 2026 compliance checks clearly indicate that exempted sales are not outside the e-way bill framework. GST exemption reduces tax liability, but movement compliance remains critical. Businesses should adopt a cautious approach and generate e-way bills wherever there is doubt to avoid penalties and delays.