E-Way Bill Requirements for the Transport of Goods in Knocked Down (CKD or SKD) Condition

Explore what SKD and CKD goods are, when they are used, and the e-way bill requirements for transporting such goods in semi or completely knocked down conditions.
Business Loan
4 min
09 May 2025
Transporting goods in knocked down conditions—specifically, semi knocked down (SKD) and completely knocked down (CKD) forms—is a common practice in industries dealing with large or complex products. This approach allows for easier handling, reduced transportation costs, and simplified logistics. However, such shipments come with specific regulatory requirements under the Goods and Services Tax (GST) framework. One of the primary compliance mechanisms is the generation of an e-way bill. Understanding the nuances of e-way bill SKD goods, e-way bill CKD goods, and the associated transportation rules is crucial for businesses to avoid penalties and ensure smooth operations.

What are SKD or CKD goods?

Semi knocked down (SKD) and completely knocked down (CKD) goods refer to products that are disassembled into parts for easier transportation and assembly at the destination. This method is prevalent in industries such as automotive, machinery, and furniture manufacturing. For instance, a large machine may be dismantled into components and shipped in multiple consignments, which are then reassembled at the destination. This approach not only facilitates easier transport but also reduces costs associated with handling oversized or bulky items.

E-way bill requirement for SKD/CKD

Under GST, an e-way bill is mandatory for the movement of goods valued at over Rs. 50,000. When transporting SKD or CKD goods, the following steps must be adhered to:

  • Raise a single invoice for the entire consignment, even if it is being transported in parts.
  • Generate a delivery challan for each vehicle transporting a portion of the goods.
  • Create an e-way bill for each delivery challan, ensuring that the vehicle details and other relevant information are accurately provided.
  • Attach the original invoice with the last consignment.
This process ensures that each part of the consignment is tracked and complies with e-way bill transportation rules. For businesses seeking to streamline their operations, check your pre-approved business loan to help you invest in technology or resources that support compliance and efficiency.

Circumstances and industry under which the CKD/SKD transaction type is used

The CKD/SKD method is predominantly used in industries where products are large, complex, or require assembly at the destination. Common sectors include:

  • Automotive industry: Manufacturers ship vehicles in parts to be assembled at dealerships.
  • Machinery and equipment manufacturing: Large machines are disassembled for transport and reassembled at the installation site.
  • Furniture industry: Items are shipped in parts and assembled by the retailer or consumer.
This method, often referred to as screwdriver technology, allows companies to streamline logistics and reduce transportation costs. If you plan to expand your manufacturing or distribution processes, check your business loan eligibility to access potential financing solutions.

E-way bill for transportation of goods in SKD/CKD conditions

To generate an e-way bill for SKD/CKD goods, follow these steps:

  • Log in to the e-way bill portal.
  • Navigate to 'Generate New' under the 'E-Way Bill' section.
  • Select 'Outward' as the transaction type and 'SKD/CKD' as the subtype.
  • Enter the delivery challan details and complete parts A and B.
  • Generate the e-way bill for each delivery challan.
Ensure that each vehicle transporting a portion of the goods has its own e-way bill, and that the original invoice accompanies the final consignment.

Conclusion

Transporting goods in SKD or CKD conditions offers logistical advantages but requires meticulous adherence to GST regulations, particularly concerning e-way bill generation. By understanding and implementing the correct procedures, businesses can ensure compliance and avoid potential penalties. For companies looking to streamline their operations or expand their capabilities, securing a business loan can provide the necessary capital to invest in infrastructure, technology, and resources to support efficient and compliant logistics operations.

Frequently asked questions

What is the full form of SKD?
SKD stands for semi knocked down. It refers to goods that are partially disassembled for transportation and require assembly at the destination.

Why is SKD used in industries?
SKD is used to facilitate the transportation of large or complex products, reduce shipping costs, and simplify logistics by allowing for assembly at the destination. For businesses looking to scale their operations and improve efficiency, check your pre-approved business loan offer to find the financial support needed for streamlining logistics and expanding capabilities.

Is SKD used in the automotive industry?
Yes, the automotive industry frequently uses SKD for shipping vehicle parts to be assembled at dealerships or manufacturing plants. If you're part of such an industry that relies on SKD for transportation, check your business loan eligibility to see how you can secure the necessary funding to support this logistics strategy.

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