E-way bill or electronic way bill was implemented on 1st April, 2018 by Finance Minister Arun Jaitley to stymie tax evasion or non-filing of returns. 1st June was approved as the deadline for creating E-Way bills for both inter-state and intra-state movement of goods. It was introduced for providing government an opportunity to fix the fissures in the GST system.
What is an E-Way bill?
E-way bill or electronic way bill is an indenture implemented under GST regime that needs to be generated online when goods worth Rs.50000 or more are transported beyond 10 km inter-state or intra-state. It should be raised before the goods are transported and must include details of the goods, their consignor, recipient and transporter. Under this system, an e-way bill generated in any state shall be the transit pass throughout the country for movement of goods. The transporter may either carry the copy of E-way bill or the E-way bill number mapped to a Radio Frequency Identification Device (RFID) as support document for movement of goods. This bill remains valid for one day for distance travelled less than 100 km and one additional day is added for every 100 km or part thereof.
By whom an E-way bill will be generated?
The consignor or the consignee can generate the E-Way bill provided they are they are registered. Whether goods are transported on one’s own or hired conveyance by air, rail or road, the E-way bill has to be generated. In case the goods are handed over to a transporter for conveyance by road and neither the consignor nor the consignee has generated the E-way bill, the transporter becomes liable to generate it.
A transporter ID will be issued to unregistered transporters on enrolling on the E-way bill portal after which E-way Bills can be generated.
When the bill gets generated by the consignor or transporter, the recipient of the consignment has an option either to accept it or reject it in the portal. If no action is taken by the recipient within 72 hours, it shall be taken as accepted.
Reports from Ministry of Road Transport and Highways state that shipments waste 20% of its time in inter-state check posts. The E-way bill curtails such transit delays and trims logistic cost by 20%. Once the bill is generated, it eliminates the need of filing requisite information in the GST returns as it automatically gets updated in the outward sales return [GSTR-1- which records the sales made by a seller to buyer] of the supplier.
Additionally, the transporters have the power to report detention of vehicles beyond 30 minutes on the portal. Further, the system facilitates online reporting of inspection and verification of documents.
Moreover, the e-way bill is eco-friendly as it saves tons of paper work and sidesteps various inter-state clearances for buyers, sellers and transporters. Unlike previous tax regime, now there is only one rule for movement of goods throughout the country.
Around 154 items of common use such as meat, fish, curd, vegetables, some cereals, human blood, LPG for households and kerosene for public distribution system (PDS) have been exempted by the GST Council. Additionally, there will be no need for e-way bill for goods being transported from port, airport, cargo complex and land customs stations to an inland container depot or a container freight station for custom clearance.
For facilitating faster movement of goods and check GST evasion, the revenue department is thing to integrate E-Way bill with NHAI’s FASTag mechanism and DMICDC’s Logistic Data Bank [LDB] services. This will help in improving operational efficiencies across the country’s logistic landscape in several ways as follows:-
1. It will boost tax collections by fixing the fissures on trade that currently happens on cash basis.
2. Vehicles will not need to stop at toll plazas.
3. Authorities will be able to track the movement of vehicles and ensure that they are moving towards the destination as specified by the transporter or trader while generating the E-Way bill.
4. Supplier and transporter will be able to track the vehicles through SMS alerts that would be generated at each toll plaza.
5. SMS alerts from toll plaza would enable supplier & transporter.
The new bill is expected to face a few challenges. Analysts have raised their concerns about the system being a possible route for the emergence of supply chain bottlenecks and discretionary power to tax officials. Moreover, since the system is fully dependent on technology, any technical glitches will result in supply chain bottlenecks. Needless to say that it remains to be seen how the IT department tackles the obstacles, yet weightage must be given as the bill intends to plug the leaks under the GST framework.