E-Way = Easy Way?

On a sleepy Saturday afternoon, while most of us were rubbing our eyes and wondering what to order for lunch, a bunch of ministers & members of the GST Council were furiously debating & discussing on videoconference in the 24^th GST Council Meet that was urgently called for one day in advance.

As the restaurant you ordered from dispatched your meal, the GST Council too disseminated an important piece of information that read on the news ticker as follows:

Outcome of GST Council Meet -

Council OKs Mandatory Compliance Of Bill For Inter State Mvmt From Feb 1

Council For Uniform e-Way Bill For Both Inter & Intra State From June 1

Facility For Bill To Be Available From January 15 For Trial Runs

Now, before you accuse me of spoiling your lunch plans, I must tell you, this ruling does take the taste away from a lot of people’s lunches. Here’s why -

“The E-Way bill is, essentially, an electronic document generated on the GST Network portal; required for movement of goods worth more than Rs 50,000. So, come June 1, transporters will have to procure e-way bill from the GST Network portal when hauling goods worth more than Rs 50,000, within or outside a state.  To generate an e-way bill, the supplier and transporter will have to enter details of the haul in the GSTN portal. This will create an unique e-way bill number which will be sent to the supplier, transporter and the receiver. The e-way bill thus generated will be valid for a period of 15 days, with one day of travelling for 100 km and 15 days for more than 1,000 km transit.” Phew…you just read that. Now imagine having to do this, every time you have to send goods across the country.

The Brokerage Edelweiss – has enlisted the Key Features of this E-Way Bill, They Are –

Under the proposed rules, movement of goods worth more than INR50,000 by a registered entity will require an “e-way” bill wherein entity will be required to upload prior information of the consignment on the GST portal online.

• In case the e-way bill is not generated by the registered entity and the goods are handed over to a transporter, the registered entity shall furnish the information relating to transporter and an e-way bill will be generated by the transporter.

• The registered entity will also be required to furnish information and generate the e-way bill for all inward supplies from an unregistered player.

• The entity carrying the goods will be required to carry the e-way bill along with the invoice/bill of supply/delivery challan. The facility of generation and cancellation of e-way bills may also be made available through SMS.

• Details of e-way bill shall be made available to the registered recipient on a common portal and will have to be approved or rejected by the registered recipient within 72 hours, else it would be deemed to be approved by the recipient.

• E-way bills will have a validity period of 1-15 days, depending on the distance to be travelled. The authorised tax officials can intercept conveyance during transit to verify e-way bills to check tax evasion.

The objective is to streamline movement of goods across and inside state borders and keep track of inter- and intra-state goods transport for taxation purposes. However, the cumbersome procedure requirement of yet another document empowers inspectors to stop vehicles at will and conduct checks.

The introduction of the e-way bill has been a contentious issue, with businesses protesting against the burden of additional paperwork and processes that would come along with it. So much so, that the law advisory panel set up to advice changes to the GST laws and rules itself, has recommended deferring the e-way bill till 2019. But, with the Government’s GST collection declining to Rs 83346 crore in October, from the Rs 90000 crore plus, in each of the first three months after the new tax regime was rolled out on July 1, something had to give.

Just a few questions that need to be answered -

1)     Will the e-way bill actually help in increasing GST revenue?

2)     Is the Rs. 50000 threshold too low? There’s been a request to increase it to 2,00,000

3)     E-way bills will have a validity period of 1-15 days, depending on the distance to be travelled. Hard-coding this may take have an adverse impact on exceptions (heavy machinery that may take more than the stipulated time for travel)

4)     Multi-Modal Logistics? What if something is sent via plane, truck and then mini-van? Would that require more bills?

5)     For Logistics Companies carrying goods from multiple clients – will they require separate bills along with an additional consolidated e-way bill? eComm Players will be very confused, no?

6)     Is the system ready for the massive influx of data w.r.t e-way bills? The GSTN portal itself has had issues; who’s to say this will be fool proof? Also, are 15 Days (Jan 15 to Feb 1) enough to test the e-way bill platform?

7)     What does the e-way bill have; that an invoice doesn’t? Why the need for yet another document?

I gather, these are the very issues which the Government, Tax Planners & Consultants are working overtime towards addressing. On the sidelines; I'm sure, there’s a totally different bunch of people who are addressing how to circumvent this regulation. Meanwhile, the businessmen are sweating and the organized logistics industry is licking their fingers on prospects of more business share from the unorganized sector. Only time will tell the answer to this key question – Is the E-Way Bill an Easy Way of Doing Business; or is it the Inspector Saying, It’s My Way on the Highway!