Recently, Goods & Service Tax (GST) Collection figures are out and collections are below average. In first nine months after the rollout of GST, it has added up Rs. 7.19 lakh crore in the year ended March 2018, since not everyone registered for GST has been filing returns. The average monthly collection under GST for FY 2017-18 was around Rs. 90,000 crore, implying a deficit, which is expected to be reduced with the help of e-Way bills in place and possible introduction of other anti-evasion measures such as TDS/TCS, credit matching (i.e. GSTR-2) etc.
As the e-Way for inter-state movement has now been successful rollout wef April 01, 2018 and no major technical glitch observed so far, now the question arises how e-Way bill can help increase collections and also that, is it only increasing compliances to the tax payers or is it really beneficial for them. For that, we have to understand the e-Way bill and its mechanism.
What is e-Way Bill?
Electronic way bill, in short e-Way bill, is an anti-evasion measure taken by the Government to keep their eyes on the movement of Goods among/within state(s) by the Registered as well as Un-registered Person.
e-Way bill is a document, required for inter-state movement of Goods having value exceeding fifty thousand rupees as mandated by the Government in terms of Section 68 of the CGST Act read with Rule 138 of the rules framed there under.
From where do we get an e-Way bill?
It is generated from the GST Common Portal for e-Way bill i.e. https://ewaybillgst.gov.in
Who all can generate the e-Way bill?
Its GST law flexibility which allows any of the parties to a transaction — the sender or the receiver — to generate the e-Way bill, provided they are registered. Further, transporter can also generate e-Way bill on behalf of sender / receiver, provided authorization from sender / receiver for doing the same is mandatory.
When to generate an e-Way bill?
e-Way bill is required to be generated by the registered persons or transporters who cause movement of goods or consignment from one place to another, before commencement of such movement.
Further, it is only required where goods are being transported through motorized conveyance. In other words, e-Way bill is not required to be generated in case of Goods being transported by non- motorized conveyance (Ex. Horse carts or manual carts)
What are the documents that need to be carried along with the goods being transported?
An invoice or bill of supply or delivery challan or bill of entry as the case may be along with a copy of the e-way bill generated from the common portal.
However, recently CBIC has clarified that e-Way bill number on Invoice is sufficient and no copy of e-Way bill is required along with the goods being transported.
What is the rollout Schedule or status for e-Way Bill implementation across India?
For Inter-State movement of goods throughout India, e-Way bills are required to be generated from April 1, 2018.
However, the requirement for generation of e-Way bills in case of intra-state movement of goods will start from April 15, 2018 in a phased manner by grouping the States/UT into four lots except Karnataka who has already notified the e-way bill requirement for movement of goods within the State.
GSTN, in its last meeting, notified its first lot of five states (i.e. Andhra Pradesh, Gujarat, Kerala, Telangana and Uttar Pradesh) out of four, who have adopted e-Way bill system for intra-state movement from April 15. Further, the government had also said that all the states would have the system in place by June 1.
What are the modes of e-way bill generation, the taxpayer can use?
The e-way bill can be generated by the registered person in any of the following methods;-
- Using Web based system
- Using SMS based facility
- Using Android App
- Bulk generation facility
- Using Site-to-Site integration
- Using GSP ( Goods and Services Tax Suvidha Provider)
Now, let’s discuss on our question that How e-Way bill can help increase collections? e-Way is beneficial or not? Whether it is just increasing compliances to the tax payers?
One of the key arguments in favour of GST was its ability to unify India as one market (i.e. One Nation One Tax) and do away with bothersome inter-State check-posts.
Data from the Ministry of Road Transport and Highways, tells us that a typical truck in India spends 20 per cent of its time in inter-state check points and it varies from State to State from 20 minutes to upto 2 hours. These logistical speed-breakers cost the Indian economy approx 4.3 per cent of GDP every year or an extra Rs. 2.5 lakh crore. It is expected that the GST and e-Way bill combination was expected to trim logistics costs by 20 per cent.
Both the GST levy and the e-Way bill were expected to root out such transit delays, while at the same time plugging tax evasion. Every e-Way bill generated by a sender or buyer of goods is to be automatically updated in the outward sales return (GSTR1) of the supplier, leaving little scope for tax evasions on shipments. In the previous tax regime, tax officials had to manually cross-check the way bill with the tax returns filed, to verify if all the consignments came within the tax net.
Also, a single electronic way bill for the movement of goods throughout the country was expected to save tons of paperwork and sidestep various inter-state clearances for buyers, sellers and transporters. In the previous tax regime, each State framed its own rules for the movement of goods from and to it.
After understanding the above, we can say that generation of e-Way bill is not a cumbersome process one can generate it from various modes and any change in the system that brings about even small benefits is to be welcomed.
While all this looks pretty good on paper, it depends on how strong GST backbone is.
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