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Imagination and expectation does not always come true. When this expectation stands baseless it creates panic and confusion in the reality.

The expectation like hassle-free business will not work out under GST as promised. As the revised GST law will have the need to show the e-permit at interstate borders as the old practice being followed. There is a very slight changes in the old practice and proposed procedure; checking of document at the check post at the interstate borders. While in the existing system the document was manual, under the GST it will be e-permit. Though the paper permit will change to e-permit, the difficulties faced by the transporter, business man will not come to an end as they need to stand on the queue at the interstate borders check post with their e-permits to be checked.

The logic behind this implementation of checking of e-permits at interstate border will help to track the quantum of supply of goods between the interstates for any movement of goods.

Currently, at each check posts of interstate border, there are long queue by the vehicles for this document verification purpose for interstate sales and movement of goods. The expectation was the business persons will get benefit under GST from this difficulty to stand in queue for document verification purpose. However, the reality is going to be little different from the expectation. There will be need to verify the e-permit at the interstate border check posts.

In order to build consensus and to pass the GST Bill the center must have agreed to this point. As earlier this point was not included in the drafted GST law for doing smooth running of the business. Checking of document like e- permits may lead to difficultiesin various ways , which is not a good sign, unless the total checking system is transparent.

As per the draft model of GST law -

"The central or a state government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding. Rs. 50,000 to carry with him such documents as may be prescribed on this behalf". 

"Where any vehicle referred to in sub-section (1) is intercepted by the proper officer at any place, he may require the person in charge of the said vehicle to produce such documents for verification and the said person shall be liable to produce the documents." 

The most important and stated promise of GST was to reduce the documentation and related hassles to the business persons for their business transactions. By introducing the e- permits for interstate sale or for interstate movement of goods is not a user friendly steps as compared to the promises given. It’s like a retrograde step in the GST process.

The e-permit system would significantly dilute the fundamental principles of GST which had promised for the seamless movement of goods across states as one India One tax movement in the field of Indirect Taxes. This will negatively affect the business persons who have the mind set to do the business seamlessly across India under GST and not like with the existing barriers as per the existing VAT and Sales Tax laws. All the business persons have the mindset that this barrier would be demolished under GST laws, which will be at ease to do the business without any hassles.

By implementing the GST, the expectation was to do the business smoothly without any hassles like in the free market as proposed under GST. All the transactions will be monitored through credit matching as part of the procedure and compliance requirement under GST.  By implementing the checking of e-permits for interstate movement of Goods or for interstate sales, this will lead as a setback for GST.

The spirit of GST will lose by introducing the checking of e-permits at the state borders

However, we expect the Government will take all the precautionary measures in the final GST law for the smooth running of the businesses, without any difficulties as proposed under GST.


Published by

(Chartered Accountant)
Category GST   Report

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