Context: E-Way Bill System under GST regime has achieved a new milestone of generation of 7.12 Crores E-way Bills in the month of March 2021. This is the highest number of e-way bills generated in any month during last three years’ journey of E-Way Bill system.
Analysis
- E-Way Bill system, short form for electronic way bill, was launched by National Informatics Centre (NIC) as per the directions of the GST Council on 1st April 2018.
- The bill is a document to be generated online under the GST system, when goods of the value of more than ₹50,000 are shipped inter-State or intra-State.
- The E-way bill must be raised before the goods are shipped and should include details of the goods, their consignor, recipient and transporter.
- The transporter has to carry the invoice and the copy of E-way bill as support documents for the movement of goods.
- He can also carry the E-way bill number, mapped to an RFID (radio frequency identification device).
- Though check-posts have been abolished under GST, a consignment can be intercepted at any point for the verification of its E-way bill, for all inter-State and intra-State movement of goods.
- If a consignment is found without an E-way bill, a penalty of ₹10,000 or tax sought to be evaded, whichever is greater, can be levied.
- GST laws flexibly allow any of the parties to a transaction — the consignor or the recipient — to generate the E-way bill, provided they are registered.
- Whether goods are transported on one’s own or hired conveyance, by air, rail or road, the electronic way bill has to be generated.
- Where 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.
- When the consignor or transporter generates the electronic way bill, the recipient for the consignment has to either accept or reject it on the portal. If no action is taken by the recipient in 72 hours, it shall be taken as accepted.
- The bill’s validity varies depending on the distance that the goods have to travel.
- Typically, the bill’s validity is one day for every 200km of movement of goods.
- Movement of handicraft goods or goods for job-work purposes under specified circumstances requires an e-way bill even if the value of consignment is less than fifty thousand rupees.
- Some goods that are out of the e-way bill’s ambit include perishable items such as meat, milk and milk products and fruits and vegetables.
- Other items that don’t need an e-way bill are gold and silver jewellery, cooking gas cylinders, raw silk, wool and handlooms.
Why is it important?
- 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.
- The Logistics Performance Index (LPI) Survey by World Bank in 2014 put logistics costs at 14 per cent of the total value of goods in India, while it is only 6-8 per cent in other major countries. The GST E-way bill combination was expected to trim logistics costs by 20 per cent.
- The electronic way Bill has replaced the need of e-way bill of multiple states with one e-way bill.
- The Bill has helped in reducing the transport time in movement of the goods.
- It has facilitated removal of the static check posts at the state borders and improved the tax compliance and collection of tax.
- The electronic way bill system provided number of reports to the government departments to facilitate monitoring of the movement of essential commodities and medical supplies in different parts of the country, during lockdown necessitated by COVID-19 pandemic.
- A number of analytical reports like trend analysis, supply chain, risk analysis, data analysis etc. based on electronic way bill system are developed for the GST officers and facilitated detection of a number of tax evasions.
- Recently, the Fastag data has been integrated with the electronic way bill system.
- Validations of the vehicle number with VAHAN system has also been introduced.
What safeguards have been put in place?
- To prevent harassment of taxpayers, e-way bill rules specify that goods will be inspected only once during the journey except in cases where specific information on tax evasion is received.
- Further, in case a vehicle is detained for more than 30 minutes, the transporter can report it on the portal.