E-way bill system: all you need to know

Context:

• The GST e-way bill system has been recently rolled out all over India as part of anti-tax evasion measures under the new tax regime.

Background:

1^st April, 2018:

• The group of minister (GoM) formed to oversee the implementation of the Good and Services Tax (GST) implemented the e-way bill for inter-state movement of goods all over India.

 E-way bill:

• An electronic documentation.
• Document contains details about movement of goods.
• Can be generated from the Good and Services Tax Network (GSTN).
• 25-50 lakh e-way bills to be generated every day, and that may even go up to 75 lakh per day.

Key notes about E-way bill:

• Mandatory from 1^st April, 2018 for all inter-state transport of good.
• Consignment should exceed Rs50, 000 in value.
• Compulsory for the moving goods within a state in a phased manner from 15^th April, 2018.
• Its validity varies depending on the distance that the goods have to travel.
• 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.
• Goods will be inspected only once during the journey except in cases where specific information on tax evasion is received.

Significance of e-way bill:

• Key anti-tax evasion measure,
• Crucial part of the GST architecture,
• Provide a boost to GST revenues,
• Dissuade tax evaders from underreporting transactions, and
• Check instances where the entire transaction is not recorded due to connivance between the seller and buyer.

Concerns rose over e-way bill:

• May cause a disruption to trade,
• Technology system may not be prepared to handle the huge e-way bill volume,
• Long delays in generation of GST e-way bills,
• Trade may come to a standstill,
• Potential scope for harassment by tax authorities,
• Inadequate knowledge about the process of e-way bill among vehicle drivers, and
• Taxmen have powers to stop trucks and check e-way bills which may lead to rent-seeking.

Way ahead:

• Anti-evasion officers need to be deployed,
• Limit the frequency of inspections for goods moving across States, and
• Educate the general mass with e-way bill and its underpinnings.