‘E-way bill to boost GST compliance’ 

‘E-way bill to boost GST compliance’ 

Context

E way bill system

News

The mandatory implementation of the e-way bill system from February 1 for all inter-State movement of non-exempted goods will help boost compliance under the Goods and Services Tax (GST) regime, according to Hasmukh Adhia, Finance Secretary

Backdrop

The July 1 implementation of GST has seen revenue collections from the new nationwide indirect tax falter in recent months and the Centre, already struggling with a wider than budgeted fiscal deficit, is keen to tighten tax compliance under the new regime. The decision to advance the roll-out of the nationwide e-way bill system to February 1 is line with this objective

No inspector raj

Mr. Adhia sought to allay fears that the implementation of the e-way bill system would result in a return of ‘inspector-raj’ and said only in the initial period would a few random vehicles be stopped en route to check if the goods being transported were accompanied by an e-way bill

• Vehicle to be stopped only once: Also, once a vehicle had been stopped and checked it would not face any further inspections along the rest of its route, even if it traversed multiple States 

Exemptions

The number of exemptions for complying with the requirement of an e-way bill was also extensive, including about 50% of the CPI (Consumer Price Index) basket of goods

Jump in the tax collections

Given the experience of States which had implemented similar e-way bills as part of the earlier VAT regime, there is clear evidence that tax collections jumped following implementation of the system

• These States saw a 15% to 20% increase in revenue the year after they implemented it