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E-way bills redux: next step for GST Council
Context:
The group of ministers assessing technology issues related to the Goods and Services Tax regime has proposed rolling out on April 1 the e-way bill system.
What is the purpose of the e-way bill system?
To track inter-State movement of goods above the value of ₹50,000
Details:
- A final decision on the launch of the system will now be taken by the GST Council at its next meeting.
- A plan to start it on February 1 had to be abandoned after the IT network to create the bills crashed in its first few hours after generating about five lakh bills.
- The government decided to defer its roll-out till the technical glitches, like those businesses faced while filing online returns on the GST Network initially after its July 1 roll-out last year, were removed.
- For intra-State goods movement, the government had said all States must launch their own e-way bill systems by June 1.
- The ministerial group headed by Bihar Finance Minister Sushil Modi has proposed that instead of bringing all States and Union Territories on board together, introducing intra-State e-way Bills in four or five at a time is better.
What will be the impact?
For businesses with operations across the country, this proposal will pose a fresh compliance headache as some States may require e-way Bills for internal movement of goods while others will not.
Fiscal compulsions of the government:
- After a monthly inflow of over ₹90,000 crore in the first three months of the tax regime, revenue collections dipped.
- This may be partly because of the large-scale rationalisation of tax rates carried out recently, but registered taxpayers are also finding ways to avoid tax dues.
- Data for January shows about 69% of the over one crore registered businesses filed returns, with wide variations across territories
- The disparity must be factored in by the GST Council when it considers proposals for a staggered launch of the intra-State e-way bill system.
Way ahead:
- Boosting compliance is critical for further rationalisation of multiple GST rates
- To achieve that goal, it must be ensured that States and industry are comfortable with the e-way bill regime
- Strong It infrastructure is needed
