E-way bills redux: next step for GST Council

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