Where intent overrides impact

Where intent overrides impact

Context

The e-way bill, set to be introduced across India from February 1 as part of the Goods and Services Tax (GST) regime, could lead to ‘large scale’ disruption in the transportation of goods, transporters caution

Intended purpose of the bill

While the bill is intended as a mechanism to prevent leakage of GST by tracking the movement of goods from one party (and place) to another

View of transport industry officials

Transport industry officials said it would have been better to have addressed ‘several key issues’ before migrating to the new system

What is e-way bill?

The Central Goods and Services Tax (Sixth Amendment) Rules, 2017, requires every person causing the movement of goods worth more than Rs 50,000 from one State to the other to generate an e-Way or electronic Way bill for each such movement

• The transporters can manage sub-users and allocate roles to them. Large transporters can declare their various offices as sub-users
• There is provision for cancellation of an e-way bill within 24 hours by the person who generated the e-Way Bill. The recipient can also reject the e-way bill within 72 hours of generation
• The validity of an e-way bill is fixed as one day for every 100 km or part thereof

Issues

• Lack of preparedness
• Possible harassment by tax officials citing compliance issues: Transporters fear that unintended lapses on their part could lead to the imposition of heavy penalties. Also, consignments could end up getting stranded mid way due to drivers’ inability to pay the fine at remote locations.
• The transportation industry is predominantly an offline industry. Expecting them to go online suddenly is difficult to cope with. The general feeling in the industry is that it will be impractical to roll out the e-way bill from February 1
• Movement of project cargo or heavy cargo, which takes months to reach the destination, could suffer as a result of the e-way bill rule that mandates 100 km per day movement. Such cargo generally does not travel more than 20 km a day
• While the e-way bill existed in some States even earlier, the countrywide introduction across all sectors is likely to pose documentation and system challenges initially to smaller businesses
• Low literacy levels and poor technology awareness among a majority of truck owners could also create a stumbling block
• Increased financial burden due to filing of e-way bills: A majority of the small transporters who are driver-owners will find it difficult to generate e-way bills as the process requires comfort with using electronic medium such as apps
• In case of a breakdown in hilly areas or remote villages with no mobile connectivity, the e-way bill will not be easily updated. There is no clarity on the resolution of such issues in the rules
• Lack of clarity on rules: There is lack of clarity on the issue of vehicle detention in the case of mis-presentation of details such as price of goods. The responsibility should lie with either the consignee or the consignor without detaining the vehicle
• Random checks: Rules also give the right to inspect the vehicles at random(138 B) which increases the chances of harassment by inspectors, transporters fear. Inspectors have the right to unload the entire consignment to check compliance. There is no guidance provided for genuine randomness as against “targeted” check

Solution

The government must issue a blanket order to officials not to harass truck drivers in transit. If the driver has an e-way bill then [it is clear] there is no intention to cheat

Transporters have urged the government to ensure officials differentiate between errors in the e-way bill and intentional tax evasion

Counterview

• With just the e-way bill number, all transactions can now be tracked and average waiting time for vehicles will now reduce, as verification processes will be online
• The compulsory introduction of e-way bill may face initial glitches, but in the long-term, it will benefit not only the logistics industry, but the country as a whole