Check post raj: GST Council must end the e-way bill nightmare – The Financial Express–14.11.2017

Abhishek A Rastogi

Before the implementation of GST, check-post compliance was a peeve for businesses and logistic service providers. Vehicle detention plagued transport of goods, causing frequent disruptions in the free flow of goods across the country. Vehicles were stopped at various check-posts and even by flying squads of the anti-evasion wing for physical verification of documents and compliance with the many formalities under different legal provisions regulating movement of goods. Vehicles were detained under flimsy pretexts, thereby causing loss of time and idling of vehicles. This led to under-utilisation of transport capacity, affected trade adversely and gave rise to numerous tax-disputes. The detentions, for the goods supplier, often resulted in travel across large distances, just to explain minor procedural defects to local officers to get the goods released.

With the advent of GST, the industry had anticipated an end to this check-post raj, but the news is not very encouraging. The government, under recommendations of the GST Council, imposed a cobbled version of the old check-post regulation in the garb of an Electronic Way Bill (e-way bill)—a compliance requirement wherein the person causing the movement of goods uploads the relevant information prior to the commencement of such movement and generates an e-way bill on the GST portal.

The point of this article is to introspect on the necessity of an e-way bill under the GST regime. If it is to be used as a tool to track movement of goods and check tax evasion, one can argue that the GST Network and the relevant GST provisions already have well-structured mechanisms (such as invoice matching and returns) in place to do the job. If the place of supply can be determined and tax evasion of services can be effectively tracked with the same infrastructure and legal framework in place, one needs to ask whether there is a need for an additional e-way bill burden.

Huge responsibility has been imposed on businesses and transporters for generating/updating an e-way bill. Besides, selected transporters are required to tag vehicles with Radio Frequency Identification Devices (RFID) and map them to their e-way bill. The government would set up a facility to generate and cancel e-way bills through SMS. While these are undoubtedly futuristic initiatives to catapult India into an advanced and digital economy, this should be implemented with ease of availability of necessary infrastructure, including internet connectivity at nominal costs and without burdening the GST portal with such additional compliance requirements. The government should take prompt remedial measures to allay any apprehensions over additional compliance on buyers from unregistered supplies and transport operators. For instance, it will be arduous for transport operators to provide vehicle number and driver information while generating an e-waybill in advance, as these are usually decided at the last minute and are heavily dependent on availability. Questions are raised on the need to terminate and generate a new e-way bill in case an order for delivery is cancelled in-transit.

Generation of e-way bills for exempted supplies, non-GST supplies and exports is certainly an additional burden in unwanted situations. While the provisions list items which are excluded from this compliance burden, there should be a clear provision to keep goods such as petroleum products and alcoholic liquor out of the e-way bill compliance till these goods remain outside the ambit of GST. While a plain reading of the provisions suggests that the government has powers to notify e-way bill requirement on movement of goods in relation to a “supply” or “other than supplies”, it would have been prudent to use the term “taxable supplies” instead of keeping the lettering of the provisions open to interpretation.

Besides, brainstorming is required on aspects such as furnishing a plethora of details, the requirements of physical verification of conveyance, of e-way bill for intra-state movements and the setting up of a practical pecuniary threshold for the generation of e-way bills. While the provisions ensure uniformity across India, industry continues to confront implementation issues. Under these circumstances, the decision of the government to defer pan-India implementation till April 2018 and conduct pilot projects in certain states for identifying teething issues comes across as a wise one. A well-assayed strategy, after duly identifying the possible repercussions would moderate the transitional difficulties so that India can safely foray into a newer path and aid the endeavour of the government to foster ease of doing business in India!

via Check post raj: GST Council must end the e-way bill nightmare – The Financial Express

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