The government expects goods and services tax (GST) collections to rise by 20-25 per cent after the introduction of electronic way (e-way) bills, which will track the movement of consignments across trucks and help check revenue leakage.
Tax officials believe some businesses are on a tax holiday since the introduction of GST. That’s because under GST, partial evasion is almost impossible. You pay either 0 per cent or 100 per cent. “We know of businesses that have found a way to stay out of the 100 per cent tax net. E-way bill is one way to get them into the system. States that have moved to e-way bill for VAT had seen 20-25 per cent increase in annual tax collections for several years. We expect same to happen with national e-way implementation,” said a senior government official.
Already, 17 states have e-way bills in some form, which includes Uttar Pradesh, Uttarakhand and several eastern states. But there are 14, including Maharashtra and Madhya Pradesh, which will move to the new regime from February. Some of the states that already have e-way bills track movement of goods within as well as outside the state. While e-way bill was to kick in with the launch of GST in July, the government had deferred the rollout till the system was in place.
The new nationwide e-way bill system will be ready from January 1 and companies can start generating the electronic tracking tool from January 15 and it will be compulsory from February 1 with the intra-state bills becoming mandatory from June. This will do away with the state-to-state variations in e-way bills.
Currently, a trial run is underway in Karnataka and officials said that the system is working perfectly with the state generating 1.1 lakh e-way bills daily. Following a national rollout, the government expects around 40 lakh e-way bills to be generated every day, of which 15-16 lakh, or around 40 per cent, is meant for inter-state movement.
Officials said that nearly 50 per cent of the goods that make up the consumer price index will be exempted as and only goods with a value of Rs 50,000 need to generate it. In addition, transport of goods in non-motorised vehicles such as handcarts also do not have to comply with the requirement.
Officials said, initially, trucks will be physically inspected for carrying e-way bill at least once during their journey. “Eventually, we would like to do away with the system of physical check. We could build e-way bill details in RFID tags. If businessmen fill their e-way bills properly, their GSTR-1 will get filled automatically. A buyer, seller or transporter can prepare the e-way bill,” said an officer.
(This article was originally published in The Times of India)