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Saturday, March 10

GK: Understanding e-way bill (ECONOMY)


What is an e-way bill?

An electronic way bill or ‘e-way bill’ system offers the technological framework to track intra-state as well as inter-state movements of goods of value exceeding Rs 50,000, for sales beyond 10 km in the new Goods and Services Tax (GST) regime. Under the e-way bill system, there will be no need for a separate transit pass for every state — one e-way bill will be valid throughout the country for the movement of goods.

According to notified e-way bill rules, every registered supplier will require prior online registration on the e-way bill portal for the movement of these goods. The rules also specify that the permits would be valid for one day for the movement of goods for 100 km, and in the same proportion for following days. Tax officials will have the power to scrutinise the e-way bill at any point during transit to check tax evasion.

Any supplier/recipient/transporter can generate an e-way bill. Once this is generated, there will be no need to fill the requisite information in the GST return, as there will be an automated filing of GSTR-1 (which records the details of sales made by a seller to a buyer). A unique e-way bill number (EBN) as well as a QR code will be generated for tracking. Digital facilities via SMS/Android apps will also be provided for the generation of e-way bills. The National Informatics Centre (NIC) has developed a separate portal for the e-way bill.

What is the current status at the state-level over the e-way bill?

Ten states have started trial runs of the e-way bill system. Karnataka implemented the system in September 2017, followed by Rajasthan, Uttarakhand and Kerala. Six more states — Haryana, Bihar, Maharashtra, Gujarat, Sikkim and Jharkhand — started trial runs for e-way bills on Tuesday.

Do any exemptions apply to e-way bills?

The GST Council exempted 154 items of common use, such as meat, fish, curd, vegetables and some cereals, human blood, LPG for households and kerosene for the Public Distribution System (PDS). The system will not be applicable on goods being transported by non-motorised conveyance, and where goods are transported from the port, airport, air cargo complex and land Customs stations to an inland container depot or a container freight station for Customs clearance.

Are there concerns from industry?

Trade and industry have raised concerns about the system being a possible route for the re-emergence of supply chain bottlenecks, and discretionary power to tax officials. The industry views the e-way bill as a system that will check tax evasion to some extent, but may not be able to stop it completely. Also, it adds another layer of compliances for GST payers and, in case of technical glitches, may result in supply chain bottlenecks.

The government has highlighted the powers provided to transporters in the e-way bill rules to report detention of vehicles beyond 30 minutes on the portal. Also, the e-way bill rules facilitate online reporting of inspection and verification of documents.

Potential Benefits?

Logistical speed-breakers cost the Indian economy an extra $45 billion or 4.3 per cent of GDP every year, a McKinsey report says. The LPI Survey by World Bank in 2014 put logistics costs at 14 per cent of the total value of goods in India, while it is only 6-8 per cent in other major countries. The GST E-way bill combination was expected to trim logistics costs by 20 per cent.

Therefore, any change in the system that brings about even small benefits is to be welcomed.



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