E-way bill: Govt hopeful that portal's performance will be robust this time

The first introduction of the GST bill regime had failed as the system crashed on the very first day on Feb 1 due to heavy load

Come April 1, all eyes will be on the rollout of electronic-way bill for inter-state movement of goods worth Rs 50,000 or more, especially so because the first introduction of the system on February 1 had failed as the technology backbone crumbled under heavy load. Some 480,000 bills had been generated on Day-1, causing the system to crash.

Now, after two rounds of testing, the group of ministers to fix the issues with the GST portal, under Bihar Deputy Chief Minister Sushil Modi, is hopeful that the system is ready to take a load of up to 7.5 million e-way bills in a day. The GoM expects that initially 2.6 million bills will be generated and this number will subsequently increase to 5 million.

Of the 9.6 million assessees, 950,000 have moved to the pilot e-way bill. Around 8,500 transporters are generating these bills and 650,000 bills are being generated daily.

So, the GoM is sure that the system will not crash this time. It should be noted that rollout of e-way bill is still tentative because the GST Council is yet to take it up at its March 10 meeting, though that might be only a formality.

The e-way bill system is meant for online tracking of inter-state movement of goods to curb any evasion of the goods and services tax (GST).

Not everyone is convinced about the need for such a system. The entire GST framework has been built over input tax credit, so there should not be the need for separate tracking, many feel. It could be tracked from credits given for input taxes. But the finance ministry thinks otherwise. It says the GST system could track tax evasion but only when there is a chain. What if the entire chain decides to evade GST? E-way bill is precisely meant to address this, the ministry claims.

The GST data, particularly for the composition scheme, substantiates the finance ministry’s fears. Under the composition scheme, traders, manufacturers and restaurants with an annual turnover of up to Rs 15 million are allowed to pay taxes at a flat lower rate once in a quarter, but they are not eligible for input tax credit.

Just Rs 4.21 billion was paid by dealers under the composition scheme for the second quarter, marginally higher than Rs 3.36 billion for the first quarter. It is this evasion that e-way bill will detect.

However, unlike the present system in many states, there will be no fixed check posts for this; there will be random mobile checks. Generally, there will be inspection once during the entire journey.

To prevent misuse, there will be facility for transporters to upload complaints if their vehicles are detained for more than 30 minutes.

According to the finance ministry, e-way bill is a simple token that can be generated online and even through SMS. Unique e-way bill number (EBN) or QR code will be generated through these modes.

Anyone in the GST chain – supplier, recipient or transporter – can generate the bill. These bills are linked to supply returns (GSTR1), so generating them will mean automated filing of returns. The bills will be valid for 100 km in 24 hours, after which another bill will have to be generated.

Abhishek Rastogi of Khaitan & Company says the limited validity period for the bills and compliance problems in case of truck breakdowns requiring transfer of consignments midway at odd hours is a challenge.

"The deferment of the bill (to April 1) as well as the decision to implement intra-state compliance in a phased manner seems to be a good idea. Let us hope some of the difficulties faced by businesses and transporters will be addressed," he says. 

NEW STRATEGY

• The GoM expects 2.6 million bills will be generated initially  and this number will increase to 5 million
• Of the 9.6 million assessees, 950,000 have moved to the pilot e-way bill system. Around 8,500 transporters are generating these bills and 650,000 bills are generated daily
• Unlike the current system in many states, there will be no fixed check posts; there will be random mobile checks
• To prevent misuse, there will be a facility for transporters to upload complaints if their vehicles are detained for more than 30 minutes