GST: E-way bill system to be implemented from Feb 1 to curb tax evasion

The GST provision requiring transporters to carry an electronic waybill or e-way bill when moving goods between states will be implemented from February 1 to check rampant tax evasion and boost revenues by up to 20 per cent.

After implementation of the Goods and Services Tax (GST) from July 1, the requirement of carrying e-way bill was postponed pending IT network readiness. This was done even in the 17 states which in the pre-GST era had a well established electronic challan or e-way bill system, a top government official said.

Earlier, tax evasion was rampant as some preferred not to pay tax by resorting to cash dealing. Once the e-way bill system is implemented, tax avoidance will become extremely difficult as the government will have details of all goods above the value of Rs 50,000 moved and can spot the mismatch if either the supplier or the purchaser does not file tax returns, he said.

The all-powerful GST Council had on December 16 decided to implement the e-way bill mechanism throughout the country by June 1.

The official said e-way bill for inter-state movements will be implemented from February 1 and for intra-state movement from June 1.

The official said states have been given the option of choosing when they want to implement the intra-state e-way bill between February 1 and June 1.

They have also been given the option to exempt movement of goods within 10-km radius, he said, adding all essential goods have been exempted from the requirement of carrying e- way bill.

Besides plugging tax evasion, the e-way bill will boost revenues by 15-20 per cent, he said. "The experience of states which had e-way bill system in pre-GST era showed a 15-20 per cent rise in revenue," he said.

The official said a pilot of e-way bill has been successfully run in Karnataka and the IT system is fully geared to meet any requirement.

E-way bill is an electronic way bill for movement of goods which can be generated on the GSTN (common portal). Movement of goods of more than Rs 50,000 in value cannot be made by a registered person without an e-way bill.

The e-way bill can also be generated or cancelled through SMS, he said. When an e-way bill is generated, a unique e-way bill number (EBN) is allocated and is available to the supplier, recipient, and the transporter, he added.

Trade and transporters can start using this system on a voluntary basis from January 16.

The rules for implementation of nationwide e-way bill system for inter-state movement of goods on a compulsory basis will be notified with effect from February 1, 2018.

This will bring uniformity across the states for seamless inter-state movement of goods.