GST regime: E-way bill system may deter smooth flow of goods

Surveillance squad of states or Centre manning highways may lead to harassment and delays: Experts

The electronic way (e-way) bill system, expected to be put in place by October 1, can potentially turn out to be a hassle for industry if human intervention is not minimised. Although there will be no check posts, random surveillance by tax officials may deter seamless movement of goods and services across borders.  According to tax experts, the surveillance squad of the state or Centre manning the highways may lead to harassment and delays if not kept in check.

In the 20th GST (goods and services tax) Council meeting chaired by Finance Minister Arun Jaitley on Saturday, it was decided that e-way bill will be implemented across the country and that there will be no check posts, to allow a smooth flow of goods and services. It exempted the need for e-way bills for movement of goods up to 10 km, tax exempted items and supplies worth up to Rs 50,000. 

“There will be no check posts but there will certainly be some human intervention in the form of surveillance squads. They will randomly pick up trucks and check if they are carrying appropriate goods and have all permits in place. But this may result in harassment,” said M S Mani of Deloitte.

E-way bills will essentially help central and state tax authorities track inter-state and intra-state movement of goods. Tax commissioners or an officer empowered by him on his behalf will be authorised to intercept any conveyance to verify the e-way bill or the number in physical form for all supplies. 

Mani suggested that it will instead be a better idea to have an e-way bill only for certain items like marble, granite, petroleum products etc than for all products. “E-way bill on all goods will take away GST’s seamless movement of goods across border,” he said.

Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN) shall be made available to the supplier, the recipient and the transporter on the common portal.

The transporter or a person in-charge of conveyance will be required to carry the invoice or bill of supply or delivery challan, and a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency Identification Device (RFID) embedded on to the conveyance.

Pratik Jain of PwC India said that real benefits of the GST to be realised, it is important that supply chain bottlenecks are reduced. “It is debatable as to whether e-way bill is required at all or transport documents including copy of the invoice should suffice,” said Jain.

The Council decided that 100 km will need to be covered within 24 hours. The permit for 100 km will be cancelled after 24 hours. However, delay on account of genuine cases like breakdown of transport vehicle, will be accounted for.