GST: Supply chain intermediaries not ready for transparency, accountability

Movement of goods worth more than Rs 50,000 will require prior online registration on GST portal

With most of the goods transport associations not having their members registered under the Carriage by Road Act, 2007 and its rules under Carriage by Road Rules, 2011, till date, the entire purpose of bringing transparency and accountability into the system is taking a beating amid the implementation of the goods and services tax (GST).

“We have more than 300 members in the association and majority is not registered under the Carriage by Road Act till date,” said N V Prakash Raju, member of executive council at Chennai Goods Transport Association. “We understand that the state transport authority (which carries out the registration) is short-staffed and, hence, registrations are not taking place at expected pace,” he added.

The Chennai Goods Transport Association is not the only transport association in this situation. The members of the Delhi Goods Transport Association are sailing in the same boat.

“There is a lot of confusion about registration under the Act, and as a result, the majority of our 700-800 members remain unregistered,” said Parmeet Singh Goldie, general secretary of the Delhi Goods Transport Association. “No one has still understood the GST norms properly, but fortunately we are exempted so we need not get the GST identification number (GSTIN). There is pressure for registration under the Act, we (members) will register eventually,” he explained.

Under the GST, the government will bring in an e-way bill system, under which movement of goods worth more than Rs 50,000 by a registered entity will require prior online registration of the consignment on the GST portal and securing an “e-way” bill.

In case the e-way bill is not generated by the registered entity, and the goods are handed over to a transporter, the registered entity is required to furnish the information relating to transporter on the common portal and the e-way bill shall be generated by the transporter.

The transporter carrying the goods will be required to carry the e-way bill along with invoice/bill of supply/delivery challan. Since the transaction will eventually be recorded under the GST system, lack of registration under the Act by transport intermediaries could create problems.

Registration is mandatory for all intermediaries of the supply chain, who are also required to reveal their transactions to bring transparency to the system. Supply chain intermediaries typically include goods transport agents (GTAs), freight aggregators, logistics firms, including e- truck entities linking supplier with the consignment receiver.

“Supply chain intermediaries were asked to register under this Act in 2011, within a period of 180 days. It takes three days for this registration. Why have most remained unregistered till date? There is nothing to be confused about and even if they were, intermediaries could have approached relevant authorities then,” said S P Singh, senior fellow and coordinator at the Indian Foundation of Transport Research and Training (IFTRT). The independent research body claims that over 90 per cent of key supply chain service providers remain unregistered under the Carriage Act leading to transactions going unrecognised.

Meanwhile, the Bombay Goods Transport Association said nearly 90 per cent of its members have already registered and are complying with the regulations.

“Members are aware that the registration under this Act is mandatory and seminars are being held to spread awareness. There are about 300 members and the registration process is going smooth,” said Anil Mittal, member of managing committee at Bombay Goods Transport Association.

While Calcutta Goods Transport Association has more than 200 members, officials at the association were unable to reveal the registration status. Registration under this Act involves a total charge of Rs 6,250 for a period of 10 years and is to be carried out by the intermediary in the city where they reside.