E-WAY BILLS IN GST

[Dr. Sanjiv Agarwal]

The Central Board of Excise and Customs has issued rules on the Electronic Way bill that requires registered entities to furnish information to the GST-Network (GSTN) website, relating to goods worth more than INR 50,000 they intend to move within a state or outside.

Moving goods worth more than INR 50,000 under GST will require prior online registration of the consignment and securing an ‘e-waybill’ that tax officials can inspect any time during transit to check tax evasion.

GSTN will generate e-waybills valid for days, depending on the distance to be travelled one day for 100 km. According to norms, 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 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.

The rules authorise the tax commissioner or an officer empowered by him on his behalf to intercept any conveyance to verify the e-way bill or the number in physical form for all inter-state and intra-state movement of goods. Further, CGST Rules, 2017 as notified by Notification No. 3/2017-Central Tax dated 19.06.2017 stipulates vide rule 138 as follows:

“Till such time as an E-way bill system is developed and approved by the Council, the Government may, by notification, specify the documents that the person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage.”

According to the guidelines, where a vehicle has been intercepted and detained for a period exceeding 30 minutes, the transporter may upload the said information in (prescribed form) on the common (GSTN) portal.

The salient features of e-way bills are as follows:

• Freight worth over INR 50,000 will require obtaining prior registration and generation of e-way bill under the GST regime
• Tax officials would be empowered to inspect e-way bills any time during the journey to check for tax evasion.
• Every registered person who causes movement of goods of consignment value exceeding INR 50,000 in relation to a supply, for reasons other than supply, or due to inward supply from an unregistered person, shall before commencement of movement, furnish information relating to the said goods in Part A of Form GST INS-01, electronically, on the common portal GSTN.
• The e-way bills will be valid for days from the date of generation depending upon the distance the goods have to be transported, where one day would equal 100 km.
• The rules propose to authorise the tax commissioner or an officer empowered by him to intercept any conveyance to verify the e-way bill or the number in physical form for all inter-State and intra-State movement of goods.
•  A summary report of the inspection of goods would be expected to be submitted within 24 hours of inspection and the final report within three days.

Vide Notification No. 4/2017-CT dated 19.06.2017 w.e.f. 22.06.2017, Central Government has notified www.gst.gov.in as the Common Goods and Services Tax Electronic Portal for facilitating registration, payment of tax, furnishing of returns, computation and settlement of integrated tax and electronic way bill. “www.gst.gov.in” means the website managed by the Goods and Services Tax Network, a company incorporated under the provisions of section 8 of the Companies Act, 2013.

It may be noted that vide Notification No. 10/2017-Central Tax dated 28.06.2017, as per rule 138 provides that ‘till such time as an E-way bill system is developed and approved by the Council, the Government may, by notification, specify the documents that the person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage’.

At present, some 40-50 per cent of goods moved by road, at a conservative estimate, are under-reported. Under these circumstances, at least having an EBN system to collect data from consignments above INR 50,000 appears to be fair and equitable to suppliers, transporters and receivers.

In case an enforcement officer decides at random to inspect a truck and check the veracity of the declaration by matching with the EBN at a time when the GSTN portal is not functioning, then the vehicle should not be detained beyond 30 minutes.

There can be genuine concerns with e-way bills and consequent actions on enquiry. In case of mismatch or wrong declaration by transporters, goods may be offloaded at the risk and cost of supplier/common carrier/transporter and concerned vehicle should be allowed to go so that other consignments in the truck belonging to several receivers are not held up.

The e-way bill in the GST regime will put an additional layer of documentation by way of prior online registration of the consignment for transporting shipments exceeding INR 50,000.

The requirement of securing e-way bill for inspection by GST officials in transit is likely to lead to interception of vehicles in all inter-State and intra-State movement of goods.

The unorganized nature of the logistics sector may make it difficult for players to adopt to electronic-way bills, as the country readies to migrate to the GST regime. There will be less manual intervention leading to less errors and much clearer documentation. Also, there will be challenges as the sector is unorganized.

On the positive side, it is felt that while it allows Government to keep a tab on the movement of goods to be transported, it will also allow transporters to file a complaint if the vehicle is detained for a period exceeding 30 minutes. The e-way bill portal allows the transporter, supplier and the recipient to be on a single platform through which tracking of goods will be enabled through Radio Frequency Identification.

The use of e-way bills for inter-State movement of goods is a remarkable initiative as it will enable standardization of processes and bring transparency in the system. This proposal has immense potential to root out the corrupt practices in this sector to a large extent. Moving goods with fake bills would be difficult in GST regime. Companies will have to generate electronic waybills through the GST portal for inter-state movement of goods. While this is an improvement over the earlier system, there are fears that trucks may still be stopped at State borders.