Given the security concerns over movement of gold, an encrypted version of the e-way bill is being considered
The proposal to introduce e-way bills
on movement of gold has gathered momentum, on the back of subdued GST collections and rising prices of the yellow metal.
A Group of Ministers (GoM) led by Kerala Finance Minister Thomas Isaac will take up the proposal — aimed at checking tax evasion
and smuggling — on Friday.
Given the security concerns over movement of gold, an encrypted version of the e-way bill is being considered.
are compulsory for consignments of over Rs 50,000, but gold is exempt. The proposal was initially mooted by Kerala, which flagged the severe decline in revenue from the precious metal following introduction of the GST. It has, however, been opposed by key NDA-ruled states such as Bihar and Gujarat.
“The GoM is finally meeting to take the discussion forward on introducing e-way bills
on gold movement to tighten enforcement amid reports of GST evasion.
An encrypted version of the e-way bill is being examined, but the feasibility remains key. Kerala wants the e-way bill to be enacted in its state, if not the entire country,” said a government official aware of the development.
Bihar Deputy Chief Minister Sushil Kumar Modi, West Bengal FM Amit Mitra, and Punjab FM Manpreet Badal are also members of the GoM to discuss feasibility and implementation of the e-way bill requirement for gold and precious metals. The GoM last met in January.
Isaac questioned BJP-ruled states for opposing the e-way bill on gold, in a tweet last month: “Can you tell me a commodity that can be transported anywhere in India without documentation? Any commodity above ₹50,000 would require an e-way bill for transportation. But not for gold. Kerala is fighting for gold to be brought under e-way bill. BJP opposes. Why?”
Kerala says it is very easy for dealers to carry gold in suitcases and sell at the customer’s premises. The matter was also discussed in the GST Council
meeting in June last year.
Some members of the GoM had said last year that an alternative must be arrived at, instead of an e-way bill as it could lead to security breaches. Besides, the threshold of Rs 50,000 was too low for a precious metal like gold. Based on the present rate, Rs 50,000 would mean less than 10 gm of gold.
told Business Standard that an e-way bill on movement of precious metals was not feasible in terms of implementation. “E-way bill on gold can’t be implemented because administration may not be easy,” said Modi.
However, Haryana has pitched for implementation of the encrypted E-way bill in a fixed timeframe by the GST Network (GSTN).
Gujarat had opposed the proposal on grounds that information on the movement of gold or precious metal/stone could pose serious security risks. The joint secretary of the revenue department had also expressed reservations due to practical difficulties in it.
Seen as a safe haven amid the pandemic and low interest rates, gold prices have touched a record high, with prices in India having surged beyond 40 per cent in 2020.
Kerala has pointed out that at the end of the value-added tax regime, revenue collected from tax on gold was approximately Rs 630 crore at an effective rate of 1.25 per cent, as they had a Composition Scheme for them.
However, even at the existing rate of 3 per cent in the GST regime, revenue earned was only Rs 244 crore. GST collections stood at Rs 87,422 crore in July, compared to Rs 90,917 crore in June, showed data released by finance ministry on Saturday.
Collections are, in fact, 14.6 per cent lower than July 2019, when the mop-up was a robust Rs 1.02 trillion. In order to improve collections, the government is looking to introduce more anti-evasion measures, including e-invoicing for large firms with turnover of Rs 500 crore.