GST: Companies on tenterhooks as electronic way bill comes into play

National Highways Authority of India
A day ahead of the countrywide roll-out of the electronic way (e-way) bill to plug revenue leakage in the goods and services tax (GST) regime, companies were trying to meet the new compliance requirement amid some reports of a crash on the portal in question.

Companies were seen to be grappling with system issues on the National Informatics Centre (NIC) portal over the past two days, in addition to the inconsistent intra-state roll-out across the country.


While all states will introduce the e-way bill system for inter-state movement of goods from Thursday, 13 of them will also mandate it for movement of goods within or intra-state.


E-way bills will help central and state tax authorities track inter-state and intra-state movement of goods that are part of consignments of Rs 50,000 or more. A tax commissioner or an officer empowered by him/her will be authorised to intercept any conveyance to verify the bill or the number in physical form for all supplies.


The central government has assured smooth introduction of GST Network (GSTN), the information technology backbone for the tax, said 2.8 million e-way bills had been generated by transporters in the country in the 14-day trial period starting January 17.


In Andhra Pradesh, Arunachal Pradesh, Jharkhand, Bihar, Haryana, Kerala, Karnataka, Tamil Nadu, Sikkim, Telangana, Uttarakhand, Uttar Pradesh and Puducherry, the e-way bill will be mandatory for both inter-state and intra-state movement of goods. Maharashtra will introduce the intra-state e-way bill from April 1 and West Bengal from May 1. Gujarat is making it mandatory for intra-state movement from Thursday for only 19 commodities.


“The NIC site crashed for two hours on Tuesday and was quite intermittent today. People are really struggling with it. It is a big mess,” said a company finance head, without wanting to be named.


The revenue slowdown prompted the GST Council to call an urgent meeting on December 16 and advance the bill’s rollout on inter-state movement from February 1, from the earlier decided date of April 1, 2018. For intra-state carriage beyond 10 km, this will be mandatory from June 1.


The case in point is the composition scheme, which yielded Rs  4.21 billion for the financial year’s second quarter (July-September) under the composition scheme, marginally higher than Rs 3.36 billion for the first quarter. Officials have sensed evasion in this but expressed the hope that collections will improve once the e-way bill is introduced across the country from next month for inter-state movement of goods.


Another company executive said it was a difficult situation for companies. They’re doing it manually and it will take a couple of months to automate the process. “There is no clarity as to how the e-way bill rule applies,” he added.


Companies say there is lack of clarity on how the bill will apply in sales returns. “If I sell and send a consignment to a customer, who does not accept it, who will issue the e-way bill if the consignment is returned,” asked a senior executive of a consumer goods entity.


Besides, in cases of multiple deliveries by the same truck, how many e-way bills will need to be issued is another concern. “Our truck will supply eatables to 50 small retailers in one trip. How many way bills do I generate?” he asked.


However, the finance ministry has said an aggregate e-way bill could also be generated in such cases. As such, it seems to be an awareness issue than an actual problem, said an official.


The e-way bill system is being developed by NIC. Other IT matters related to GST are being managed by GSTN, a private body. An advance of Rs 400 million has been given to NIC to implement the mechanism.


Bipin Sapra, partner at consultancy EY, said companies faced a number of issues on the way e-way was implemented. Some were due to lack of clarity on what to do in certain cases. Then, there are procedural issues being faced on the portal for both supplier and logistic companies.


“Since most states are also introducing it for intra-state movement, practically all shipments of large companies would need the e-way bill,” said Pratik Jain, partner at consultants PwC India. With multiple stakeholders in the supply chain, most companies are busy with last-minute preparation for compliance, he added.


“It would have been preferable to have e-way bill introduction for intra-state movement uniformly across states. The staggered introduction would make it difficult for multi-state businesses to comply,” said M S Mani, partner, Deloitte India. This could have begun after stability was achieved on inter-state movements.


“A product-wise requirement specified in some states is making it even more difficult for businesses to set up processes and comply,” he said.


Bihar’s finance minister, Sushil Modi, had flagged the need for an efficient troubleshooting mechanism to avoid disruption. He had also recommended appointing a nodal officer to address hurdles in the functioning.


“The announcement of implementation from February 1 has left several players of the logistics industry in a fix,” said Anjani Mandal, chief executive at Fortigo, a logistics solutions company.

What Bihar says


E-way bill would be mandatory for the movement of goods within Bihar from Thursday onward. The permits can be generated through computers as well as mobile phones. 


The Bihar government has also decided to implement the e-way bill system for intra-state transportation of goods worth over Rs 2,00,000.


“The GST is one tax for one nation. It played a great role in unifying te country as it made check-posts and barriers obsolete. It resulted in significant saving of time and resources in transportation of goods from one place to another,” told Modi, who also holds the finance portfolio in Nitish cabinet in Bihar.


“Now, the transporters don’t have to carry different transit passes for different states. With one e-way bill, goods can be transported to any part of the country. It can be generated through computers as well as mobile phones. The whole process is very user friendly and transparent,” he added.


The Bihar government, on the other hand, has also decided to implement e-way bill system for intra-state transportation of goods worth more than Rs. 2 lakh. “The GST council had earlier decided to implement e-way bill system from June 1, but given the fall in revenue income we decided to prepone it from February for inter-state trades. However, the council didn’t interfere with the deadline for intra-state trades, which is still June 1, 2018. We have an existing IT infrastrure for e-way bills, but given the user-friendly interface of the new system, we decided to adopt it.” Bihar is one of the 15 states to adopt the e-way bill system from Thursday. 


With inputs from Satyavrat Mishra

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