The
all-new E-Way Bill under GST has been rolled out on Sunday – 1st of
April, the beginning of the new financial year. Ever since the announcement of
its impending roll-out, there has been some confusion amongst traders and
business across the country. The response was no different from when GST was
rolled out, as a matter of fact. Every new reform evokes such mixed reactions. But
knowledge dispels all confusion -as it must.
What is E-Way Bill
The
E-Way Bill is an electronic bill generated to track the movement of interstate
goods. Every consignment over Rs. 50,000 falls under its ambit. The
transporter, at the point of dispatch, has to raise the bill via E-Way bill
system under its GSTN. The validity of the bill depends upon the distance.
Typically, a bill is valid for one day for every 100kms.
Though
it is applicable on every kind of product that is traded, there are certain
exemptions. Perishable products like fruits & vegetables, dairy products,
and meat are exempted from e-way billing. Besides these handlooms, raw silk,
gold and silver jewellery and cooking gas cylinders too are exempted.
Purpose of E-Way Bill
The
government believes that this will help in keeping a check on tax evasions
along with illegal activities like smuggling. Generating an E-Way Bill will
help in registering every eligible trading activity that is carried out in the
country.
Some questions businesses have about the E-Way Bill
- Technology
A significant portion of the transport industry’s comprises
businesses that are not technology-lead. They are more traditional and they
worry if they have the skills to deal with the new technology. The task for
them is to adopt and comply with the new technological advancements in the
industry.
- Extra
Staff
The industry is very traditional, in many cases run
by families that have been in the game for years. These are folks who are rich
in experience, but perhaps not in educational degrees. In order to comply with
the E-way billing system, they worry if they will have to hire dedicated staff
for it. This could, in turn, add to their monthly expenses.
- Hassle
for Contractors
Many of the folks impacted by the new system are
transport contractors. They are not the ones paying the E-Way bill. That’s
between the consigner and consignee. But, they will still need to register for
a GST number and file a monthly return, even if there is nothing to report. For
this, they have to pay a monthly fee to their CA. In a sense, they are going to
incur unnecessary expenses without even having to pay for the E-way bill.
- Infrastructure
The earlier implementation in February saw the
E-way Bill system’s inability to handle the volume of trade carried every day.
The system saw glitches which had put the trade on standstill forcing the
government to roll it back until April.
What is the Government Doing?
The
government had rolled back the E-Way Bill in February on the grounds of the technological
weakness of the system. The current system, which has been implemented from the
1st of April, is capable of handling around 76 lakh E-Way bills in a day
compared to just 25 lakh in February.
One
of the main concerns of traders was rent-seeking by the tax authorities. The
taxmen have the authority to stop trucks for checking at various points. The
government has put an end to this woe by passing a rule under E-Way Bill that
the truck will be checked just once at the time of dispatch until and unless
there are reports of suspicious activity being carried out on the way. If a
truck is detained for more than half an hour, the trader can report it directly
on the portal.
The
other concerns of small businesses regarding the need for building a technology
capability are valid to some extent, but the Government is seeking to allay
concerns by saying that the system is easy to adopt. The growing sense is that
adopting technology will also ultimately benefit these businesses -this could
be the spark that helps then grow and scale beyond their earlier limitations.
Verdict
So
far, there have been no major issues reported since the rollout on 1st
of April. The government claims it to be a success without any major glitches. The
centralization of all trade activities will eradicate the malpractices and tax
evasion instances. The traders, after initial inhibitions, seem to be accepting
the E-Way Bill system. The new way is here -it’s time for a big change!
