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
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.
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.
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!