CHALLENGES TO E-WAY BILL

The Goods and Service Tax has been one of the biggest tax reforms after independence and a step towards mainstreaming the taxation system. Though the traders and industries are grappling to come in terms with GST compliance, the E-way bill process could be another arduous process to contend with.  The new system that has been introduced under the GST regime is the online generation of the E-way bill or electronic way bill for the transfer of the goods of worth Rs. 50,000 or more. Under this all the transporter or the supplier will have to upload all the details of the goods and the vehicle on the GST portal. After the successful generation of the E-way bill, the E-way Bill number (EBN) will be made available to the transporter, the supplier and the recipient by the portal itself.

The present E-way bill system places too much reliance on the technological method starting from movement of goods to its final destination. Though there are benefits of technology which enhances efficiency in the system but at a same time it would create problem for the transporters who belong to the rural areas and are not techno-savvy. It is fact that the logistics and the transportation in India are highly unorganised and also not very tax compliant.

When a new system is introduced the system takes its own time to proceed with its lacunas and overcomes with time. Here are the other few challenges which would be faced by transporter, industry and e-commerce firms delaying the smooth movement of the goods from one place to another.

1.     Where a transporter transfers the goods from one vehicle to another in the duration of the transit, a new E-way bill has to be generated from the online portal.

2.     Where the goods are to be shipped from the factory to the dealer and then to the consumer, two separate E-way bills has to be made.

3.     In case the recipient of the goods has cancelled the order before the order is about to reach, then again another E-way bill has to be generated.

In all the above cases the older E-way bill shall be nullified and the new E-way bill will be generated. The above multi-step process would create a lot of problems for the traders as well as the e-commerce firms. Moreover this would put lot of load on the portal which would delay the smooth movement of the goods from one place to another.

The Radio Frequency Identification Device (RFID) could be another setback for many small and medium based transporters/ traders putting onerous conditions of compliance.

Another issue which might arise is regarding the validity of the E-way Bill which is dependent upon the distance of the transport of the goods. It is not clear that how and by whom the distance would be measured for example, where transporter makes multiple stop at multiple customer, how would he give an explanation to the GST officers that he have traveled less than 10 kms.

Considering the few challenges which would be overcome with time but the implementation of the E-way bill would certainly help to check the revenue leakage and track the movement of consignments and do away with system of physical checks.