An electronic system to track movement of products under the goods and services tax (GST) system will be put in place across the country (inter-city as well as intra-city) by June 1, 2018. While the mechanism for e-way Bill, which implies all goods worth over Rs 50,000 will have to be pre-registered online before they are moved for sale beyond 10 km, will be introduced on February 1 for inter-state carriage, its uniform pan-India implementation (covering goods movements within states too) will come into effect by June 1, the GST Council decided at a meeting held through video-conferencing on Saturday.
The e-way Bill, resisted by businesses so far, is expected to help the Centre and state governments address the issue of falling revenues by arresting evasion of taxes under GST. Once this system is in place, central and state tax authorities will be able to track the inter-state and intra-state movement of goods. Tax commissioner or an officer on his behalf will be authorized to intercept any conveyance to verify the e-way bill or the number in physical form for all supplies.
Earlier in October, the GST Council had decided that e-way Bill would be introduced in a staggered manner from January 1, 2018, and its national rollout was scheduled from April 1 of that year. The industry had demanded its deferment. A GST advisory committee, chaired by Confederation of All India Traders secretary general Praveen Khandelwal, had earlier suggested deferment of e-way bill till 2019. The panel also wanted an alternative method in place of e-way bill. After the latest decision on Saturday, Khandelwal said the e-way Bill should be implemented from April 1 instead of February 1. He also reiterated CAIT's suggestion of an alternative model of using a Quick Response (QR) code on each invoice, to protect traders from harassment since it will be self-generated.
But, even without the introduction of nationwide e-way Bill, the system is already running in some states such as Karnataka. The states which are already using the system can be early adopters of national e-way Bill, a statement issued by the Council said on Saturday. ‘’But in any case, the Uniform System of e-way Bill for inter-State as well as an intra-State movement will be implemented across the country by June one, 2018," it said.
The Council in its meeting, chaired by Finance Minister Arun Jaitley, reviewed the progress of readiness of hardware and software required for the introduction of nationwide e-way Bill system, being developed by National Informatics Centre (NIC) along with GST Network.
The e-way system will be ready for rollout on a trial basis latest by January 16 next year. Trade and transporters can start using the system on a voluntary basis from that day.
"The rules for implementation of the system for inter-state movement of goods on a compulsory basis will be notified with effect from February 1, 2018. This will bring uniformity across the states for seamless inter-state movement of goods," an official statement said. It added that states can choose their own timings for implementation of the Bill for intra-state movement of goods on any date before June 1, 2018.
Ansh Bhargava of Taxmann said the decision to advance the implementation of the Bill reflected that some serious gaps in the GST system had been noticed by the government. The decline in the revenue on account of GST and unaccountable goods crossing the state borders could be among the reasons for its early implementation, he said.
The GST collections slowed to the lowest level at Rs 83,346 crore in October.
Pratik Jain of PwC India said, "We were hoping that the Bill would be deferred for some time and possible alternatives would be explored as suggested by the GST advisory committee recently." He said it was now important to ensure that all states had common e-way Bills. "If implementation of this system is not done properly, it could lead to significant supply chain bottlenecks and somewhat dilute the objective of one nation one tax," he said.
According to M S Mani of Deloitte, the mandatory roll out of the e-way Bill from February 1 could cause difficulties for businesses , especially in many states that do not have any such requirement at present. The concerns over revenue leakages in GST could also have been addressed by bringing the e-way Bill provisions for certain classes of sensitive goods initially.
Archit Gupta, CEO ClearTax, said the council's decision to allow trials in January before actual implementation of e-way Bill would help transporters and sellers understand the requirements and prepare in advance.
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