In 40 words: Re-deployment of the anti-tax evasion tool E-way Bill is going well, to say the least. GST revenue jumped from 11 crore in March to 1 lakh crore in April. 19 states have adopted E-way Bill mechanism for intra-state goods movement.

E-way Bill Registration, E-way Bill

The logistics industry has been unorganized for as long as one can remember. We have approximately 7 crore goods vehicles with the freight volume at 1.325 billion ton-km. According to YourStory, we spend almost 14% of our GDP on logistics. Obviously, the potential for profits in the logistics sector is largely untapped.

Generation of an electronic way Bill to transport or move goods worth more than Rs. 50,000 is one way to streamline logistics processes. The government’s intention behind implementing E-way Bill was two-fold. It wants to check tax evasion and to organize the transporters via effective goods’ tracking. Working in this direction would give an added boost to India’s logistics ecosystem. The Council also proposed replacing check posts with mobile squads which would also reduce lead time, transportation costs and traffic on major routes.

The features of the E-way Bill tool promise benefits not just for the government but for the transporters and traders as well.

Recap:

When the government introduced the E-way Bill mechanism for the first time on February 1st, it was terribly under prepared (read unprepared). On the very first day, the E-way Bill portal crashed owing to technical glitches. To address and resolve the issues, the government extended the trial phase which started on January 15.

After checking the system’s capacity to handle adequate quantities, the Council proposed implementation of E-way Bill in a phased manner from 1st April. The staggered launch which commenced from April 15th comes with the specific guidelines for all states to adopt the inherited e-way bill mechanism before June 1st. The portal now allows generation and management of up to 75 lakh E-way Bills every day.

Ground Reality:

Till 13th May 2018, more than 4 crore E-way bills have been generated successfully. This includes over 1 crore E-way Bills for intra-state movement. These numbers demonstrate the organization of the largely unorganized logistics sector. One can credit this transition to the phased implementation combined with government’s initiatives to train, educate and prepare taxpayers and transporters.

Although the requirement of a document to transport goods isn’t new, the Way Bill system had several loopholes. Considering the revenue generated in April alone, it would be safe to say that the loopholes have been plugged.

Although the implementation was relatively smoother the second time around, there are a few problems that require solutions. For example, one can extend the validity of an E-way Bill. However, the extension of the validity results in generation of multiple way bill numbers. These EBNs are against a single invoice and could lead to duplication. Also, according to rules, the trader or transporter can extend the validity 4 hours before and after expiry of validity. This time span could be short and impractical.

We believe it is only a matter of time before the government irons out these wrinkles.

A just E-way:

It’s no secret that truckers were often harassed despite having the correct paperwork. This was another problem that the government wanted to weed out. The mechanism limits officers’ involvement to E-way Bill verification and goods’ inspection. If there’s a holdup of more than 30 minutes, the truck driver can upload his grievances on the NIC.

The person in charge of transporting the conveyance need not have a physical copy of the E-way Bill either. In fact, Allahabad High Court ruled that an electronic or digital copy suffices. Transporters would no longer have to grease palms to move their consignment from one state to another. On the other hand, the lack of an E-way Bill or even an E-way Bill number would prohibit supply or movement of goods.

E-way bill software

Outro:

Industry leaders are of the opinion that although the overall implementation is a great success, there are a few aspects that require polishing. The system poses fresh compliance challenges for businesses with multi-states or PAN India operations. Those who have multiple movement of goods on a daily basis require a mobile solution for timely generation of E-way Bill. The software should also enable easy reconciliation with the accounting and invoicing software.

Automation of compliance is paramount to get the competitive edge.