In the pre-GST era, traders could not supply goods without getting waybills from VAT authorities. These waybills were physical documents that allowed movement of goods. Obtaining these waybills was a cumbersome process and caused restricted movement of goods. The weapon of choice to iron out these pre-GST transportation woes is the E-Way Bill Implementation
Even while GST was under development, it was hailed as the biggest tax reform that would turn India into a common market. Its purpose was to remove discrepancies in inter-state movement of goods.
Reasons for bumpy E-way Bill implementation:
Check posts dismantled:
Dismantling check posts was a major achievement. Until state governments realized that the corruption and tax evasion had increased. The state government inspectors now have mobile vans. `instead of speeding up the goods movement, dismantling of check posts has slowed it down.
The validity depends on the distance and the date and time of generation of e-way bill. For up to 100 km, an e-way bill will be valid for 1 day, and so on. If there is a change in the destination or the system fails, the validity may expire. In either situation, transporters would have to generate a fresh e-way bill. The transporter might not be equipped to generate the bills. Also, there are possibilities of the portal crashing if too many people are using it at once.
Let’s understand this point with an example.
A trader will have to generate two separate bills to transport a refrigerator costing more than Rs. 50,000. First from the factory to the dealer and second, to the customer’s house. One more bill in case of change of the mode of transportation. If the customer cancels the order, he will send it back and the trader will have to generate another bill.
Further, intra-state movement of goods will also require e-way bill. This increases the paperwork for dealers who have more than one client.
As explained in the 3rd point above, the documentation increases depending on the situation. Generating so many bills would add the burden on the GSTN which is already struggling. Invoice matching adds another layer of complexity to the whole process.
Tracking the transport vehicle and mapping the soft-copy of the e-way bill would require installation of a radio frequency identification device in the transporter’s vehicle. This will be an additional cost. The transporter would have to train the drivers to operate the E-way bill portal to upload any information while in transit. The transporter will have to bear the training costs. It could be a recurring cost for the transporter considering the labor turnover ratio.
One of the biggest challenges is the reliability (or lack thereof) of the IT Network. The consignor, consignee or the transporter would have to log in to generate the bill. The first challenge crops up here – in some cases, it takes multiple attempts to log in. The portal maybe unable to handle the heavy traffic and crash leading to delay in the supply of goods.
Kerala had its own e-way bill system. According to statistics, approximately 1, 20, 000 bills were generated every day. This figure is with respect to one state. It is a commendable and mammoth effort that the GST Council is taking to implement the GST before the decided date. However, a two week trial period seems like a short time.
This time, the NIC is creating the E-way bill portal.
E-Way will be compulsory for
inter-state movement of goods
from 1st April 2018.