What Does the Future Hold for E-Way Bill?
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Transportation & Logistics industry is an essential and vital cog for lubricating the supply chain ecosystem in India. Estimates peg the growth of this industry at 9% to 10% per annum from $115 billion to $360 billion by 2032. However, such growth will also depend on how soon this industry adapts to the changing taxation landscape of the country.
Tax compliance, inter-state checkpoint maneuvering, scrutiny, and tracking inter-state sales tax are some processes that consume a considerable amount of time in the logistics industry. It was to overcome this hurdle that the government introduced what is known as the Goods and Services Tax (GST). - An incidental and of course, salutary benefit accruing from GST has been the reduction in the number of warehouses operated by companies in different states.
The GST forms, however, did not support the invoice-matching requirement, and there was no way the tax authorities could keep a check on under-invoicing, the actual movement of goods, and inflated input tax credit claims. This further led to a decline in actual tax collection against the budget, apart from other issues. The e-way bill was thus introduced to keep tax evasion under check and monitor trade better. It also aimed at easing transportation of goods and replacing the traditional waybills and transport bills used by companies.
All About The E-way Bill
An e-way bill is a document that must be carried by a person transporting any consignment of goods with a value exceeding INR 50,000 as mandated by the government in Section 68 of the GST Act. It is generated through the GST Common Portal for e-way bill system -- ewaybill.nic.in -- by registered users or transporters and came into effect on 1 April 2018. It can also be generated or canceled through SMS, Android App, and Site-to-Site Integration(through API).
Once an e-way bill is generated by the registered consignor or consignee, a unique bill number (EBN) is allocated and shared with the supplier, recipient, and the transporter. The e-way bill cannot be edited or modified but can be canceled and generated afresh. Once the bill expires, if the goods are still on the road, they cannot be moved except under exceptional conditions such as natural calamity, law and order issues, trans-shipment delay, and accident of conveyance. The e-way bill is a definite solution to link all parties involved in the supply chain -- suppliers, transporters, and recipients. The processes and protocols will become more transparent and organized as there will be a direct connection between what is declared and what is moved. It will also remove any repetitions in data entry.
Challenges and The Way Forward
However, any new policy is not bereft of challenges. One of the major issues faced by taxpayers is connecting to the National Informatics Centre (NIC) portal during peak business hours. A delay in processing the e-way bill can affect the movement of goods which will further translate into heavy losses for businesses. The other concern is security as a lot of data is exchanged over the internet and on the cloud.
Whether the benefits of the e-way bill will outweigh the above-mentioned issues is something that only time can tell. The government is trying to iron out these difficulties and once the processes get rolling, the bottlenecks can be removed one by one. Apart from this, certain measures can reduce the load on the e-way bill generation portal – for instance, real-time access to NIC’s system. This will ensure that the portal is not the only channel that taxpayers rely upon.
Technology can become an enabler when used in the right manner. Many players are using the power of technology to build a more progressive infrastructure in line with the government’s plan of digitizing the entire process of filing returns and generating bills. However, the success rate will depend upon how fast these processes are adopted by the industry. Apart from this, better road and IT infrastructure, as well as flexibility to accommodate exceptional situations, will be critical.