Current status of E-Way Bill

E-way bill is an electronic document generated on the GST portal evidencing movement of goods. It has two Components-Part A comprising of details of GSTIN of recipient, place of delivery (PIN Code), invoice or challan number and date, value of goods, HSN code, transport document number (Goods Receipt Number or Railway Receipt Number or Airway Bill Number or Bill of Lading Number) and reasons for transportation; and Part B comprising of transporter details (Vehicle number).

As per Rule 138 of the CGST Rules, 2017,every registered person who causes movement of goods (which may not necessarily be on account of supply) of consignment value more than Rs. 50000/- is required to furnish above mentioned information in part A of e-way bill. The part B containing transport details helps in generation of e-way bill.

To know more about E-Way bills please visit E-Way Bill in GST Article

Proposed Schedule

After the 5th meeting of the GoM headed by Bihar deputy CM Sushil Modi, it was announced that all inter-State movement of goods worth over Rs. ₹50,000 and those that travel more than 10 km from their origin would be tracked for e-way bills with effect from February 1. Individual States would need to notify their e-way bill rules by June 1. Some States (eg: Karnataka) already have a robust e-way bill mechanism while others would toe the line drawn by the GST Council. From January 15, e Way bills can be generated and used optionally.

Challenges

The e-way bill, once generated, is valid for one day for consignment up to 100 km and then one additional day for every 100 km thereafter. If e-way bill is generated, but the goods are not transported then it has to be cancelled electronically through the common portal or the e-way bill may be cancelled electronically on the common portal or through a Facilitation Centre notified by the Commissioner, within 24 hours of generation of the eway bill.

If the transporter transfers goods from one vehicle to another in the course of transit, then he will be required to generate a new e-way bill, before commencement of the movement. All this, given India’s road conditions and the unorganised nature of the country’s transportation industry, will make compliance complex, say industry watchers. For instance, generating a fresh bill online may be impossible if a vehicle breaks down in the middle of a highway, far from internet connectivity.

Transporters may be required to obtain a unique Radio Frequency Identification Device (RFID) and get it imbedded on the vehicle and map the e-way bill to the RFID prior to the movement of goods. It is important to note that e-way bill is required even in case of intra-state movement (beyond 10 km), which was not the case earlier.

Karnataka, Rajasthan and Uttarakhand have all started the e-way bill system. Karnataka, which led the implementation, sees an average of 100,000 e-way bills generated every day and inspects only around two in 1,000 shipments. Rejections are less than 10% of the total inspections. However, there were many states which did not have a system of way bill or a road permit in the erstwhile regime. Hence, it might be a challenge in the states where such a system would be implemented for the first time.

The mechanism proposed requires a certain level of maturity in terms of technology, systems and processes. Large proportion of transport sector is still unorganised and may not be equipped to deal with technology-led compliances.Also,it appears to be too stringent in terms of the reporting requirement.

The common portal that handles registration and issuance of e-Way bill will be implemented by government owned NIC (National Informatics Centre). The current status of the common portal seems unstable and not-secure. CAIT (Confederation of All India Traders) have voiced serious concerns and have gone on to propose that the e-way bills be deferred till April. Secretary General of CAIT Mr. Praveen Khandelwal even proposed a QR code based system to replace e-way bill, however the proposed system appears without any further information. Industry too have been concerned about training their technically challenged man-power, ramping up systems and other issues which may arise while adopting to the e-way bill, as the time given to adopt is very short.

The major reason for advancing the launch was revenue shortfall owing to illegal transport of goods between States following absence of checkposts after the launch of GST last July. Earlier, the GST Council had decided to launch the e-way bill from April 1, 2018.