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E-way bill system: all you need to know

Context:

  • The GST e-way bill system has been recently rolled out all over India as part of anti-tax evasion measures under the new tax regime.

Background:

1st April, 2018:

  • The group of minister (GoM) formed to oversee the implementation of the Good and Services Tax (GST) implemented the e-way bill for inter-state movement of goods all over India.

 E-way bill:

  • An electronic documentation.
  • Document contains details about movement of goods.
  • Can be generated from the Good and Services Tax Network (GSTN).
  • 25-50 lakh e-way bills to be generated every day, and that may even go up to 75 lakh per day.

Key notes about E-way bill:

  • Mandatory from 1st April, 2018 for all inter-state transport of good.
  • Consignment should exceed Rs50, 000 in value.
  • Compulsory for the moving goods within a state in a phased manner from 15th April, 2018.
  • Its validity varies depending on the distance that the goods have to travel.
  • Some goods that are out of the e-way bill’s ambit include perishable items such as meat, milk and milk products and fruits and vegetables.
  • Other items that don’t need an e-way bill are gold and silver jewellery, cooking gas cylinders, raw silk, wool and handlooms.
  • Goods will be inspected only once during the journey except in cases where specific information on tax evasion is received.

Significance of e-way bill:

  • Key anti-tax evasion measure,
  • Crucial part of the GST architecture,
  • Provide a boost to GST revenues,
  • Dissuade tax evaders from underreporting transactions, and
  • Check instances where the entire transaction is not recorded due to connivance between the seller and buyer.

Concerns rose over e-way bill:

  • May cause a disruption to trade,
  • Technology system may not be prepared to handle the huge e-way bill volume,
  • Long delays in generation of GST e-way bills,
  • Trade may come to a standstill,
  • Potential scope for harassment by tax authorities,
  • Inadequate knowledge about the process of e-way bill among vehicle drivers, and
  • Taxmen have powers to stop trucks and check e-way bills which may lead to rent-seeking.

Way ahead:

  • Anti-evasion officers need to be deployed,
  • Limit the frequency of inspections for goods moving across States, and
  • Educate the general mass with e-way bill and its underpinnings.
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