Amid rising concerns of revenue leakage, the GST Council on Saturday decided to bring forward the mandatory date for implementation of the inter-state e-way bill mechanism to February 1 next year for all states. The council also decided that states will put in place the mechanism for intra-state goods transport by June 1.
Under the e-way bill provision, the transporter of goods is required to generate a bill electronically on the GST Network portal for carrying goods worth more than Rs 50,000. The mechanism had earlier been deferred by the council till March next year to ease compliance burden on taxpayers and to allow time for development of hardware and software required for its rollout. The states were allowed to continue with the existing system in the meantime. “The rules for the implementation of nationwide e-way bill system for inter-state movement of goods on a compulsory basis will be notified with effect from February 1, 2018. This will bring uniformity across the states for seamless inter-state movement of goods,” the government said in a statement. It added that the mechanism would be ready for trial run by January 16. However, states were allowed till June 1 to implement the mechanism for movement of goods within the state.
The government said the deadline was brought forward as traders and transporters had pleaded that absence of e-way bill was causing undue hardship in the inter-state movement of goods. “Once implemented, it (e-way bill) would help the government check evasion of taxes, but on the flip side it would add to the compliance burden of tax payers. Further, the government should ensure that the IT systems are completely ready before such implementation,” Abhishek Jain, partner, EY, reacted to the news. “We were hoping that e-way bill would be deferred for some time and possible alternatives would be explored. It is now important to ensure that all states have common e-way bills and suggestions made by industry for simplification are taken into consideration.
If implementation of this system is not done properly, it could lead to significant supply chain bottlenecks and somewhat dilute the objective of ‘one nation, one tax,” Pratik Jain, leader, indirect tax, PwC, said.“The sudden meeting of the council signifies that the issue of e-way bills is very serious and there is a concern over potential revenue leaks in the absence of a nationwide uniform tracking platform for goods. Businesses hope there will be no technology issues in generating e-way bills; a testing window of two weeks appears to be very small,” said MS Mani, senior director, Deloitte.