Thanks to the Goods and Services Tax (GST), most states have dismantled border check posts, a step that improved supply chain efficiency and could potentially reduce cost of goods for the consumer. But the e-way bill mechanism, effective October 1, could dent these prospects until a well-equipped technology system evolves and small businesses, vendors and transporters also assimilate it, feels the industry. The objective of the e-way bill is to enable the taxman to track movement of goods and thereby ensure that the state, where the sale takes place, gets the tax revenue. An e-way bill will have to be generated on the common GST Network portal for goods worth more than `50,000, either by a registered person or the transporter — the validity of the bill will depend on the distance that the goods are to travel. Though the government has addressed some of the concerns of the industry — for instance, it allowed deemed acceptance of the goods 72 hours after the bill is generated — the industry still feels that the system could prove to be cumbersome.
Logistics companies and e-commerce players are among the first to get a taste of the e-way bill system. K Satyanarayana, director and co-founder, Ecomm Express, said: “In certain cases where the seller does not generate an e-way bill, it is the transporter which has to do it. This implies that the logistics firm needs to gather all the information about the products, including price, to be mentioned in the bill. This could lead to delay in shipment.” According to Vikash Mohan, head, ground operations, Blue Dart, “For generating an e-way bill, a transporter has to manually capture the GST identification number of shipper and recipient in case of B2B transactions and only of the shipper in case of B2C, along with invoice number and date and HSN (Harmonised System of Nomenclatures) codes of the products. This will then have to be posted on the GSTN portal to get the e-way bill number.”
Under the VAT regime, there was no such process for intra-state movements, even though some states like Uttar Pradesh and Kerala had a system of road permits to track goods movement. Bihar had a Suvidha form resembling the proposed e-way bill and hence businesses there should be able to adapt to the new mechanism, Anand Rai, director at Pigeon Express said.
Logistic service providers (LSPs) estimate that an incomplete IT system could lead to a delay of a couple of days in delivering products to customers, besides making the paperwork cumbersome and expensive. Also, at any point during the transit, inspectors from the state tax departments could intercept the trucks, they noted. Stating that concept of the e-way bill is unexceptionable, Ketan Kulkarni, head-marketing at Blue Dart said, however, for the process to be successful, everything has to work properly in the IT ecosystem, including application programming interface (API) integration where possible, the tech infra of LSPs, regulators and customers—essentially all the elements of the supply chain.
Rajat Mohan, partner, AMRG and Associates, said: “E-way bill would be a game-changer in implementation of GST; however, it is expected to put a lot of pressure on Indian logistic and e-commerce companies as the volume of consignments dealt by them are is humungous. It requires a stable tech environment to maintain seamless flow of supplies.” And the Rs 50,000 threshold doesn’t reduce the hassles either. Blue Dart’s Kulkarni said almost 100% of the firms’ consignments are above the threshold.
Even as e-tailers on their part claim to be ready to tackle all kind of situations in the new regime, they, too, are hoping that the government might give them another window. Sanjay Sethi, co-founder and CEO, ShopClues, said: “There is a chance that e-way bill may not get implemented from October 1. Nevertheless, if it does get implemented, we have designed a mechanism where instead of vendors we would be generating e-way bills on their behalf, which would be then given to the logistic firm. However, in case tax inspectors impound the truck, it could lead to delays of three-four days (in delivery of goods).”