How e-way bill will take GST on the digital highway

E-way bill system will play a pivotal role in making GST an effective weapon and strengthening its positive impact on the Indian economy. “One Nation, One Tax, One Market” seems well in reach for India now.

When GST was launched at the stroke of midnight on July 1, 2017 in the central hall of Parliament, it was surrounded by chaos and confusion. Moreover, everyone was uncertain whether GST would prove to be a cornerstone in strengthening “ease of doing business” in India.

However, keeping all uncertainties and chaos aside, GST has successfully entered the second year of implementation. Leniencies and relaxations have helped the taxpayers in getting accustomed to the GST provisions.

After fixing the technical glitches and making people aware of the laws and rules, the government rolled out the e-way bill system starting on April 1, 2018, for interstate transactions. Thereafter, from June 1, 2018, taxpayers were required to issue the e-way bill for intrastate supplies as well.

E-way bill system has started showing positive impact as the GST revenue (Central and state combined) has risen to ₹ 96,483 crores in July’18 as compared to ₹ 95,610 crores in June’18.

The government introduced the e-way bill system as a masterstroke to curb tax evasion and bring more transparency to the reporting system.

Under the e-way bill system, the e-way bill has to be issued for any movement of goods over Rs 50,000. Furthermore, before sending goods to job-worker (even if the value is less than Rs. 50,000), the e-way bill has to be issued. The transporter has to carry EBN (e-Way bill number) and the invoice copy during the transportation of goods.

While filing the GST return, taxpayers were under-reporting the sales and evading the taxes. Since the e-way bill is compulsory on the movement (NOT just supply) of goods, the government can keep track of all the transactions where the goods moved, but the taxpayers didn’t report it in the GST return.

With the e-way bill system running at full capacity, GST regime is all set to travel at the maximum speed on a bright and broad digital highway.

The government has plugged in the necessary checks at various places to match the data between e-way bills, and the GST returns filed by the taxpayers (GSTR 1 and GSTR 3B) every month/ quarter.

Since the taxpayers have to fill the e-way bills electronically and download a copy to give it to the transporter, the whole process will be faster and error-free.

One of the significant drawbacks of VAT and service tax regime was the involvement of tax inspectors in the physical investigation of goods and vehicles. The vehicles would be stopped at checkpoints during the movement, for inspection, which would increase the delivery time and overall cost of production for the companies.

Under GST regime, government has promised minimum physical intervention ensuring seamless movement of goods across the country. This means the vehicles wouldn’t be stopped at the checkpoints or in transit for checking the goods or documents.

E-way bill system will play a pivotal role in making GST an effective weapon and strengthening its positive impact on the Indian economy. “One Nation, One Tax, One Market” seems well in reach for India now.

Harshad Shinde is a Product Manager for Avalara India GST at Avalara Technologies Private Limited. 

Source : Qrius.com, Dailyhunt.in, ETCFO