When the GST Council met for the 24th time on 16 December 2017, via video conferencing, the main item on the agenda was to notify the much-awaited e-waybill rules. The e-waybill is a powerful mechanism which can help keep a check on revenue leakage by tracking the movement and consumption of goods. Implementation of the e-waybill is also expected to reduce transportation costs and ease the movement of goods across state borders.
Pending the coming into force of the national e-waybill system, all states were authorized to continue with their own system, if any. In September 2017, the Karnataka government implemented its own e-waybill system for the movement of goods. In the October 2017 GST Council meeting, it was said that the e-waybill rules would be implemented in a staggered manner starting from 1 April 2018. However, owing to the success of the Karnataka system, transporters and traders filed a representation for a similar e-waybill to be implemented nationwide, as they were facing problems across the country for inter-state movement of goods. The e-waybill will reduce paperwork and the need for separate waybills for transit in each state. This will also eventually lead to the elimination of check posts.
In its 24th meeting, the GST Council announced various dates for implementation of the e-waybill. India’s finance minister stated that the nationwide e-waybill system would be ready to be rolled out on a trial basis by 16 January 2018 at the latest. Traders and transporters could start using this system on a voluntary basis from 16 January. “Subsequently, the rules for 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,” the minister said.
In other words, it was decided that a nationwide e-waybill system will be implemented in a staggered manner, as follows:
16 January 2018: The e-waybill would be rolled out on a trial basis and traders and transporters could use it voluntarily.
1 February 2018: To bring uniformity across the country for seamless inter-state movement of goods, rules for implementation of the nationwide e-waybill system on a compulsory basis would be notified.
1 June 2018: All states must implement the e-waybill rules for intra-state movement of goods. States are free to implement the system within the state before 1 June 2018.
Filing of e-waybills via an electronic platform will become mandatory for movement of goods worth more than ₹50,000 (US$780). This will not apply when goods are being transported for a distance of less than 10 kilometres. Any person or entity registered for goods and services tax can generate an e-waybill – including the transporter. However, the validity of e-waybills varies with the distance to be covered, i.e. up to 100 kilometres, an e-way bill is valid for one day; for 200 kilometres, it is valid for two days, and so on.
To generate an e-waybill, complete details must be uploaded on the Goods and Services Tax Network portal, after which a unique e-waybill number will be given to the supplier, transporter and recipient. If movement of goods has not been effected, the e-waybill can be cancelled within 24 hours of its generation.
In the earlier regime, only a few states had an e-waybill system, but with the introduction of GST the government has made sure that the rules and procedures for movement of goods are similar throughout the country. By releasing e-waybill rules in August 2017 and now implementing the system in a staggered manner, the government has given ample time to businesses and transporters to study the rules and train their employees accordingly.
However, there remains some ambiguity on whether an e-waybill will be required for movement of second-hand goods, capital goods, goods returning from work or a job, or scrap. Further, as an e-waybill will be required at every leg of movement, transactions such as cancellation of an order in delivery or transactions of goods return will require filing of multiple e-waybills, which will increase the compliance burden, contrary to what was promised by the government.
With its action on e-waybills, the GST Council has demonstrated that it is serious about removing obstacles in GST and moving towards a smoother implementation across the country. The e-waybill initiative is in line with the Digital India scheme. E-waybills will ease the movement of goods within India and go a long way towards making India “One Nation One Market”.
L Badri Narayanan is a partner and Asish Philip Abraham is a joint partner at Lakshmikumaran & Sridharan.
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