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Rules not ready, key e-way bill for GST may be delayed, says top official

The e-way bill has been proposed to track intra-state and inter-state movement of goods of value exceeding Rs 50,000

Written by Aanchal Magazine | New Delhi | Updated: May 26, 2017 8:52 am
gst, goods and services tax, gst tax, gst rollout, gst news, GST e-way bill, gst e-way bill delay, indian express news, business news The GSTN is awaiting finalisation of e-way bill rules by the GST Council to proceed with the infrastructure related work, including selection of an IT partner.

AS THE industry prepares for the rollout of the Goods and Services Tax (GST) from July 1, the enforcement of the crucial e-way bill mechanism is likely to be pushed back by at least six months. The delayed implementation of the e-way bill is being contemplated as the draft rules are still to be discussed in the GST Council and the requisite infrastructure is not in place yet, Goods and Services Tax Network (GSTN) chairman Navin Kumar told The Indian Express.

The e-way bill has been proposed to track intra-state and inter-state movement of goods of value exceeding Rs 50,000, with tax officials having the powers to check the bill at any point during transit to check evasion.

Until the new rules for the e-way bill come into force, possibly around December, the existing system of transit permits for inter-state transfer of goods will continue, said Kumar. “That (e-way bill) will take time. That will not happen on July 1. I think the earliest that it can happen is by December because the Council has not approved the rules yet. (When) the rules are there, only then we will start working on it,” said Kumar.

“Today, under VAT, if goods are transported from one state to another, then what happens at the border — there are checkposts, there are people who see that… many states have started the system of what they call transit permit, so at the border you have to take a transit permit and when you exit the state, you have to show it at the exit point. So, whatever system is there, that will continue, until the new system comes,” he said.

Under the draft e-way bill, which was placed in the public domain last month, every registered supplier will require a prior online registration on the GSTN portal for movement of goods valued at more than Rs 50,000. Under GST, the annual turnover threshold for registration is Rs 20 lakh (Rs 10 lakh for northeastern states).

The GSTN is awaiting finalisation of e-way bill rules by the GST Council to proceed with the infrastructure related work, including selection of an IT partner. “We have to fix up some IT company to do that. We will give them the rules, the law, and then codes will be given. For that also infrastructure is required and that will have to be connected to our main system. Because whatever data goes there, that will get into the returns of the taxpayers who are selling those goods,” he said.

The GSTN chairman said they are working on the proposal for appointing the IT company and as soon as the rules are finalised, they will start the selection process. “We are working on the proposal. We will float that. By the time people have to submit their bids, the rules should be there. We are keeping everything ready. As soon as rules are given to us, we will invite the applications,” he said.

Since the draft e-way bill rules were made public last month, many industry representatives have aired their concerns saying that it is a cumbersome process involving many levels and is an aberration in the smooth movement of goods as envisaged in the indirect tax regime. The industry is of the view that unless the complete infrastructure system is in place for enactment of e-way bill, the rules should not be enforced.

Also, the industry believes that the government should not define the timeline for movement of goods and it should be ideally left to the consignor and the consignee. As per the draft rules, the e-way bill, once generated, shall be valid for one, three, five, 10 or 15 days from the date of generation depending upon the distance for which the goods have to be transported — one day being for less than 100 km and 15 days for more than 1,000 km transit.

“E-way bill, as has been introduced, needs significant IT enablement. Once the IT infrastructure is in place, the government should roll out the e-way bill, so that there is no disruption,” said M S Mani, senior director, Indirect Tax, Deloitte Haskins & Sells.

As per draft rules, upon generation of the e-way bill on the GSTN portal, a unique e-way bill number shall be made available to the supplier, the recipient and the transporter. The transporter or person in charge of conveyance will be required to carry the invoice or bill of supply or delivery challan, and a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency Identification Device embedded on the conveyance.

The rules also empower designated tax officials to intercept any conveyance to verify the e-way bill or the e-way bill number in physical form for all inter-state and intra-state movement of goods along with physical verification of conveyance for suspected case of tax evasion. The e-way bill also brings in accountability for tax officials as a transporter may upload the information on the GSTN portal if his vehicle has been intercepted and detained for more than 30 minutes.

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  1. A
    Arun Kuthiala
    May 31, 2017 at 1:55 pm
    THe people who are to implement this GST i.e. the trade and further on the retail trade have not been briefed on the implications of the GST. Since the GST implementation will rely heavily on IT and the ability to use computers the small traders are in a fix, since retail trade comprises of people who are in un educated and even if educated to some extent are not computer savvy and will have to rely on professional help. With the average turnovers of the majority of the traders being less than forty to fifty lacs the increased burden on engaging professional and maintaining complex records and seeking input credit will make most business to close down or face penal action as the rules have been made very stringent. Before this new tax is rolled out the main players should be made conversant with the details. When large industry is saying that they are unaware of what is required how can the average trader cope with such a complex taxation. The rollout date should be carried forward .
    1. A
      May 27, 2017 at 8:09 pm
      The Govt. harping on GST. We need a fast and reliable the internet connection. Can the govt. ure us a reliable and fast internet connection.?.Here in Pondicherry the electric power goes out in almost every half an hour and comes back after maybe in one hour.The broad band connection of BSNL require electric supply of its modem.
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        May 26, 2017 at 9:07 am
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        1. A
          ashok s
          May 26, 2017 at 7:16 am
          Gst will lead to inflation , does govt has backup plan . its best to delay gst till sept .
          1. Ivan
            May 26, 2017 at 9:16 am
            What will happen is that the government will itself ease off on GST collection for a while. The people, our fellow s, will then be treated to a slew of propa a about how this has reduced inflation and put India on the highway to rapid growth. Propa a and half-truths are the hallmarks of the BJP publicity units. It will not be any different this time.