A mandatory electronic way bill or e-way bill system for inter-state movement of goods over Rs 50,000 in value and 10 km in distance will be rolled out from April 1, if the recommendations of the Group of Ministers (GoM) formed to monitor and resolve the IT challenges related to Goods and Services Tax (GST) are accepted by the GST Council. E-way bill for intra-state movement of goods, however, should be done in a phased manner after 8-10 days of the inter-state e-way bill rollout, taking about 4-5 states on board in a week, the panel has suggested, Bihar’s Deputy Chief Minister and the GoM’s head Sushil Kumar Modi said on Saturday.
The GoM’s discussions about simplification of GST returns, however, remained inconclusive as states’ finance ministers flagged issues related to allowing input tax credit in the proposed revamp in returns filing process through simultaneous upload of invoices. Differences emerged about credit reconciliation, whether or not provisional input tax credit should be allowed and whether or not input tax credit should be linked with tax payments under GST, Modi told reporters after the meeting.
“The GoM had detailed discussions on return simplification but could not reach a consensus. However, the unanimous decision was that return should be simplified and there should be credit matching,” Modi said. The initial summary return GSTR-3B “will continue for sometime”, he added.
The recommendations of the GoM are expected to be taken up for discussion by the GST Council in its next meeting on March 10.
Modi said the GoM would also look into returns filing timeline of small taxpayers. The Council in October had allowed small businesses with turnover upto Rs 1.5 crore to file quarterly returns.
With this, the government has moved back to its initially approved rollout date of April 1 for inter-state e-way bill system, which was later preponed to February 1, following concerns about revenue mop-up. On February 1, following technical glitches in the GST online portal for e-way bill, the government had put the e-way bill rollout on hold and decided to continue only the trial run for trade and transporters.
On concerns related to load capacity of e-way bill system, GSTN CEO Prakash Kumar said the “entire infrastructure has been upgraded”, more servers have been put and two rounds of load testing have been done.
Modi said that 26-50 lakh e-way bills are expected to be generated per day once the system gets adopted across the country. “About 6.5 lakh e-way bills are being generated every day (in the trial phase). Once it gets launched, around 26 lakh to 50 lakh e-way bills are expected to be generated every day,” Modi said. He added that two rounds of testing have been completed so far and another one round of testing is scheduled in the next few days and the load capacity will be checked for 75 lakh e-way bills a day.
More than 9.5 lakh taxpayers and 8,500 transporters are registered on the e-way bill portal, Modi said. The panel has pushed for a phased rollout of e-way bill system for intra-state movement of goods, a move aimed at preventing overloading of the system. “On inter-state movement of goods (it) will be mandatorily required to take e-way bill and after couple of weeks of rollout, intra-state movements of goods through e-way bill system will start. When this intra-state movement will start, it will be in a phased manner. So, all the states will not be taken on board at one go, in a phased manner about 4-5 states per week will be allowed to join,” Modi said.
The meeting was attended by other state finance ministers including Karnataka’s Agriculture Minister Krishna Byre Gowda, Chhattisgarh’s Commercial Tax Minister Amar Agarwal, GSTN Chairman Ajay Bhushan Pandey, GSTN CEO Prakash Kumar and officials from NIC, which is the agency responsible for building the technological system for e-way bill along with GSTN.
Tax experts said the phased launch of e-way bill will enable businesses to become ready over a period of time and will give time to the GSTN to overcome glitches during the initial phase. MS Mani, Senior Director, Deloitte India said, “The staggered rollout proposed of the intrastate e-way bill after successful launch of the same on interstate basis would provide time to both businesses and the tax authorities to be prepared and address challenges that come along the way. The
invoice matching system and the input tax credit reconciliation, which are defining elements of GST system, should not be sacrificed at the altar of return simplification- hence more deliberations to arrive at an optimal solution may be required.”