Bumpy ride

The e-way bill system, launched across the country last month, has certain ambiguities and practical issues that require the attention of the GST Council for its smooth operations.

Theoretically, it is true that e-way bill has reduced the cost and time of suppliers as well as transporters on account of the lifting of check-posts at state borders. But, we must not forget that the new system has increased the compliance costs in terms of infrastructure and additional staff requirements. Thus, the SMEs are feeling burdened.  

Although, the new system has significantly reduced the influence of tax officials in generating e-way bills, it has not abolished Inspector Raj completely. Practically, goods may be subjected to multiple checks in various places if they move through more than one state. The system should make some arrangements whereby multiple checks of the same goods at different places could be avoided. 

There are possibilities of misuse of certain exceptions available under the new mechanism. For instance, e-way bills are not required for the transportation of goods by a non-motorised conveyance (such as rehri, bullock cart and rickshaw). This provision could be misused while moving goods across state borders. This would encourage tax evasion. The other exception that no e-way bills would be required for the movement of goods below Rs 50,000 and below could be abused by the supplier. 

The biggest problem in front of the e-way bill system is the infrastructural issue. The Internet penetration in India is still limited. People do not have easy access. Those who have access to Internet, face the problem of poor connectivity. These issues could be challenging when transporting certain goods. Particularly, when the vehicle transporting the goods breaks down and the load is shifted to another vehicle. In want of a nationwide strong Internet network, generating a new e-way bill on the road would be difficult. These tasks would be more difficult in rural areas where Internet connectivity is either very poor or completely absent. 

Such practical issues would arise in the near future, which are expected to be addressed by the authorities. Thus, the e-way system would ensure a transparent movement of goods and definitely help in checking tax evasions.

— The writer is a Chandigarh-based chartered accountant