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Getting Ready for Transport E-way Bill

 

The Goods and Service Tax (GST) is rolled out on 1 July, 2016 (in few countries it is also known and Value Added Tax) and definitely this will create a positive as well as negative impact on various sectors. Sectors like Textiles, Auto, Engineering, Capital goods, Power Equipment, Pharmaceutical, Real Estate, Logistics and Transportation are going to have positive impact whereas service sectors like Airlines, Insurance, Telecom are going to have negative impact from the higher service tax rate of 18% v/s 15% currently. 

 

 

The need for GST has been arise because of the current indirect tax system. Various indirect taxes are levied by State and Central Government in India such as Custom Duties, Central Excise, Service Tax, VAT, Entertainment Tax, Purchase tax and many more. Thus, the GST Council has finalized a four-tier GST tax structure of 5%, 12%, 18% and 28% with lower rates for essential items and the highest rates for luxury items.

Under GST every person has to generate E-way Bill.

What is E-way Bill?

E-way bill is an electronic way bill for movement of goods which can be generated on the GSTN (common portal). A ‘movement’ of goods of more than Rs. 50,000 in value cannot be made by a registered person without an e-way bill.

The Central Board of Excise and Customs (CBEC) proposes E-way bill. Under this, moving goods of more than Rs. 50,000 under GST will require the person to first register and then generate E-way will which can be inspected by tax officials anytime during the transit to check tax evasion. E-way bill can be generated or cancelled through an SMS. When it is generated a unique E-way bill number is allocated and it is available to Supplier, Recipient and Transporter.

E-way bill should be generated in three cases:

  1. When there is movement of goods in relation to supply.
  2. For reasons other than supply.
  3. Due to inward supply from an unregistered person.

The key issue of E-way bill is that the validity of the bill will depend on the goods that were to travel.

E-way bill is to be generated by Registered Person and Transporter. Every Registered person under GST, before movement of goods needs to fill the information in Part A of Form GST INS-1 or Registered person who is consignor or consignee or recipient of goods needs to fill Part B of Form GST INS-1 and Registered person where the goods are to be handed over to Transporter needs to fill Part A and Part B of Form GST INS-1 whereas in case of Transporter before the movement of goods needs to fill Form GST INS-1 if consignor does not.

 

 

The following table shows the validity of a bill, according to kilometers travelled.

Valid For

Distance

1 Day

Less than 100 kms

3 Days

100 kms to 300 kms

5 Days

300 kms to 500 kms

10 Days

500 kms to 1000 kms

20 Days

1000 kms or more

 

The goods and services tax (GST) provision, required to be pre-registered before it can be moved, is likely to kick in from October after a centralized software platform is ready, a top official said.

According to one report in Livemint, “E-way bill would be implemented after infrastructure for smooth generation of registration and its verification through hand-held devices with tax officials is ready. The information technology platform for the e-way bill system is being developed by the National Informatics Centre (NIC) along with GST-Network (GSTN)—the company which has developed the IT backbone for the new indirect tax regime.”

“The e-way bill rules may be taken up in the next meeting of the GST Council on 5 August. After the rules are in place, the NIC and GSTN would develop an all India platform for a consolidated system,” another official said.

Currently, there are few states such as Maharashtra, Telangana, Bihar, Andhra Pradesh, Madhya Pradesh, and many more which are using E-way Bill but the GST Council has allowed these states to continue with the existing form till a central format is built.

It is expected that E-way bill will facilitate faster movement of goods since check-posts would disappear in the GST. No doubt that digitization of the documentation process will reduce the time and ensure accountability and easy verification. If it is implemented properly, it will definitely help the logistic industry to grow while making transportation of goods faster and easier.

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