Mov­ing the right ‘way’ with e-way­bill

Vi­jay Kumar, Chief Op­er­at­ing Of­fi­cer, Ex­press In­dus­try Coun­cil of In­dia (EICI), talks about the key im­ped­i­ments of e-way­bill for the ex­press de­liv­ery ser­vice sec­tor.

Cargo Talk - - Guest Column - (The views ex­pressed are solely of the author. The pub­li­ca­tion may or may not sub­scribe to the same.)

The ex­press de­liv­ery in­dus­try is very op­ti­mistic that with roll out of Goods and Ser­vices Tax (GST), the over­all cy­cle time would re­duce and the con­sid­er­able lo­gis­tics costs in the In­dian econ­omy would come down. How­ever, the trans­porta­tion in­dus­try and ex­press in­dus­try and its users in par­tic­u­lar are very con­cerned on the gov­ern­ment’s proposal mooted for move­ment of goods with re­quire­ment of e-way­bills. This would po­ten­tially negate the sav­ings hoped for, and in fact would lead to in­crease in lo­gis­tics costs and de­lays. At a time when In­dia’s Lo­gis­tics Per­for­mance In­dex (LPI) rank­ing has started look­ing up, it im­proved 19 places in 2016, the in­tro­duc­tion of e-way­bill as pro­posed has po­ten­tial to se­ri­ously erode our LPI rank­ings.

Re­in­force­ments

Users of ex­press de­liv­ery ser­vices would face con­sid­er­able dis­rup­tions to their busi­ness in the way e-way­bill is be­ing in­tro­duced. The Ex­press De­liv­ery Ser­vices (EDS) of­fers door-to-door, time def­i­nite ser­vices. EDS mainly carry large num­ber of small pack­ages from var­ied in­dus­tries like elec­tron­ics, auto com­po­nents, tex­tiles and gar­ments, hand­i­crafts, ur­gently needed air­craft parts, med­i­cal equip­ment as well as mi­cro ex­porters in the B2C seg­ment. Speed is the dif­fer­en­tia­tor in com­par­i­son to other modes of trans­port and de­liv­ery time is gen­er­ally mea­sured in hours in­stead of days. The very na­ture of op­er­a­tions us­ing the hub and spoke model en­tails mul­ti­ple tran­ship­ments as well as mul­ti­ple modes of trans­porta­tion in­clud­ing air, road and rail.

The e-way­bill pro­posed by the gov­ern­ment en­tails that the trans­porter logs into the GST net­work and gen­er­ate an e-way­bill for pro­vid­ing ve­hi­cle num­ber right from the time your ship­ment is picked up and then con­tinue to gen­er­ate e-way­bills each time a ve­hi­cle is changed un­til the ship­ments are de­liv­ered to your con­signee. On av­er­age nearly three crore ship­ments are han­dled daily by the ex­press de­liv­ery in­dus­try alone. And a typ­i­cal de­liv­ery cy­cle would en­tail that the ship­ments are on av­er­age tran­shipped three to four times. Each time a ship­ment is tran­shipped to a dif­fer­ent ve­hi­cle, the trans­porter will have to log into the GST net­work and gen­er­ate e-way­bills. This would mean over nine crore en­tries in a day, which would trans­late to about 3300 crore en­tries in a year, to be done by the ex­press in­dus­try alone. And if all seg­ments of trans­porters are taken into ac­count it would mean bil­lions of en­tries in the GST net­work will en­sure ve­hi­cle num­bers are cap­tured.

Added to this is the pro­viso to re­strict va­lid­ity of the e-way­bills gen­er­ated based on dis­tance.

The way ahead

Mas­sive obli­ga­tions be­fore con­veyance of goods is sup­posed to be ful­filled by ex­press com­pa­nies which is prac­ti­cally im­pos­si­ble for them to do. This will lead to huge costs and de­lays in the global sup­ply chains, mak­ing In­dia in­ef­fi­cient in trans­ac­tion costs for in­ter­na­tional trade and lower its lo­gis­tics com­pet­i­tive­ness rank­ing.

Cur­rently, a few states in the coun­try re­quire an e-way­bill to be gen­er­ated while cross­ing state bor­ders. How­ever, th­ese are not gen­er­ated as soon as ship­ments are picked up. They are gen­er­ated for cross bor­der move­ments while cross­ing from one state to an­other and is nowhere on a scale to what is pro­posed. The com­plex­ity and dis­rup­tive na­ture of the pro­posed e-way­bill arises due to re­quire­ment of ve­hi­cle num­bers to be filed mul­ti­ple times, from first mile un­til the last mile.

In­stead of e-way­bill it would have been bet­ter for the gov­ern­ment to have re­quired the goods con­sign­ment note (also known as Air­way bill or Lorry re­ceipt) is filed in the GST net­work. The con­sign­ment notes are unique in iden­tity and are tracked by the EDS provider end-to-end un­til the ship­ments are de­liv­ered. This will also negate the need for any va­lid­ity based on dis­tance since the tax au­thor­i­ties will know sta­tus of ship­ment in each leg.

In­stead of cre­at­ing a sys­tem which would sub­stan­tially de­lay de­liv­ery of ship­ments and thereby de­stroy value in the sys­tem as well as push up our lo­gis­tics costs and in­ef­fi­cien­cies, it would be bet­ter if the GST net­work cre­ates a sys­tem which can re­alise its ob­jec­tives by risk pro­fil­ing and us­ing the ex­ist­ing track and trace sys­tems of the trans­porters.

The e-way­bill pro­posed by the gov­ern­ment en­tails that the trans­porter logs into the GST net­work and gen­er­ate an e-way­bill

Vi­jay Kumar Chief Op­er­at­ing Of­fi­cer, Ex­press In­dus­try Coun­cil of In­dia (EICI)

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