E-way bill to be rolled out on April 1
To be adapted for inter-state movement of goods worth over~50,000
The e-way bill, a mechanism to track the movement of goods as part of the goods and services tax (GST), is set to be introduced from April 1 for inter-state carriage of products worth over ~50,000.
Originally, the e-way bill was to be introduced from February1 but was postponed due to a system crash.
The GST returns simplification process might, however, take longer as the GST Network group of ministers (GoM), headed by Bihar Deputy Chief Minister Sushil Modi, could not arrive at a consensus.
The GoM met on Saturday and unanimously agreed on the roll-out of the e-way bill. Its recommendation will be taken up by the GST Council on March 10.
The panel decided that e-way bill for intra-state goods movement could be rolled out in phases, with four or five states joining the system every week from mid-April, Modi said after the meeting.
He said the GoM expected 2.6 million e-way bills to be generated daily after the roll-out, which would later increase to 5 million. The system has made provisions for 7.5 million e-way bills.
The system had crashed when 480,000 bills were generated on February 1. The infrastructure has been upgraded and two rounds of load testing have been completed. Another round could start in the next couple of days, Modi added.
Of the 9.6 million assessees, 950,000 have moved to the pilot eway bill. Around 8,500 transporters are generating these bills and 650,000 bills are being generated daily.
“The recommendation will give the government and industry some time to adjust to the new system and ensure that load on the portal is not sudden,” said Pratik Jain, partner-indirect taxes, PwC India.
He added any problem with the system could cause widespread supply chain disruptions and it was good that the government was cautious.
A revenue slowdown had prompted the GST Council to call a meeting on December 16, where it was decided that eway bills would be introduced for inter-state movement of goods on February 1 and for intra-state carriage on June 1.
But on the day of the country-wide roll-out, the government had deferred the e-way bill indefinitely as consignments were facing delays. The portal had stopped functioning from around noon, causing widespread confusion and hassle.
“The e-way bill mechanism has certain gaps, which we hope will be addressed immediately. Issues with multimodal transport of goods and assignment of e-way bills between transporters must also be looked into,” said ClearTax Founder and CEO Archit Gupta.
Of the 9.6 million assessees, 950,000 have moved to the pilot e-way bill. Around 8,500 transporters are generating these bills and 650,000 bills are being generated daily
“The government should increase the threshold value of goods from ~50,000 to ~500,000 in the first phase. In the next phase, the e-way bill can be implemented for goods worth ~200,000, while in the third phase, the threshold can come down to ~50, 000,” said Sudhir Singh, managing director, Marg ERP.
The GoM could not reach a consensus on simplification of GST returns as there were various options suggested by Infosys Chairman Nandan Nilekani and an officers’ committee, headed by GSTN Chairman A B Pandey.
Modi said all options would be presented to the GST Council next month.
Summary sale-purchase returns (GSTR 3B), an initial mechanism under the GST that will expire by this month-end, would continue, he added.
Modi said there was no unanimity on simplification of returns. But there was broad agreement that forms should be simplified and credit matching should be introduced. The GoM also agreed that only one return a month should be filed against three at present.
Modi added more deliberations were required on this matter.
The GST Council had earlier postponed filing of input and detailed input-output returns (GSTR2 and GSTR3) till the returns were simplified.
Sources said the officers’ committee suggested several options to the GoM. Nilekani suggested a mechanism that involved the seller uploading invoices and the buyer acknowledging them. Based on this, the buyer would receive credit for tax paid on inputs. No credit would be paid for ‘missing invoices’.
The other option is to provide provisional credit to buyers in case an invoice is not uploaded by a seller. However, if a seller disputes the transaction, the credit to the buyer will have to be reversed.
M S Mani, senior director, Deloitte India, said since more deliberations were required, this indicated there was an attempt to retain the fundamental features, such as invoice matching and input tax credit tracking, while making the returns filing process easier for taxpayers.
“The invoice matching system and input tax credit reconciliation should not be sacrificed at the altar of simplification, hence more deliberations to arrive at an optimal solution may be required,” he added.
The GoM could not reach a consensus on simplification of GST returns as there were various options suggested by Infosys Chairman Nandan Nilekani and an officers’ committee