Goods Moved Within Cities May be Exempted From E-Way Bills

If the govt makes e-way bills mandatory for neighbourhood shops, it will be an unnecessary harassment, says GSTN CEO

States may exempt a certain category of businesses from e-way bills for moving goods within cities to avoid harassment and inconvenience to taxpayers.

(Photo courtesy: whatsupme.com)

States may exempt a certain category of businesses from e-way bills for moving goods within cities to avoid harassment and inconvenience to taxpayers.

“Rules say an e-way bill needs to be generated for movement of goods over a distance of 10 kilometres. For example, movement in cities like Delhi from one area to another would require such bills,” Prakash Kumar, chief executive of GST Network, told BloombergQuint in an interview.

That would be an unnecessary harassment, so the law allows state governments to exempt certain areas in cities.

Prakash Kumar

The GST Council decided to introduce e-way bills — electronic invoices — two months earlier than planned from 1 February, for moving goods worth Rs 50,000 and above between states to improve compliance and curb evasion. States have time till 1 June to roll out the bills for intra-state movement of goods.

If the government makes e-way bills mandatory for neighbourhood shops, it will be an unnecessary harassment.

State governments, after deliberations, can decide to exempt areas or increase the minimum value of goods from the Rs 50,000 that needs e-way bills.

Prakash Kumar

Two Lakh Bills a Day During Pilot

All states and union territories, except the Andaman and Nicobar Islands and Lakshadweep, implemented e-way bills on a trial basis, and about 12.50 lakh such bills were generated from 17-23 January, Kumar said. About 2.06 lakh e-way bills were generated on 23 January, he said.

Kumar estimates 30 lakh such bills will be generated every day once it is rolled out for goods transported within states. Can the e-way bill portal managed by National Informatics Centre handle such load? Kumar said the system has been designed to handle 40 lakh invoices a day.

Here are edited excerpts from the interview:

How many states have participated in the e-way bills pilot?

Except the Andaman and Nicobar Islands and Lakshadweep, all states have rolled out e-way bills on a trial basis. On 23 January, about 2.06 lakh such invoices were generated on the portal. This shows good growth if we compare it with the experience in Karnataka, where the e-way bills were implemented first. From 17-23 January, about 12.50 lakh e-way bills were issued across all states. Our estimate of average number of e-way invoices to be generated is six-seven lakh per day, based on the experience in Karnataka. Once such bills are generated for intra-state transactions, estimate of average bills generated is about 30 lakhs a day.The e-way bill portal and GSTN are two different systems, they have separate servers and data centres. But there is an exchange of information between the two. Any registered taxpayer who wants to generate an e-way bill needs to give his GSTIN, and the portal pulls up the data from GSTN. For generating e-way bill through GSTIN, a taxpayer needs to be active, his registration should not be provisional or cancelled. Those who are not registered under the GST need to provide some basic details like name, address, mobile number, email-Id and PAN.

Is there an integration between the e-way portal and GSTN?

No, the servers are different and traffic in any one of the two will not slow down the other. But, GSTN will use data of e-way bill portal for cross-matching. We will check what the taxpayer is sending to his buyers in consignment, as we will know the value of the shipment. We will compile that and check with the taxpayer’s returns. This will be the second level of data reconciliation.The moment e-way bill is generated and as invoice details need to be given, the entry would go to GSTR-1 automatically with a click — we have given a provision for that. There are three additional items that one has to give — taxable value, tax rate and tax amount. That does not need to be mentioned for e-way bill, but if you mention that, you can automatically populate GSTR-1. If a taxpayer generates an e-way bill for goods worth Rs 1 crore, and files sales of only Rs 80 lakh, this discrepancy will be known to tax officials. Our job is to collect data and highlight the discrepancy.

How well is the system equipped for to take the load of about 12 lakh e-way bills a day?

We have designed the system to generate 40 lakh bills a day, because we had to keep invoices for intra-state supplies in mind as well. So, we don’t expect any challenges on that front.

Some states would make e-way bills mandatory for intra-state movement of goods from March and April, when they think they and their taxpayers are ready. There are some challenges in making e-way bills mandatory for transporting goods within the states. The rules say an e-way bill needs to be generated for moving goods over a distance of 10 kilometres. For example, transporting goods in cities like Delhi from one area to another would require such bills. This would be unnecessary harassment, so law allows state governments to exempt certain areas in cities.

If we make e-way bills mandatory for neighbourhood shops, it will be an unnecessary harassment, so law allows governments to exempt certain areas. States can decide to exempt areas or increase the minimum value of goods from Rs 50,000 for e-way bills.

To ensure consumers don’t face difficulties while buying goods and getting them delivered, state governments will have to issue notifications for exemption.

What are the problems that taxpayers are facing even after six months of the GST rollout? What’s GSTN doing to tackle these problems?

When we introduce a new functionality in the GSTN, people face two kinds of issues—one is lack of awareness among taxpayers, and the other is a lacuna or bug in the software. We keep on removing those bugs, and we have added new features to the software. So, no problem from 1 July persists today. In fact, no fault persists for more than four to five days. On 20 January, the last day for filing returns for December, the system went down as we had introduced a new functionality which interacted with returns. Filing of returns stopped, but the option for payments was working. Therefore, the deadline was extended by two days. The number of complaints we were getting in July has dropped to almost nothing. Earlier, my inbox used to be full with about 200-300 emailed complaints from taxpayers in a day. The helpdesk got about 7,000-8,000 emails a day. The system has stabilised now. About 5.5 crore returns have been filed on the GSTN so far.

What were the findings of Sushil Modi-led panel to tackle difficulties faced by taxpayers on GSTN?

The Group of Ministers identified 48 items in the beginning. These are functionalities, and we have already covered 93 percent of that and shown it to them. Now, we are concentrating more on e-way bills and further improvement of the user interface. The group of ministers will meet once in two months to monitor the improvements and new functionalities. The committee tasked with simplifying GST returns will work under the guidance of Bihar Deputy Chief Minister Sushil Modi.

What changes would the GSTN require if we move towards a single-return regime from 2019?

It’s difficult to say how long it will take in the system since we currently don’t know what changes need to be made. All of us, GST Suvidha Providers, accounting software companies, GSTN are on tenterhooks, and eagerly waiting for the changes approved by the council in returns so that we have time to incorporate them.

What was Nandan Nilekani’s idea to simplify returns?

He pointed out a pertinent thing that there is a business relationship between the buyer and the seller — the buyer makes the payment for goods to the seller once he checks everything. Why not put this into place rather than imposing anything new? There is already an existing mechanism for how you will pay and what you will pay, just make use of that. Whatever the supplier has uploaded in his return, the buyer will get input credit for that. Since we will allow daily filing of return, the buyer will be able to check what the supplier has uploaded, and ask the supplier to correct the inconsistencies.

This article has been published in an arrangement with The Bloomberg Quint.