Starting February 1, 2018, all interstate movement of goods will be tracked with the introduction of the e-way bill system under the Goods and Services Tax regime, the GST Council decided at its 24th meeting on Saturday.
The nationwide e-way bill system will be rolled out on a trial basis from January 16, allowing traders and transporters to voluntarily test it out for a fortnight before it becomes compulsory. As for intra-state movement of goods, States have been given time till June 1, 2018, to implement the e-way bill system, so a fully integrated tracking system for all taxable goods can be expected only then.
The Council’s decisions at Saturday’s meeting, held via video-conference, assumes significance in the light of some State finance ministers expressing concerns about revenue shortfalls under the new indirect tax system.
Pressing intervention
After healthy collections in the first three months, tax receipts in October had dipped by about 10% compared with September. Finance Minister Arun Jaitley had said on Thursday that the introduction of the e-way bill system would help prop up revenue collections, hinting it would enable the government to track tax evasion far better. “There are future stages… GST invoice matching, e-way bills… now that’s going to really make sure that evasion becomes all the more difficult,” Mr. Jaitley had said. “The Council has already taken some decision with regard to some time frame for the e-way bills itself. That itself will help in bumping up collections somewhat,” he said at the time.
“Till such time as National e-way bill is ready, the States were authorised to continue their own separate e-way bill systems,” the government said in a statement. “However, it was represented by the trade and transporters that this is causing undue hardship in interstate movement of goods and therefore, bringing in an early all India system of e-way bill has become a necessity,” it said in the statement on the GST Council’s decision.
While the Council reviewed the readiness of hardware and software for the e-way bill regime, industry is wary that this may be a rushed exercise with just a fortnight allowed for trials though, eventually, the system is expected to speed up movement of goods countrywide.
“The mandatory roll-out from February 1 could cause difficulties for businesses, especially in many States that do not have any such requirement at present,” said MS Mani, senior director, Deloitte India. “The sudden meeting of the GST Council signifies that the issue of e-way Bills is very serious and there is a concern over potential revenue leakages in the absence of a nationwide uniform tracking platform,” Mr. Mani said.
