Government Takes A U-Turn From Original GST Plans; CBEC Eases E-way Bill Rules

In the midst of GST (the goods and services tax) confusion involving frequent alteration of tax rates of products, the Indian government has provided a breather by relaxing rules relating to the proposed e-way bill system. The revised rules released by the Central Board of Excise and Customs (CBEC) is aimed at making e-way bill requirements simpler on several counts and add some safety features to curb tax evasion.

The new guideline will make electronic permits required for shipping merchandise under the GST regime more acceptable to businesses and transporters.

Here is what the new ruling will bring:

• Businesses can exclude items that are exempt from GST from the value of the consignment for which an e-way bill is raised.
• Vehicle details will be required only in the case of goods movement beyond 50 Km, up from the earlier 10 Km.
• Once e-way bills are enforced for intra-state movement as well, this will help smaller businesses operating within a particular state.

In case of intra-state movement of goods by the road where the value of each consignment is less than $768 (INR 50,000) but aggregate consignment value in a vehicle is more than $768, the new rules say that no e-way bill is required. This intrastate exemption is expected to give relief to courier and ecommerce firms.

The new ruling is in contrast to the original plan according to which, e-way bills were to be made compulsory on inter-state movement first, before being made applicable to intra-state movement.

In an interaction with the media, Pratik Jain, Partner and Leader of Indirect Tax at PwC, said that “Exemption for smaller intra-state consignments and exclusion of the value of exempt supplies for e-way bills would provide relief to a large segment of the industry.”

GST – The Continuing Conundrum

The 26th GST Council meeting is set to take place on March 10 and the demands and concerns of the ecommerce players will also be tabled in the meeting.

As defined by the GST Council, an e-way bill (Form GST EWB-01) is an electronic document (available to the supplier,/recipient/or transporter) generated on the common portal against the movement of goods of consignment value of more than $768 (INR 50K).

It has two components – Part A comprising details of GSTIN of supplier and recipient, place of delivery (indicating PIN Code also), document (Tax invoice, Bill of Supply, Delivery Challan or Bill of Entry) number and date, value of goods, HSN code, and reasons for transportation; and Part B comprising transport details like transport document number (Goods Receipt Number or Railway Receipt Number or Airway Bill Number or Bill of Lading Number) and vehicle number for road.

The e-way bill system is seen as a potent tool by policy-makers to curb tax evasion.

Although powerful as it may seem, the GST rules have been subjected to frequent alterations and delays. This may be due to the fact that GST Council members are politicians and not bureaucrats.

In light of the delays and confusions shrouding the GST bill, the upcoming meeting by the GST Council has raised many expectations and it is believed that it will act upon to do away with the existing problems concerning over its implementations.