Indian Tax Solution
After reducing tax rates on over 200 items in the last meeting, the goods and services tax (GST) Council is set to meet again on Saturday to discuss early implementation of the electronic way bill, or e-way bill, from January amid slowing revenue collections.
If implemented, the move could be a setback to the industry, which has been seeking the e-way bill's deferment citing increased compliance burden.
The meeting, chaired by Finance Minister Arun Jaitley, will take place through video-conferencing to discuss the advancement of the e-way bill implementation from April to January to check tax evasion, officials said. Tax collections in October touched their lowest, to Rs 83,000 crore, since the roll-out of the GST on July 1.
The e-way bill is a compliance mechanism wherein by way of a digital interface the person causing the movement of goods uploads the relevant information prior to the commencement of movement of goods and generates a bill on the GST portal.
"The GST Council will meet on Saturday and discuss the implementation of the e-way bill from January onwards, as revenues seem to have come under pressure. There are reports of dealers avoiding the GST as there are no checks and barriers," said an official.
He added there were three months with the government to make up for revenue shortfall, making a case for tightening enforcement-related loopholes.
The government had attributed the decline in revenue collections to the postponement of GST features like matching of returns, e-way bill, and reverse charge mechanism.
According to sources, five states, including Karnataka, are ready with the e-way bill mechanism. The system is being developed by the National Informatics Centre (NIC), along with the GST Network (GSTN).
E-way bills will help central and state tax authorities track inter-state and intra-state movement of goods.Tax commissioners or an officer empowered by him will be authorised to intercept any conveyance to verify the e-way bill or the number in physical form for all supplies.
The Council had, in its October meeting, decided to put off the e-way bill issue for the time being. It had decided to put it in place in all states by March 31, 2018. But the e-way Bill has been notified.
Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN) shall be made available to the supplier, the recipient, and the transporter. The transporter or the person in charge of conveyance will be required to carry the invoice or bill of supply or delivery challan, and a copy of the e-way bill or the e-way bill number, either physically or mapped to a radio frequency identification device (RFID) embedded on to the conveyance.
The Council decided that 100 km would need to be covered within 24 hours, after which the permit would be cancelled. It exempted the need for the e-way bill for movement of goods up to 10 km, tax-exempted items, and supplies worth up to Rs 50,000.
The law advisory panel set up to advice changes to the GST laws and rules has recommended deferring the e-way bill till 2019.
Another official pointed out that the Saturday meeting would discuss the implementation of e-way bill in a way that minimises harassment of taxpayers. "It needs to be hassle-free and there should be no harassment. An officer cannot stop a vehicle for more than 30 minutes, and it will all be technologically driven," said the official.
The industry has been arguing that the proposed e-way bill would lead to significant documentation and logistics challenges for businesses.
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