The e-way bill system in the coming time would be enabled to calculate the distance for movement of goods bases the postal PIN codes of the source and destination locations but, there would be a 10% variation allowed. The country is witnessing the several changes which are likely to be done in the e-way bill system, viz, the e-way bill system would now automatically calculate the distance for movement of goods also it would keep a check over businesses and would prevent them from generating multiple e-way bills based on one invoice. This step has been taken to keep a check over the tax evasion which has been the best practice of the Council ever since the inception and implementation of the GST system in the Country.
Plans are there that the e-way bill system would be enabled to auto calculate the distance of movement of goods keeping the PIN codes of the source and destination locations as the base for calculation. While a variation of only 10% would be allowed.
Explaining with the help of an example,
Suppose the system has displayed the distance between the two places A and B based on their PIN Codes as 655 km, then the actual distance which the user is able to enter is up to 720 KM (655KMs + 65KM) which is according to the new conditions.
The tax experts declare that tax evasion has always been and is now also the major concern matter for the government and the government is focussed to be solving this issue and fill the gap with the help of technology.
“The recent changes are another example of how the government is relying more on technology to ensure compliances – case in point being an auto-population of the actual distance between supplier and recipient based on PIN codes and automatic blocking of inter-state transaction for small composition dealers,” said Harpreet Singh, partner, indirect taxes, KPMG.
The other significant change which is being brought to the e-way bill system is that it would be barring the generation of the e-way bill for interstate movement done by a taxpayer who has opted for the composition scheme. This is a step which would check the loophole prevailing in the system as according to the GST Act does not allow for an Inter-state transaction by a composition taxpayer.
“With some of these changes such as automatic calculation of the distance between two locations via PIN codes and one e-way bill for one invoice, coupled with a greater focus on RFID-enabled vehicles, tracking the consignments might be easier for the government,” said Pratik Jain, national leader, indirect taxes, PwC.
However, it needs to be ensured that flexibility is built in the system to take care of exceptional situations such as diversion of vehicles due to road blockage, etc., where the actual distance travelled may be more than 10% of the distance calculated by the system, said Jain.
Read Also: Check Out Latest GST Eway Bill Features Coming Soon
Bases the policy of one invoice by one party, the new rule would prevent the system from the generation of multiple e-way bills. No party either the consignor, consignee and transporter would be allowed to generate multiple e-way bills.
Hence, in this system, once an e-way bill is generated with an invoice number, none of the parties including the consignor, consignee or transporter could be able to generate the e-Way bill with the same invoice number.
Following the representations made by the transporters, the changes in the e-way bill have been made.
As we already know that an e-way bill is required to be generated for the movement of goods having a value more than Rs 50,000 across State borders. The Trucks which are found without the e-way bills would be charged with a penalty up to Rs 10,000.
The cargo could be inspected to make sure that there is no tax evasion taking place. A penalty of 100% of the tax being evaded would be charged along with the tax itself if the tax evasion got proved and both of the vehicle and goods would be captivated. The e-way bill mechanism has now become a very important part of the GST regime which solely has been designed to fill in the gap which has been making the system handicapped since long, but after the changes which have been brought to the e-way bill mechanism, the gap and the loophole has been fixed and thus the change in the system has geared up the entire system and has made the taxation rule more reliable and evasion free.
The Government has from all time has said that the basic reason for the low GST revenue collection has been the tax evasion done through such subtle methods which have become the requirement of the time to be checked Asap. Under the influence of which the Government was prompted to take strong measures against such crime and in effect to which the changes have come into action.
Meanwhile, the Government has passed on an estimate of the GST revenue collection in the FY 2018-19 to be Rs 6.43 lakh crore. GST has brought several positive changes in the area of taxation in the Country and has been a success in replacing multiple state and central levies.
