Electronic Way Bill or E-Way is a new milestone in the country ever the since GST regime unfolded to unify direct taxes. The E-Way bill system is said to be made compulsory in all states starting from February 1 of this year. After being implemented and tested in almost 10 states, the government has given the E-Way a green signal throughout the nation to allow traders to monitor and track online the movement of goods and consignment.
What is an E-Way Bill?
It is an electronically generated document that has replaced the Way bill under the previous VAT regime for the movement of goods. The new E-Way bill will be generated from E-Way bill portal and is required for the transport of goods worth over Rs 50, 000 from one place to another. The bill should be compulsorily generated by the supplier, recipient and transporter for the physical movement of goods within or outside a state (for distances exceeding 10 kms) for sales or trading, returns and transfer purposes.
Each time the bill is generated, a unique E-Way bill code or EBN number is allocated to the individuals involved in the movement of goods. Another important feature of the E-Way bill system is that the bill can be generated or even cancelled through simple SMS.
The system of E-Way bills eliminates the need for transit passes for each state and will enable tax authorities to closely inspect the bills anytime to control tax evasion.
Also, the validity limit of the bill is purely based on the distance travelled for the movement of good (for less 100 kms or additional kms). The date and time of E-Way bill generation is also taken into consideration while calculating its validity period.
Documents Needed for E-Way Bill Generation
All invoice receipts, bills and Challan related to the movement of goods, the transporters’ ID and vehicle document are needed in case the goods are transported via road. If the goods are transported by air, rail or ship, then the transporter’s ID, document number and date on the document should be submitted in order to generate E-Way bills.
The discussions related to approval of E-Way bill were held last year, around August 5 by the GST committee and was announced on August 30. However, the panel reportedly did not make solid confirmations about the date of implementing the E-Way bill system. Later, during November when the findings revealed that the projected monthly GST incomes was at Rs 83,346 crores, much below the target amount of Rs 91, 000 crores, the nation reportedly requested to fix the gaping holes in the current GST regime.
The Prologue before the E-Way Bill Practice
The GST council led by the Finance Minister, Arun Jaitley approved the date, February 1 to roll out the E-Way bill system and June 1 as the deadline. Additionally, the new system has given states full freedom to choose their deadline before June 1 of this year. The GST council ran its trial in Karnataka during September 2017 and eventually in Rajasthan, Uttarakand and Kerala. The other states that also came on board were Haryana, Bihar, Maharashtra, Gujarat, Sikkim and Jharkhand.
The council also listed out 154 items for which the E-Way bill will not be applicable and it includes items like curd, fish, household LPG, Kerosene, vegetables, meat and other items for public distribution system (PDS).
What E-Way Bill has in Store for Accountants?
The advent of GST has hauled in compliance and implementation complexities for many businesses. A large proportion of businesses and tax payers took time to welcome this change. However, many are still at the state of understanding the underlying benefits and success of GST on trade and economy. The new E-Way bill system would drive accounting firms and expert to include this concept in their GST compliance, filing and reporting services to enable individuals and businesses to adapt to this new change.
At Munimji, we offer certificate courses on GST, which would help businesses and individuals seamlessly transition to new tax system.
