New e-way bill: Transporters sore with more documentation that will cut speed

Next week when the Goods and Services Tax (GST) council meets, transport operators might expect it to take a re-look at the draft electronic-way (e-way) bill rules.

The draft regulation states that for consignments worth over ₹50,000 in value, raising an e-way bill (with vehicle particulars) is mandatory before commencement of movement, inter- or intra-State.

Transferring goods from one vehicle (conveyance) to another — during the course of transit — would require raising a new bill from the online platform.

According to transporters, who spoke on conditions on anonymity, shipments move in a hub-and-spoke model, changing conveyance (at times even the mode of transport) between origin and destination.

For example, a truck originating in Delhi may carry 30 consignments to Mumbai, from where each such consignment will be bundled in different vehicles heading for 30 different destinations in Maharashtra. The choice of vehicle at the transit points is not pre-decided.

So far it was only the physical document that used to change hands. Now the transporters have to raise the e-way bills at every such interchange points. Transporters say this will reduce the speed of movement of goods.

The primary objection to the draft regulation is: It is against the stated goal of GST to reduce documentation and inspection. While documentation will increase due to e-way bill, the regulations grant enormous powers to the tax officials to detain the vehicle in case of any discrepancy.

However, such physical verifications can be done once in a State. The inspector is bound to file a complete report within 72 hours. And, the transporter can report incidents of detention over 30 minutes on the online portal.

SP Singh, Chairman of the Delhi-NCR Indirect Tax Committee of the Confederation of All India Traders (CAIT), admits to some loopholes in the draft regulation.

For example, in case of discrepancy with regard to any particular consignment, the tax officials may take custody of the material but must not detain the vehicle.

“A truck carries a number of consignments and at the instruction of the transporter. Detaining the truck for discrepancy in one consignment costs all consumers and the trucking industry,” he said.

Singh, however, describes such loopholes as “minor irritants” — arising during roll-out of a path-breaking and long-awaited reform initiative — which need to be ironed out.

He said that though the e-way bill was contradictory to the spirit of GST, States were keen on such checks in view of prevailing rampant tax evasion by suppliers in collusion with a section of transport intermediaries.

“Forty to 50 per cent of the cargo that presently moves (by road) are under-reported. Goods are transported in the name of someone but delivered to someone else and even in a different State,” he said, before adding, “Transporters are nervous that GST will impact their business model.”

Singh proposed a gradual phase out of the e-way bill requirement once the GST mechanism is duly implemented and tax avoidance is brought down to minimal.

He thinks e-way bills may be exempted for intra-city movement of goods as it is difficult to implement.

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