11:04 am - Tuesday October 16, 2018

Interesting Facts on Eway Bill that one must Know

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Ever since the day of catastrophic failure which occurred on the day of roll out of eway bill there’s been lot circulating about how this is going to be addressed and when will the fully functionalized eway bill will be on roll. First let us understand the present system of eway bill which was launched on Feb 1 for us to be used to generate eway bills.

What did the Council served us on Feb 1 as Eway Bill on Eway bill portal : But before that one should be clear in mind that it was not the design of eway bill which was a total let out and cause for catastrophic failure which the nation witnessed on Feb 1, the real reason behind the failure was the execution of acceptance at the portal to take such huge load at one shot. To understand this better let us first talk about the most debated topic surrounding gst e waybill i.e., eway bill portal cannot generate large number of invoices when so many people try to interact with it. The facts here are really shocking to our dismay.

  Figures (in Numbers)
  • Total number of eway bills that an eway bill portal is eligible to deliver on an any given day
40 lacs Invoices
  • Less : The estimated number of eway bills that would be generated every day once the electronic invoices are rolled out for intrastate transport of goods from June
30 lacs Invoices
  • Less : The estimated number of eway bills for generation of eway bills for interstate movement of goods
  7 lacs Invoices
The estimated Eway bill capacity still left after generation of eway bills for inter and intra-State movement of goods 3 lacs Invoices

Fact No. 1 : The eway bill system for generation of eway bills for movement of Intra State movement of goods has been put on trail basis till June 1 and there’s no compulsion for generation of eway bill for the same. Meaning the eway bill which was rolled out for inter-state movement of goods already had the advantage of 30,lacs of free capacity or we can tell that it was not working at its full load. Though one can argue that the eway bill generation for movement of goods was holded back and it was open for free trials still we cannot say that the trail bills when added up with the eway bills generated on Feb 1 could have possibly crashed the eway bill portal. So saying that the eway bill portal is not carefully designed to take heavy loads would be wrong going by the above facts and it would be totally wrong to blame the government or any of its committee which is behind this make over of Eway bill portal and design.

But before moving forward with our discussion let us have a brief knowledge about Eway bills and its mechanism. E-way bill means an electronic way bill and it is meant for movement of goods. It has to be generated on the GSTN. A ‘movement’ of goods of more than Rs 50,000 in value cannot be made by a registered person without an e-way bill. On generation of e-way bill, the parties to a supply (viz, Supplier, recipient, and the transporter will be allotted a unique e-way bill number (EBN) without which movement of goods cannot be carried out in the GST regime. Earlier also in previous taxation laws we had something related to e way bill now but it was a nightmare for suppliers then because movement of goods couldn’t take place without obtaining these ‘waybills’ from VAT authorities. A waybill is a physical document that allows movement of goods. The compliance around waybills caused restricted movement of goods across states. But Post GST these way bills have been replaced with e-way bills which aims at mitigating the problems caused by waybill compliances.

Let us know with this knowledge gained move forward and locate whether the failure which occurred on Feb 1 is really a catastrophic failure or an temporary one by reading the next fact we have for you.

Fact No. 2 : Between Jan. 17 to Jan. 29, around 24.97 lakhs invoices were generated by states and union territories, except the Andaman and Nicobar Islands and Lakshadweep when eway bill was still operating under trail mechanism i.e., till before 1st of February. On an average 2 lakhs invoices were generated in the time frame of 13 days without any possibility of crashing or heavy loading on the eway bill portal. It would be wrong to say that the eway bill site was not tested to fit and fine roll out. As these facts do not support the view which has been in circulation after the failure.

Fact No. 3 : Almost all states have now participated in the e-way bills pilot except Andaman and Nicobar Islands and Lakshadweep. On Jan. 23, about 2.06 lakh invoices were generated on the portal. This shows good growth if we compare it with the experience in Karnataka, where the e-way bills were implemented first from Jan 17–23, and around 12.50 lakh e-way bills were generated and issued just from Karnataka alone. And on a total about 24.97 lakh e-way bills were generated across all states from Jan. 17–29. To recall the estimate of average number of e-way invoices to be generated is 6-7 lakh a day based on the experience in Karnataka. Once such bills are generated for intra-state transactions, the estimate of average bills generated is about 30 lakh a day. This is what Eway bill promised us to be and it’s pretty much up to the target. So now we can tell it with a clarity that failure that caused on Feb 1 was not an catastrophic failure it could be a temporary glitch in the system which the NIC team is working on in close guidance of Eway bill GST Team. And we can expect that Eway bill will be soon hitting the roads with positive outlook and magnificent approach.

Fact No. 4 : Do the eway bill portal and GSTN are integrated in any way. Though the e-way bill portal and GSTN are two different systems having separate servers and data centers, there is always an exchange of information between the two. How let us know these facts then

  • Any registered taxpayer who wants to generate an e-way bill needs to give his GSTIN in the first place
  • And here the eway bill portal pulls up every possible data required by it from the GSTN
  • So now it also becomes important for the taxpayers GSTIN status to be active and not in provisional or cancelled state as it would bar him from generating eway bill on the eway bill portal, and also the
  • value declared in an e-way bill be cross-checked with the return. As the taxpayers Part A of Eway bill return will be pulled over by GSTN for its GSTR 1 filing purpose and for a recipient for GSTR, 2 filing purpose or it would act as an second level of data reconciliation between eway bills and GSTN returns.
  • The moment an e-way bill is generated, the invoice level data can go to GSTR-1 automatically with a click if the taxpayer provides three additional items—taxable value, tax rate and tax amount. That does not need to be mentioned for e-way bill, but if you mention that, you can automatically populate GSTR-1. This will save the effort of uploading the same information in GSTR-1.

 

So it is rightful to say that eway bill portal and GSTN are integrated each having different server’s and separate traffic but yet traveling on a parallel lane to meet one common objective to curb the tax evasions that are occurring since the enrollment of GST tax structure.

 

General issues which people tend to associate with when something new is imposed on them : Whenever the GST bench introduced a new functionality in the GSTN, people generally faced two kinds of issues—one is lack of awareness  and the other is a lacuna or bug in the software, this has been a trend from day one of GST enrollment. On the part of bugs prevalent in the software’s we all have witnessed how the government is trying to set right the things by changing software features or even APIs for the case. So, no problem from July 1 persists today. In fact, no fault persists for more than four to five days.

 

 

 

On Jan. 20, the last day for filing returns for December, we might have noticed that the systems went down owing to a new functionality introduced into GSTN which interacted with returns and also filing of returns stood to a stand still position on that given day, but the option for payments was working. Therefore, the deadline was extended by two days. All this tells that the technical glitches are just part and parcel of system e way bill generation process but the most worrying factor is the absence of knowledge among taxpayers on an whole which has been an reason for downslide popularity of GST Taxation structure. Which could be over comes by open heartedly welcoming the new law and really trying to understand its facets and importance in right way.

 

The Eway bill will bring in huge reformation in taxation history which I believe it to be. As it is a no way out for tax evaders and a perfect system which would be working only on principles of transparency curbing all tax evasion practices. This will pave way for new startups and businesses to work in an organised business environment that GST tends to offer. Only those business houses which are GST compliant will find buyers for its products as a taxpayer will be rated based on GST Compliances and these will be available in public domain on GSTN network for viewing. Eway bill is going to reduce lot of efforts for an taxpayer which eventually would  benefit the taxpayer in other walks of GST such as returns.

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