An employee displays a receipt book showing a store’s goods and services tax identification number (GSTIN) in an arranged photograph in New Delhi, India. (Photographer: Anindito Mukherjee/Bloomberg)

Finance Ministry Amends E-Way Bill System To Check GST Evasion

The Finance Ministry has introduced changes in the e-way bill system, including auto calculation of distance based on Postal Index Number codes for generation of e-way bill and blocking generation of multiple bills on one invoice, as it seeks to crackdown on Goods and Service Tax evaders.

Touted as an anti-evasion tool, the electronic way or e-way bill was rolled out on April 1, 2018, for moving goods worth over Rs 50,000 from one state to another. The same for intra or within the state movement was rolled out in a phased manner from April 15.

With instances of malpractices in e-way bill generation getting detected, the revenue department decided to rework the system for generation of e-way bill by transporters and business.

The new enhanced system would come with auto-calculation of distance between the source and destination, based on PIN codes. The user would be allowed to enter the actual distance as per the movement of goods, which will be limited to 10 percent more than the auto calculated distance displayed, according to the e-way bill portal.

For example, if the system has displayed the distance between Place A and B, based on the PIN codes, as 655 km, then the user is allowed to enter the actual distance covered up to 720 km (655 km + 65 km).

Besides, the government has decided not to permit generation of multiple e-way bills based on one invoice. This means, if the e-way bill is generated once with a particular invoice number, then none of the parties— consignor, consignee or transporter — can generate another e-way bill with the same invoice number.

The enhanced feature would permit extension of validity of the e-way bill when the goods are in transit/movement.

Also read: Non-Filers Of GST Returns For 2 Months To Be Barred From Generating E-Way Bills

The e-way bill portal, which has been developed by the National Informatics Centre, the country's premier informatics services organisation, would also generate a report for users on the list of e-way bills about to expire.

This would help the user to analyse the data and ensure that the goods reach the destination within the valid time period.

Transporters of goods worth over Rs 50,000 would be required to present e-way bill during transit to a GST inspector, if asked. Failure to produce an e-way bill can attract a penalty of Rs 10,000 or amount of tax sought to be evaded, whichever is higher.

AMRG & Associates Partner Rajat Mohan said "these enhanced features would add value to both, businesses and tax officers as the mixed bag aims at propelling ease of doing business together with acting as a deterrent for tax evaders".

During April-December 2018, 3,626 cases of GST evasion/violations involving Rs 15,278 crore were detected.

Also read: GST Anti-Profiteering: Investigating Agency Wants To Widen Probe Against Patanjali