FEBRUARY 07, 2018

By Vijay Kumar

Eh Way-Bill?

"Today E-waybill will open up highways across the nation, removing bottlenecks, facilitating free flow of goods and enhancing supply chain efficiency. It will benefit industry and transport in a big way. Let's support it and reap the benefits", exclaimed a twitter from the CBEC on 31st January 2017.

CBEC also tweeted,

Get ready for e-way bill which will come into effect from 1st February 2018 for smoother, swifter and easier inter-state movement of goods.

On February 1st, they mildly tweeted,

In view of difficulties faced by the trade in generating e-way bill due to initial technological glitches, it has been decided to extend the trial phase for generation of e-way bill, both for inter and intra state movement of goods. It'll be applicable from a date to be notified.

What is applicable from a date to be notified? Is it the trial or the real thing?

The OBJECTIVES of the e-way bill were stated to be:

- Single e-way bill for hassle-free movement of goods throughout the country.

- Eliminates the need for separate transit pass in each State to move goods.

- Shift from departmental policing Model to self-declaration Model for movement of goods.

And the benefits were campaigned to be

- Taxpayers/transporters need not visit any tax officers/checkposts for generation of e-way Bill/movement of goods across States.

- No waiting time at checkposts and faster movement of goods thereby optimum use of vehicles/resources, since there are no checkposts in GST regime.

- User-friendly e-way Bill system.

- Easy and quick generation of e-way Bill.

- Checks and balances for smooth tax administration and process simplification for easier Verification of e-way Bill by Tax Officers.

And the system crashed even before it could take off. Well! These things happen. How many rockets fell into the Arabian Sea before we could be a Space Power?

What is an e-way bill?

The Government clarified,

e-way bill is a document required to be carried by a person in charge of the conveyance carrying any consignment of goods of value exceeding fifty thousand rupees as mandated by the Government in terms of section 68 of the Goods and Services Tax Act read with rule 138 of the rules framed thereunder. It is generated from the GST Common Portal by the registered persons or transporters who cause movement of goods of consignment before commencement of such movement.

And Why is it required?

Government has an answer.

Section 68 of the Goods and Services Tax Act mandates that the Government may require the person in charge of a conveyance carrying any consignment of goods of value exceeding such amount as may be specified to carry with him such documents and such devices as may be prescribed. Rule 138 prescribes e-way bill as the document to be carried for the consignment of goods of value more than rupees fifty thousand.

For what purpose? Government solemnly states, E-way bill is a mechanism to ensure that goods being transported comply with the GST Law and is an effective tool to track movement of goods and check tax evasion. I thought taxpayers were required to comply with the Laws, but now I understand that even lifeless goods are required to comply with the laws. It was sheer ignorance on my part. After all, the concept of 'offending goods' is as old as offence and goods. You know offending goods can be arrested too. In a document published in 1929 by the US FDA, it is stated, speed of action is essential if the public is to be protected by arresting the offending goods before distribution.

How did the Government introduce the e-way bill and how did they keep it on hold for the present? Like all laws in India, it is a long and complicated story.

On 02.02.2018, they issued Notification No.11/2018-Central Tax, which stated,

In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby rescinds, except as respects things done or omitted to be done before such rescission, the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 74/2017 –Central Tax dated the 29th December, 2017, published in the Gazette of India, Extraordinary,Part II, Section 3, Sub-section (i), vide number G.S.R 1601 (E), dated the 29th December,2017 .

So, by this Notification, the Notification No. 74/2017-Central Tax, dated 29.12.2017, has been rescinded.

Pray, what is that notification?

Notification No. 74/2017-Central Tax, dated 29.12.2017, reads as,

In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby appoints the 1st day of February, 2018, as the date from which the provisions of serial numbers 2(i) and 2(ii) of notification No. 27/2017-Central Tax dated the 30th August, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 1121 (E), dated the 30th August, 2017, shall come into force .

By this Notification, certain provisions of Notification No. 27/2017-Central Tax dated the 30th August, 2017, were to come into force from 01.02.2018. And what exactly did this notification do? It actually substituted Rule 138 in the CGST Rules and added a few more rules 138A to 138D.

Rule 138 of the GST Rules originally had a provision like this:

Till such time as an E-way bill system is developed and approved by the Council, the Government may, by notification, specify the documents that the person in charge of a conveyance carrying any consignment of goods shall carry while the goods are in movement or in transit storage.

This was a warning that the e-way bill is on its way. By Notification No. 27/2017-Central Tax, the e-way bill was brought into law and it required every registered person who causes movement of goods of consignment value exceeding fifty thousand rupees to furnish information relating to the said goods in Part A of FORM GST EWB-01, electronically, on the common portal, before commencement of such movement.

And the E-WAY BILL was born!

In spite of assured drudgery, I would summarise the story.

In Rule 138 of the CGST Rules, the Government promised us the E-Way Bill. This rule was substituted to make elaborate rules for the speedy runway for the GST Road. This was to come into force from 01.02.2018 and now it is postponed indefinitely.

You think this is confusing and complicated? Every truck driver passing through that invisible check-post is expected to know all of these. Just imagine a truck driver trying to generate an e-way bill on 1 st February before he started his long trip and he gets a message that the server is busy . What could he do? He could search Twitter for any information from the GST authorities. If he was successful, he would have seen the tweet that e-waybill system is postponed. The next day he would have seen a notification stating that some other notification is rescinded and he could have gone all the way back to the original Rule 138, which gave him enough warning about the impending calamity. And how could he explain all this to an ignorant officer who would demand the e-way bill? There are cases where trucks have been detained and penalties imposed for not carrying the e-way bill even before the e-way bill was to come into force on 1 st February. In one such case a trader went to a High Court and the high Court ordered release of the goods, not the truck as the truck owner was not a petitioner.

It is sad that the e-way crashed even before it could speed through an otherwise perfect GST. I sincerely hope it comes back with all the possible bureaucratic vigour. A small accident should not deter us or cause any false hopes. Incidentally, many States had a fairly good e-way bill system running for several years and at least one State has gone back to its own e-way bill.

Are you required to have an e-way bill even if you are transporting your own goods? The other day, a writ petitioner whose goods were seized, was asked in a High Court, "what documents were you carrying?". He said, "I was transporting my own goods and I had no documents." The Court wondered if he can carry his own goods without any documents. The Government recently answered one such doubt.

Q: Whether e-way bill is required, if the goods are being purchased and moved by the consumer to his destination himself.

A: Yes. As per the rules, e-way bill is required to be carried along with the goods at the time of transportation, if the value is more than Rs. 50,000.00. Under this circumstance, the consumer can get the e-way bill generated from the taxpayer or supplier, based on the bill or invoice issued by him. Or the consumer can enrol and log in as the citizen and generate the e-way bill.

Fortunately, the Law stated that you need not have an e-waybill, if you are transporting these goods (among many others)

1. Live asses

2. Curd, Lassi

3. Semen

4. Potatoes, tomatoes, onions, cabbage, cauliflower

5. Human Blood

6. Contraceptives

7. Municipal waste (what if you live in a village?)

8. Gandhi Topi

9. Sacred Thread commonly known as yagnopavit. (Yagnopaveetham paramam pavithram)

But then that was again amended. Notification No. 3/2018-Central Tax, dated 23.01.2018 again substituted the Rule 138 with effect from 01.02.2018. But this doesn't seem to be the one put off by the Government.

Ten times more business:

Recently a Departmental Representative in the CESTAT asked a very famous advocate as to what would be the career prospects of the consultants in the GST era. The famous advocate told him that there would be ten times more cases than now. The DR is waiting for the Law to settle down and litigation to bloom, before he puts in his papers.