FEBRUARY 16, 2018

By Lukose Joseph, CA & Anil P Nair, CA

"They bear, in place of classic names,
Letters and numbers on their skin."

THUS wrote Rudyard Kipling on the custom of the Trade. Who knows since when and the many forms the trade might take! Some drum up early in our lane and there is another who move around in vans, selling items door to door, homes or retail shops, collects money and move on.

"Door-to-door is a canvassing technique that is generally used for sales, marketing, advertising, or campaigning, in which the person or persons walk from the door of one house to the door of another, trying to sell or advertise a product or service to the general public or gather information . People who use this sales approach are often called traveling salesmen, or the archaic name drummer, to "drum up" business. This technique is also sometimes called direct sales." [Wikipedia]

Our concern today is the fate of this folk after the introduction of Goods and Services Tax.

Door to Door Sales is a marketing technique used by distributors by which, instead of taking orders and dispatching goods, the goods would be taken to retailer's or wholesalers premises in Van or suitable vehicles. In the earlier VAT regime, there was provision for such sales and payment of tax. The procedures were quite simple, like obtaining salesman permit for van sales, maintaining a stock book which may be signed and sealed by the tax officer and goods along with their bills are issued from the van. At the end of the day, total stock sold will be recorded in stock book kept at van. Next morning again opening stock and new stock transferred from Godown will be recorded in the stock book. The Tax officer can intercept the van and verify the stock. The technique tests the marketing skills of the Salesman.

There seems to be no such provision for door-to-door sales(Van/Lane Sales) envisaged under GST. Tax authorities advise, off the record, to continue previous procedures and they are helpless otherwise. Considering the possibility of penalties and prosecutions that might confront who continue to do this sale, the experts warn about the high risk involved.

Trade honestly believed that implementation of E-way bill will solve the lacuna.

In GST, where supply involves movement of goods, location of such goods at the time at which the movement of goods terminates for delivery to the recipient is the place of supply.

For movement of goods, e-waybill is prescribed. E-waybill is generated on the GST portal. Those who require movement of goods from one place to another upload the necessary information prior to the commencement of transportation and draw an
e-waybill.

The e-way bill provisions aim to remove the ills of the erstwhile way bill system prevailing under VAT in different States, which was a major contributor to the bottlenecks at the check posts. Moreover, different States prescribed different waybill rules which made compliance difficult. The e-way bill provisions under GST bring in a uniform e-way bill rule which would be applicable throughout the country. The physical interface will make way for digital interface facilitating faster movement of goods. It is bound to improve the turnaround time of vehicles and help the logistics industry by increasing the average distances travelled, reducing the travel time as well as costs.

Rule 138 of CGST Rules, 2017 provides that, e-waybill is an electronic way bill which has to be generated by every registered person causing movement of taxable goods of consignment value exceeding Rs 50,000/-. A consolidated e-waybill can be generated where multiple consignments are intended to be transported in one conveyance.

Where a transporter is moving more than one consignment in one conveyance, he must indicate the serial number of e-waybills for each consignment electronically on the common portal. A consolidated e-waybill in Form GST EWB-02 may be generated before the movement of goods.

Thus, in the proposed e-waybill although there are many permutations and combinations of movement of goods, there is no specific provision to accommodate the so called van sales/lane sales in which neither quantity of goods nor the name of the customer is known prior to the vehicle starting from the godown.

Though no details are available while writing this article, according to informed sources, provision for Lane sales might make an appearance in e-waybill. Yet, there is no provision in the present Act or Rules.

Though scare has been raised since long, the paper tiger of e-waybill is not yet visible in our trade neighborhood.This particular sales tribe may be heard early by the GST Council and pray they be rescued from the streets of orphan hood.

When they return from run or raid.
Unheard they work, unseen they win.
That is the custom of "The Trade". - Rudyard Kipling concludes.

Let the Government not ignore the revenue from this ingenious source. Hope administrators come out with such interim measures as necessary before e-way bill is stabilized helping such distributors in vehicles to continue as in the previous tax regime.

(The views expressed are strictly personal.)