MARCH 14, 2018

By Vijay Kumar

The CGST Rules as on 1.7.2017, contained a provision:

138. E-way rule.- 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.

On 30th August 2017 by Notification No. 27/2017-Central Tax , the Government substituted the above Rule 138 with a detailed and exhaustive rule with a few more rules added to launch the great e-way on the highways of India. These new rules were to come into force on a date to be notified. By Notification No. 74/2017-Central Tax , dated 29.12.2017, the Government notified the 1st day of February, 2018, as the date from which the new provisions would come into force.

What happened on 1 st February is well known, with all the embarrassing details. So, on 02.02.2018, they issued Notification No.11/2018-Central Tax , which rescinded the above Notification No. 74/2017, thus putting an indefinite break to the wayward e-waybill.

Now by Notification No.12/2018-Central Tax, dated 07.03.2018, they have amended the CGST Rules to substitute the Rule 138 again with a set of new Rules. These rules are to come into effect from a date to be notified.

In the meeting held on 10thMarch, 2018, the GST Council has recommended the introduction of e-way bill for inter-State movement of goods across the country from 1st April 2018. For intra-State movement of goods, e-way bill system will be introduced w.e.f. a date to be announced in a phased manner but not later than 01st June, 2018.

The Government explained the salient features of the improvements now brought in over the past set of rules to which life was never breathed in. The new rules are an exercise in improving the ease of driving goods through the roads with the help of the all-important way-bill. Here are the improvements:

- E-way bill is required to be generated only where the value of the consignment exceeds Rs. 50000/-. For smaller value consignments, no e-way bill is required.

- Immediately, there is no requirement to generate e-way bill where an individual consignment value is less than Rs. 50,000/-, even if the transporter is carrying goods of more than Rs. 50,000/- in a single conveyance. (this will come later)

- Value of exempted goods has been excluded from value of the consignment, for the purpose of e-way bill generation.

- Public conveyance has also been included as a mode of transport and the responsibility of generating e-way bill in case of movement of goods by public transport would be that of the consignor or consignee.

- Railways has been exempted from generation and carrying of e-way bill with the condition that without the production of e-way bill, railways will not deliver the goods to the recipient. But railways are required to carry invoice or delivery challan etc.

- Time period for the recipient to communicate his acceptance or rejection of the consignment would be the validity period of the concerned e-way bill or 72 hours, whichever is earlier .

- In case of movement of goods on account of job-work, the registered job worker can also generate e-way bill.

- Consignor can authorize the transporter, courier agency and e-commerce operator to fill PART-A of e-way bill on his behalf.

- Movement of goods from the place of consignor to the place of transporter up to a distance of 50 Km [increased from 10 km] does not require filling of PART-B of e-way bill.They have to generate PART-A of e-way bill.

- Extra validity period has been provided for Over Dimensional Cargo (ODC).

- If the goods cannot be transported within the validity period of the e-way bill, the transporter may extend the validity period in case of transhipment or in case of circumstances of an exceptional nature.

- Validity of one day will expire at midnight of the day immediately following the date of generation of e-way bill.

- Once verified by any tax officer, the same conveyance will not be subject to a second check in any State or Union territory, unless and until, specific information for the same is received.

- In case of movement of goods by railways, airways and waterways, the e-way bill can be generated even after commencement of movement of goods.

So, it's all simple and easy eway. Let's wait and see. But remember this is the third ‘Rule 138' we are seeing in the last nine months and the rule is yet to come into force. Pre-conception trauma? Every truck driver is expected to know these rules and their amendments, each made to make his life simpler and his truck faster.

The Railways are exempted from carrying the way-bills, but there is a big responsibility cast on them. Proviso to Rule 138 (2A) states

Provided that where the goods are transported by railways, the railways shall not deliver the goods unless the e-way bill required under these rules is produced at the time of delivery.

In the Service Tax regime, the Indian Railways were not exactly very fond of following the Finance Ministry's directions. This Rule requires the Railways to not deliver the goods unless the e-way bill is produced. Every clerk in the Railway parcel office is expected to know this rule and insisting on ‘producing' the way-bill by every consignee. He should also know how it is produced . Should he keep a copy with him and produce it for verification by the Tax officers?

This way or that, e-way is the way from 1 st April.

The CGST Rules have been amended fourteen times in 2017 and twice in 2018 that is sixteen times in the short existence of less than a year and be sure all these amendments were made only to make life easier and simpler for all the concerned parties.

In the meantime, the GST Council was appraised of the fact that CBEC and GSTN have started detailed data analytics across a number of data sets available with them. The outcome of preliminary data analysis has revealed interesting insights:

1. It has emerged that there is variance between the amount of IGST & Compensation Cess paid by importers at Customs ports and input tax credit of the same claimed in GSTR-3B.

2. There are major data gaps between self-declared liability in FORM GSTR-1 and FORM GSTR-3B.

Surely this information will be further analysed and action initiated.

Maybe this is what the Chief Economic Advisor meant when he wrote in the Economic Survey 2017-18:

The GST has been widely heralded for many things, especially its potential to create one Indian market, expand the tax base, and foster cooperative federalism. Yet almost unnoticed is its one enormous benefit: it will create a vast repository of information, which will enlarge and surely alter our understanding of India's economy.

Some of his findings:

- There has been a large increase in the number of indirect taxpayers; many have voluntarily chosen to be part of the GST, especially small enterprises that buy from large enterprises and want to avail themselves of input tax credits;

- The distribution of the GST base among the states is closely linked to their Gross State Domestic Product (GSDP), allaying fears of major producing that the shift to the new system would undermine their tax collections;

- New data on the international exports of states suggests a strong correlation between export performance and states' standard of living;

- India's exports are unusual in that the largest firms account for a much smaller share than in other comparable countries;

- In the run-up to the GST, there was anxiety amongst the manufacturing states that the switch to a destination and consumption-based tax would transfer the tax base toward consuming states. Has this happened? ………. the biggest tax bases still seem to be in the biggest producing states.

- A whole new world has indeed opened up to followers of the Indian economy, and much exciting new research lies ahead.

GST has its bright spots – do look for them.