The Government has made E-Way Bills a very major document in the process of GST and compliance, over the period of time. And it has become equally essential for businesses to consider its importance for a smooth and swift run.
However, E-Way Bill and its generation come with complications like lengthy generation process, expiry and extension, etc, which can have negative impacts on the business. In such a situation, it is a necessity to have options and solutions to make the compliance easier.
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The article Covers-
- E-Way Bill – Reframing Business Transport
- E-Way Bill – Malpractices and Legal Issues
- Latest Improvements in the E-Way Bill system
- E-Way Bill compliance – Save Trouble and Money
- Complications in E-Way Bills and its 1 Click Solution
E-Way Bill- Reframing Business Transport
Provided in Rule 138 of the CGST Rules, 2017, the E-way Bill is a document mandated to be carried by the carrier of the consignments of goods, inter or intra state, having Invoice worth Rs 50,000 or more. Certain goods are exempted from this rule like fuel, precious stones/metals, currency, etc. (As mentioned in List of Exempted Goods)
Primarily the e-Way Bill needs to be generated by the Consignor (The supplier) of the goods. If not possible by the Consignor, or if the Consignor is not registered on GST System, the Consignee(The buyer) or the Transporter can also generate an e-Way Bill (Must be registered).
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Not having an e-Way Bill leads to a penalty of at least Rs 10,000 or the exact amount of tax tried to be evaded, whichever is greater. Further, in some cases, the consignment is liable to detention, seizure and even confiscation. This makes e-Way Bill a crucial document, which can directly cause losses to the business, hence businesses are obliged to comply with it.
The main purpose of the e-Way Bill is to track the movements of goods and ensure GST compliance, to tame the generation of fake invoices and evasion of taxes. Expectedly, the e-Way Bill is effective and has helped the Government in curbing about 70% of tax evasion.
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The thorough reconciliation of the e-Way Bills at various levels of GST filing eliminates the scope of fraud or bogus invoicing as well. Since the invoice is validated by the E-Way Bills and the e-Way Bills are generated on the government’s portal they are authentic and so establishes a systematic and transparent approach to transportation.
E-Way Bills-Malpractices and Legal Issues
Despite its systematic approach, the e-Way Bill system still has few hitches. No doubt the Government and GSTN are trying to improve the system, but as of now, it can be said that the system is not perfect.
Ever since the establishment of the GST regime, multiple cases of tax evasion through frauds have been reported. So is the case with E-way Bills, though the E-Way Bill generation was supposed to be a mystic way of removing evasion at a broader level, it has in fact attracted many felonies.
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As per multiple reports and case studies, tax worth Hundreds of Crores have been stolen so far, involving fake e-Way Bills, fake invoices and even fake firms and companies, created using bogus documents like house rent agreement, pan number, etc.
Apart from that, various cases of fraudulent Input Tax Credit claims have also came into the light. These claims were made based on the same fake invoices and e-Way Bills.
These corrupt practices also strived to help the big companies as agents, to skip their taxes using fake E-Way Bills. These offenders also sold fake E-Way Bills to big companies and charged commissions on the amount of tax “saved”.
Latest Improvement in the e-Way Bill System
To ensure that the compliance stays in line and to reduce the cases of tax default, the government adopts new policies and brings constant changes in the existing systems. Recently, some important changes have been made to the E-Way bill system as well.
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All States and Union Territories of India are required to follow the E-Way Bill operations and generate E-Way Bills for the interstate as well as the intrastate movement of any goods, as per the Government rules.
- One E-Way Bill for multiple vehicles— Now one single e-Way Bill can be used to ship a consignment in multiple vehicles.
Let’s understand this better-
If a vehicle is transporting goods, say 500 boxes, from Mumbai to Pune using an E-Way Bill. From Pune, these 500 boxes are distributed to multiple locations; 100 Boxes to Delhi, 200 Boxes to Bangalore, 100 Boxes to Hyderabad, and the remaining 100 to Surat. Now there need not be four different e-Way Bills for different locations. The same e-Way Bill shall be used for all four cities, given that the Vehicle details, transport mode, and destination are changed for each one.
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- Integration of the e-Way Bill System with VAAHAN— Announced in February 2020, the E-Way Bill System has integrated with the VAAHAN system of Transport Department. In this, the Vehicle number entered in the e-Way Bill shall be verified on VAAHAN for its correctness. If the vehicle number does not exist, the system alerts the user to check, if the vehicle number is correct as per the Taxpayer then he can continue. However, the vehicle number must be updated in the VAAHAN system to avoid problems in the future. A pilot run of the same has begun in Karnataka.
- Blocking/Unblocking of -Way Bill Generation—A new and crucial change has been implemented on the E-Way Bill System as per which, the generation of e-Way Bills tends to be affected by the defaulted filing of GSTR-3B. The new notice from Government bars the taxpayers from generating any e-Way Bills if they have two or more consecutive pending GSTR-3B returns. This step was taken as an initiative to increase the GST compliance of businesses.
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Once the number of pending GST Returns are reduced to less than two consecutive tax periods, the generation of the e-Way Bills shall be unblocked.
E-Way Bill Compliance-Save trouble and Money
E-Way Bill System has been imposed as a stipulated part of GST. Compliance with E-Way Bill system is just as important. Violation of the Act or its provisions attracts penalization, halt to business activities, losses and ultimately downgrading of Businesses.
The movement of consignments valued Rs 50,000 or more, without an e-Way Bill, or executing any other violation of the Act, its provisions and Rules can lead to-
- A minimum penalty of Rs 10,000 or 100% of the tax value of the goods, whichever is more
- Seizure/Confiscation of the goods.
Now, if the owner of the seized goods turn up to pay the Tax and the penalty, then they will need to pay 100% of Tax and levied penalty.
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If the Owner fails to pay the Tax and Penalty within 7 days, then concerned goods are liable to confiscation, and the owner will be obliged to pay the imposed penalty.
The firmness of the provisions and rules of the Act makes it successful and somewhat easy to implement as it forges fear, of the consequences of non-compliance.
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Thus, the e-Way Bill is an important and mandatory document for transportation. Trade and Transportation is the essence of the business, a business would be still without the import and export of goods and services.
A manufacturer of Biscuits needs the inward supply of raw materials, flour, sugar, preservatives, and flavors, in bulk quantities. And the outward supply of the finished goods (the Biscuits) into the market to earn income/profit.
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Now if the mobility in business is compromised, it affects the business adversely. Consequently, making the E-Way Bill an ignorable document.
Complications in e-Way Bills and its 1-Click Solution
Although E-Way Bill is significant, its generation may still have loopholes. The E-Way Bill generation is time-bound, one cannot generate a post-dated E-Way Bill for a future date. It needs to match the real-time track of the consignment before it leaves and also while its in-transit, if there is going to be a vehicle switch (Transhipment). E-Way Bills cannot be delayed.
Ironically, the process of e-Way Bill generation, both from the portal and from ERP, is time-consuming. As it includes import and export of JSON files, constant seesawing and double-entry in the Portal and ERP. This takes time, moving to and fro for even minor details and errors, also error rectification while generating e-Way Bill is crucial since once the e-Way Bill is generated it cannot be edited, it needs to be cancelled and a new e-Way Bill needs to be made. It would save more time and effort if the process could be shortened somehow.
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It is now possible with GSTHero. GSTHero is a Government authorized GST Suvidha Provider (GSP). It integrates the ERP with the e-Way Bill Portal and makes e-Way Bill generation a piece of cake. Eliminates the JSON file export/import and the load of double entries.
GSTHero enables the user to Generate, Edit, Cancel, Consolidate and Print the e-Way Bill with Bar codes and QR codes, from the ERP itself. The user can also preview the e-Way Bill for errors before generating it, and then print the same, all from a single site, the ERP. This reduces the efforts of JSON file maintenance and errors and is quick. The process of e-Way Bill generation is simplified with GSTHero’sERP connectors (SAP, Tally, BUSY, Marg and Custom ERPs). “How to generate e way bill from Tally.”
Courtesy- E-Way Bill Official
About the Author- GSTHero- Making Life Simple! GSTHero is the best GST filing, E-Way Bill Generation & E-Invoicing Software in India. GSTHero is a government authorized GST Suvidha Provider. Both Businesses and Tax Practitioners can file GSTR 1, GSTR 3B, GSTR 9 and GSTR 9C with all supporting reports. 1-Click Auto Reconciliation & report-matching feature helps you in claiming up to 100% ITC and finds your GST Defaulting Suppliers. GSTR2A vs GSTR-3B, GSTR-1 vs GSTR-3B, ‘GSTR-1, GSTR-2A & GSTR-3B’ annual report matching is also provided by GSTHero.
GSTHero ERP Plugins provide 1 Click E-Way Bill & E-Invoice, Generation, Operation & Printing from your own ERP like Tally, SAP, Marg, Busy, Microsoft Dynamics, Oracle & others itself with high data security.
Disclaimer: The above post is sponsored by GSTHero. The article or blog or post (by whatever name) in this website is based on the writer’s personal views and interpretation of Act. The writer does not accept any liabilities for any loss or damage of any kind arising out of information and for any actions taken in reliance thereon.
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