Given the complex structure the transport industry ends up spending 30-64% of its time and resources on tax compliance, out of which nearly 16% of its time is spent by the trucks queuing up at interstate check points for tracking and inspection according to a report by ministry of road transport and highways.
A truck in India covers an annual average distance of 85,000 km as compared to 1,50,000 to 2,00,000 km in advanced countries which pose a clear indication that our logistics industry needs some reforms. Now the introduction of GST is expected to increase the need for integrated logistics arrangements as companies decrease the number of warehouses they keep up in different states. The changes achieved by GST are likewise expected to solve one of the significant problems this sector faces – the inter-state transport of goods without the hassle of documentation and long holding up queues at check posts. The GST Council and CBEC's answer to this problem is the GST E way Bills which will replace the waybills and transport bills that transport companies use today.
Compliance has been the bane of the Indian logistics industry for some time now. The waybills obtained currently from VAT authorities are famous for restricting movement of goods crosswise over states. While e-way bills should help in free-stream of goods, it does not mean that transporters don't need to take after rules anymore. The CBEC has already released a detailed guideline on the use of e-way bills which drill down the accompanying compliances:
Let us toss some light on the effect of logistics bill or e-way bill on the logistics industry. The e-way bill recording promises better revenue utilizing the benefits of Information Technology. It is additionally expected that the E-way bill mechanism would be an effective instrument to track movement of goods and check tax avoidance and will ensure that goods being transported follow the GST Law.
The E-Way Bill promises multiple benefits for the transporters. The purpose of E-Way Bill or advantages of E-Way Billing can be summarized along these lines:
Reduce Documentation - All the existing state-wise documentation required for movement of goods will never again be required. Another beneficial alternative that is available for the transporters is the establishment of RFID device in the vehicle used to transport consignments on a regular premise. The person in charge of the vehicle never again needs to convey physical copies as the device is attached to the vehicle and the e-way bill can be mapped and verified through the device itself.
Quicker movement of Consignment - Another huge advantage of E-Way Billing will be the removal of the large number of check-posts crosswise over state borders and national highways, resulting in ease of movement of goods.
Reduced Logistics Cost - Logistic bill or E-Way Bill would reinforce proper invoicing and along these lines would reduce tax avoidance. In the longer run this bill is expected to reduce our Logistic cost to GDP proportion, which is currently very high when compared to other countries.
However there are some bottlenecks which are issues of concern for the logistics industry. Putting the disadvantages of E-Way Billing in a nutshell we have:
Accessibility to IT Infrastructure – Small transporters especially from provincial areas will face trouble in securing access to GSTN gateway for generating the e-way bill. The government now faces the mammoth assignment of ensuring that all transporters enormous or little from country or urban areas do have access to internet even in a hurry.
Unless an organization has the IT system to help and generate e-way bills in real time, it will be a huge issue. We have very less time to get the necessary infrastructure up.
Different implementation timelines in states. Industry analyst and businesses are confused state as currently 15 states have notified the implementation of e-way bill from February 1, 2018 but some states like Maharashtra and West Bengal have decided to defer it which is creating confusion for the businesses which have inter-state operations, as there is no clarity over this situation from CBEC as of now.
Keeping up multiple bills – E-commerce retailers use several modes of transport to ensure that goods reach the customers from the warehouse or the manufacturer's area on time. Since a fresh e-way bill must be generated every time the mode of transport is changed E-com will definitely end up generating a large number of bills for every shipment.
Potential delays in generating e-way bills - Many a times customers end up canceling orders even while the goods are in travel, or return goods already purchased. Fresh e-way bills have to be generated each time this happens. This poses an issue for E-com retailers who use outsider logistics. They will be able to generate e-way bills simply after the transporter additionally transfers details on the GSTN, which can cause potential delays in shipment.
Summing up, we find that there are expected positive effect of e-way bill and furthermore visible loopholes in the realization of the vision of the bill. At this juncture when the e-bill is in the genesis stage, it will be too soon to reach a determination with reference to whether the e-way bill advantages outweigh disadvantages or vice-versa. Implementation is the key and that would decide what e-way bill would end up being like!!