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9 Updates to Look Forward to in EWay Bill System to Curb Tax Evasion

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9 Updates to Look Forward to in EWay Bill System to Curb Tax Evasion

In an attempt to lower the possibilities of GST evasion, e-way bill system was rolled out on April 1, 2018, for inter-state movement of goods worth over Rs 50,000. The same for intra or within the state movement was rolled out in a phased manner from April 15, 2018. Since then, CBIC, NIC and GST Council have been collectively working to analyse filed data, identify gaps, fine tune processes and ultimately modify existing rules to curb tax evasion.

There have been several announcements with this regard to EWay bill system, we bring a compendium of the same for your easy assimilation:

  1. Auto-calculation of Distance

E-way bill system will soon be able to auto calculate the distance for movement of goods based on the postal PIN codes of source and destination locations. User is allowed to enter the actual distance as per his movement of goods. However, it will allow a variation of only 10%. That is the e-waybill system will calculate and display the actual distance between the supplier and recipient addresses.

For example, if a transit distance has been calculated as 900km by the system, then the user can transit the goods up to 990kms (900kms+90kms)

In case, the source PIN and destination PIN are same, the user can enter up to a maximum of 100KMs only. If the PIN entered is incorrect, the system would alert the user as INVALID PIN CODE. However, he can continue entering the distance. Further, these e-waybills having INVALID PIN codes are flagged for review by the department.

However, there has to be flexibility in the system because at times transporters need to travel distances more than the prescribed limits due to unforeseen circumstances such as under-construction pathways, natural calamities, socio-political environments etc.

  1. Monitoring of Multiple Trips on Single EWay Bill

It has come to the notice of tax officers that some transporters are doing multiple trips by generating only a single e-way bill or not reflecting e-way bill invoices while filing sales return. It has also come to the notice that certain businesses are not generating e-way bills even as supplies are being made. For such cases, the tax authorities have started seeking ‘clarification’ from the taxpayers.

 In one such case, a taxpayer has been asked to provide "clarification" within three days on the difference between taxes paid and the liability which the tax officer has ascertained after analysing sales return GSTR-3B and e-way bill data for the period October 2018 and January 2019, by Ghaziabad GST commissionerate.

  1. Barring Generation of multiple E-Way Bills using single Invoice Number

As per the representation received by the transporters, the government has decided to bar generation of multiple e-way bills based on a single invoice. That is, once E-way Bill is generated with an invoice number, then none of the parties – consignor, consignee or transporter – can generate the E-Way Bill with the same invoice number.  However, same invoice reference shall be quoted in cases of primary document of delivery Challan, where multiple EWBs are required to be generated for goods of single consignment are transported in multiple vehicles.

  1. Tallying GSTR 1 with EWay Bills

Recently, the Goods and Services Tax (GST) authorities have started tallying the two sets of data received by GSTN : GST return filings and e-way bills. These are matched with the summary reconciliation statements of estimated tax liability, thereby, forcing businesses to explain discrepancies such as under-reporting distances.

  1. Restriction on EWB Generation

As recommended in 31st Council meeting, there shall be restrictions on EWB generation if GST returns are not filed for two consecutive tax filing periods. The Goods and Services Tax Network (GSTN) is developing a system such that businesses who have not filed returns for two straight return filing cycle, which is 6 months, would be barred from generating e-way bills.

  1. Barring of Generation of E-Way Bill for Interstate Movement by Composite Taxpayers

The proposed system will also bar generation of e-way bill for interstate movement by composition taxpayer. This is being done to plug a loophole in the system as the GST Act does not allow the composition tax payers to do Inter-state transactions. Also, the supplies of composition tax payers will not be allowed to enter any of the taxes under CGST or SGST for intrastate transactions. In case of Composition tax payer, document type of Tax Invoice will not be enabled.

  1. Extension of E-Way Bill in case Consignment is in Transit

The transporters had represented to incorporate the provision to extend the E-way Bill, when the goods are in transit. The transit means the goods could be on Road or in Warehouse. This facility is being incorporated in the next version for the extension of E-way Bill.

During the extension of the e-way bill, the user is prompted to answer whether the Consignment is in Transit or in Movement. On selection of In Transit, the address details of the transit place need to be provided. On selection of In Movement the system will prompt the user  to enter the Place and Vehicle details from where the extension is required. In both these scenarios, the destination PIN will be considered from the PART-A of the E-way Bill for calculation of distance for movement and validity date.

  1. Facility to import EWay Bill Data into GSTR1

Ideally, every EWay Bill generated is a sub-set of the invoice with additional details on location where the goods are to be transported, distance, Transporter’s ID etc. In the 31st GST Council meeting, the authorities announced the linking of GSTR 1 with E-way Bills (EWB) inn order to check GST non-compliance. Read here to know more about the same.

  1. eWay Bill Integrated with NHAI’s FASTag

Central tax officers have detected 3,626 cases of GST evasion/violations involving Rs 15,278.18 crore during April-December period involving eway bills. Hence, the GST e-way bill system is integrated with NHAI's FASTag mechanism from April 2019 to help track movement of goods and check GST evasion.

Some transporters complete multiple trips on a single e-way bill. An integration of NHAI’s FASTag with eway bill will help authorities know the exact location of the vehicle and when and how many times it has crossed NHAI’s toll plaza.

The move would improve operational efficiencies across the country's logistics landscape. With these changes such as automatic calculation of distance between two locations via PIN codes and one e-way bill for one invoice, coupled with greater focus on RFIDenabled vehicles, tracking the consignments would be easier.

Vehicles caught without e-way bills can be levied a penalty or can lead to confiscation of goods.

IRIS is an established GST Suvidha Provider (GSP) and was one of the first GSPs to complete the integration with NIC’s E-way Bill System. Our E-way Bill solution, branded as IRIS Topaz, is an end-to-end solution for entire E-way Bill operations. IRIS Topaz can be accessed through the web, desktop utility, and APIs.

IRIS Topaz Desktop Utility, an MS® Excel-based application, will enable you to manage all your E-way Bill related tasks simply and quickly. For further queries or free demo, feel free to contact us here. You can also write to us at support@irisgst.com

About Anushree Joshi

Anushree

Anushree Joshi is a Senior Domain Specialist in IRIS GST team and is responsible for product development and customer success. She is a Chartered Accountant, Cost & Management Accountant and have been associated with IRIS for 7+ yrs. Prior to joining the IRIS GST team, she was part of the IRIS US SEC XBRL team, helping listed companies in US file their annual reports in IFRS and US GAAP. She enjoys reading and a Kathak (Indian classical dance) enthusiast.

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Comments

Subhash Mishra 4 months ago

Good efforts to explain the changes.
If some examples added it would be more easy to catch.

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Dani 2 months, 1 week ago

We are a group of volunteers and starting a new initiative in a community in the same niche. Your blog provided us beneficial information to work on. You have done a wonderful job!

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