The mandatory implementation of the e-way bill system from February 1 for all inter-State movement of non-exempted goods will help boost compliance under the Goods and Services Tax (GST) regime, according to Finance Secretary Hasmukh Adhia.
“All we want to do is using information technology and a simple self-declaration saying you moved so much goods… be able to then ask so why didn’t you file a GST return,” Mr. Adhia said at a briefing on Friday. “Our intention is to make the filing of a simple e-way bill — which, either the supplier, the buyer or even the transporter can file – a habit that is adopted by everyone.”
The July 1 implementation of GST has seen revenue collections from the new nationwide indirect tax falter in recent months and the Centre, already struggling with a wider than budgeted fiscal deficit, is keen to tighten tax compliance under the new regime. The decision to advance the roll-out of the nationwide e-way bill system to February 1 is line with this objective.
Mr. Adhia sought to allay fears that the implementation of the e-way bill system would result in a return of ‘inspector-raj’ and said only in the initial period would a few random vehicles be stopped en route to check if the goods being transported were accompanied by an e-way bill. Also, once a vehicle had been stopped and checked it would not face any further inspections along the rest of its route, even if it traversed multiple States. The number of exemptions for complying with the requirement of an e-way bill was also extensive, including about 50% of the CPI (Consumer Price Index) basket of goods, he said. Given the experience of States which had implemented similar e-way bills as part of the earlier VAT regime, there is clear evidence that tax collections jumped following implementation of the system.
“Some of these States had not only intra-State but they also had inter-State requirement of e-way bills. These States saw a 15% to 20% increase in revenue the year after they implemented it,” Mr. Adhia said.
About 15-16 lakh e-way bills are likely to be filed daily for inter-State movement of goods, with the combined number inclusive of filings for intra-State transportation estimated to be about 40 lakh, according to Prakash Kumar, CEO, GST Network.
Separately, Mr. Adhia said initial data on GST collections under the composition scheme — where small businesses self-declare turnover and pay a flat rate varying from 1% for traders to 5% for restaurants — had revealed “outright under-reporting.” With 6 lakh returns filed under the scheme, the revenue receipts amounted to a paltry Rs. 251 crore.