Some states have asked their tax departments to step up vigilance on electronic way bills to clamp down on evasion, according to people with knowledge of the matter, raising the prospect of increased roadside inspections of trucks.
The move comes as states such as Maharashtra have seen lower-than-expected generation of e-way bills by transporters, which the authorities fear could be a sign of evasion.
Maharashtra has issued instructions that tax authorities should start taking strict action against those found to be transporting goods without e-way bills. Maharashtra generated 100,938 bills compared with Gujarat’s 175,851 on March 3 though it had 2,669 enrolments against Gujarat’s 1,980. There is an apprehension that transporters or businesses are not generating e-way bills,” said a government official.
An e-way bill is required for movement of goods worth more than Rs 50,000 across state borders. Eway bill trials began on January 16 and the system was formally implemented on April 1. E-way bills for intra-state transport, which involve movement of goods beyond 10 km, will start on April 15 in Andhra Pradesh, Gujarat, Kerala, Telangana and Uttar Pradesh, the government said on Tuesday. Trucks caught without e-way bills can be levied a penalty of up to Rs 10,000 besides which the cargo can be inspected to ascertain tax evasion
A penalty to the tune of 100% of the tax being evaded can be levied along with the tax itself. Both the vehicle and the goods can be impounded as well. The e-way bill mechanism is an integral part of the goods and services tax (GST) regime that’s aimed at plugging evasion.
Evasion was one of the reasons cited by the government for the fall in GST revenue in the past few months. GST collections hit a high of Rs 95,132 crore in October before declining to Rs 85,931 crore in December 2017. They have since recovered to Rs 89,264 in February but are still below the peak. Tax experts said businesses need to ensure that they don’t slip up on e-way bill generation through error or ignorance of the law. “Businesses may face more scrutiny going forward as clearly there seems to be an apprehension based on the data that many dispatches are being made without generation of eway bills,” said Anita Rastogi, partner, GST and indirect tax, at PwC. “They need to put focus on this area.”