E-Way Bill under GST Regime (Only for goods of special purposes??)

DS Mahajani ^*

Goods and Service Tax (GST), the national agenda for reforms under Indirect tax system is in news on daily basis. But this time it is for the wrong reasons. Yes, this is because on 13^th April 2017, Central Board of Excise and Customs (CBEC) released Draft Rules for Electronic Way Bill (“E-Way Bill”).

The major points of the Draft E-way Bill are as under –

1. E-Way bill shall be required for consignment value exceeding Rs.50,000 before commencement of movement of goods. (Please read my comments on ‘goods’ in next two-three para of this article.)
2. E-way bill shall be generated by the registered person as Consignor or the recipient of supply as Consignee or Transporter.
3. Unique E-way bill number (EBN) shall be available on generation of E-way bill on common portal;
4. E-way bill so generated shall be valid for specified period from 1 to 15 days, which shall vary upon distance. Like less than 100 KMs in one day to 1000 KMs in fifteen days;
5. The person in-charge of the vehicle / conveyance shall carry invoice or challan or copy of E-way bill physically or mapped to Radio Frequency Identification Device (RFID).
6. Officers shall be authorized to intercept any conveyance and verify E-way bill for all inter-state and intra-state movement.
7. RFID readers shall be installed in places for verification of movement of goods ;
8. The E-way bill can be cancelled within 24 hours, provided it has not been verified in transit;
9. It will be compulsory to record Summary report of every inspection within 24 hours.
10. Where the vehicle is intercepted and detained for more than 30 minutes, the transporter can report the same in prescribed Form.
11. Once the physical verification of consignment in transit is done, no further verification can be done, unless there is tax evasion.

After releasing the above Draft Rules, there is an uproar amongst trade and business in public domain as proposed E-Way Bill will cause unnecessary hassles in normal business transactions having consignment value exceeding Rs.50,000.

Rightly so, because as per one estimate road traffic accounts for 60% of freight traffic in India, where truck drivers are required to spend majority of their time at check posts. In the GST regime it was assumed that the check-posts will be done away with but now it looks like proposed E-way Bill would replace check-posts, which would cause lot of hardships to business community in the Country.

However, my interpretation on the above rules is that the proposed E-Way bill is not for all goods, but goods of special purposes under GST regime.

This is because Draft Rules for E-Way Bill is issued in continuation of Rule 8 of Draft Rules for Tax Invoice, Credit and Debit Notes put in public domain by CBEC on 2^nd April 2017.

The web-link of the said Tax Invoice rules is as under –

https://taxguru.in/goods-and-service-tax/draft-gst-tax-invoice-credit-debit-notes-rules-dated-31032017.html

Rule 8 of Tax Invoice, Credit and Debit Notes Rules is on ‘Transportation of goods without issue of invoice’. On combined reading of sub-rule (1) and (3) of Rule 8 it is clear that, where ‘goods’ are being transported on a delivery challan in lieu of invoice, the same shall be declared in FORM [WAYBILL].

Now which are the ‘goods’ here?  These are given under sub-rule (1) of Rule 8 of Tax Invoice, that is –

(a) supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known,

(b) transportation of goods for job work,

(c) transportation of goods for reasons other than by way of supply

Hence, on combined reading of sub-rule (1) and (3) of Rule 8 of (Draft) Tax Invoice Rules it is clear that for supply of liquid gas where the quantity at the time of removal from the place of business of the supplier is not known or transportation of goods for job work of transportation of goods for reasons other than by way of supply, E-Way shall be required.

Secondly, it is also to be observed that the Draft Rules of E-Way Bill does not mention (at the beginning) under which section or rule it is being issued (like draft rules for Tax Invoice are issued u/s 31 of CGST Act). Hence, at the beginning of the E-way Bill, if it mentioned that ‘this rules are issued pursuant to Rule 8 of Tax Invoice Rules’, it could have given clear idea about the E-Way Bill rules to all concerned.

Now, please read Draft E-Way Bill (as per below web-link) and compare it with Rule 8 of Draft Rules for Tax Invoices –

 https://taxguru.in/goods-and-service-tax/gst-draft-electronic-bill-rules.html

If above interpretation is correct, in that case considering the significant importance attached to the subject, CBEC should issue a clarification asap for knowledge of all stakeholders.

* The views expressed are strictly personal.

[Author: DS Mahajani, M.Com, A.C.S, A.C.M.A. He can be reached at DSMAHAJANI@YAHOO.COM]

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