Implementing the Goods and Services Tax (GST) regime in India saw the introduction of the E-way Bill system in 2018 to streamline the transportation of goods across the country. Despite its launch, the system has undergone several revisions to enhance its efficacy and effectiveness.
With the arrival of the new GST Return system, further changes have been made to the E-way Bill system. These include new provisions for multiple modes of transportation, consolidated E-way Bills, and auto-calculation of distances. These changes aim to reduce the burden on taxpayers, reduce errors, and foster greater transparency in the transportation of goods.
This article delves into the changes implemented in the new GST return system and analyses their implications for businesses in India.
Currently, for goods whose value exceeds Rs. 50,000 are being transported in a vehicle, an e-way bill must be generated through the GST portal. If a vehicle transports more than one shipment, an e-way bill must be generated for all goods valued at more than Rs. 50,000. This transportation could be related to a supply, for factors unrelated to a supply, or if an unregistered individual carries out an internal supply.
An e-way bill must be generated on the common portal for each of the following categories of movement. However, in two other circumstances, for instance, even if the value of a consignment is less than Rs. 50,000, an e-way bill must be generated; For example,
The government plans to merge GST returns and e-way bills in the new return system. This integration prevents taxpayers from generating e-way bills on the site if they still need to file their GST returns for two consecutive tax periods. As per the new regulations, a registered dealer will only be allowed to add information in Part A of the GST Form EWB-01 if they have filed their GST returns for two consecutive tax periods. This restriction will apply to both the buyer and the seller in such a scenario and will be enforced if the GSTR-03B or GSTR-4 return is not filed accordingly.
Businesses typically generate invoices using their billing and accounting software, which they then upload to the GST system for filing returns. However, with the proposed e-invoicing system, invoices will be directly issued over the GST network, and all data will be instantly uploaded to the portal. This will eliminate the need for manual data entry.
Initially, starting January 1st, 2020, this new system was only implemented for B2B invoices. Consequently, generating additional e-way bills will no longer be necessary for the future. The government has two key objectives in integrating the GST return filing and e-way bill systems. The first is to facilitate taxpayer data management, and the second is to enable real-time transaction monitoring to prevent potential tax evasion cases.
To summarise, the changes made to the new return system under GST have far-reaching consequences for the E-way Bill system. Introducing new provisions such as multiple modes of transportation, consolidated E-way Bills, and automated distance calculations will enable businesses to optimise their operations and minimise errors. These changes are expected to enhance the transparency and accountability of the goods transportation process, leading to a more streamlined and effective system.
Businesses need to remain informed about these updates and adhere to the new regulations to avoid potential penalties and legal complications. These changes signal a positive shift towards a more efficient and effective system, benefiting taxpayers and the government.