The draft rules say that to generate an e-way bill, the supplier and transporter will have to upload details on the GSTN (Goods and Services Tax Network) portal. Once an e-way bill has been generated, a unique e-way bill number (EBN) shall be made available to the supplier, the recipient and the transporter on the common portal. 

A new bill has to be generated by the transporter if the goods are transferred from one vehicle to another. When multiple consignments are to be transported in one conveyance, the transporter needs to indicate the serial number of e-way bills generated in respect of each such consignment.

Further, a physical copy of EBN along with other documents like invoice or bill of supply or delivery challan etc. has to be carried by the person in-charge of the conveyance and needs to be produced for verification. Or else, a Radio Frequency Identification Device (RFID) can be fixed to the vehicle. This device will map the e-way bill and verify it through readers installed at key major check points.

Tax officials will be empowered to inspect any delivery and cross-verify it with the e-way bill to prevent tax evasion. On the other hand, if a vehicle has been detained for more than 30 minutes without a valid reason, the transporter can inform authorities about it on the portal.

The objective here is to eliminate state-wise documentation to ensure smooth movement of goods and reduce the number of check-posts across the country, thus curbing corruption.

While the intent is good, the process of multi-layered declaration of details seems cumbersome.

“When suggestions were sought for the proposed e-way bills, there were overwhelming objections and suggestions from across industries. E-commerce retailers will be impacted because there will be many instances where goods in transit may be cancelled and even in that case, new e-way bills have to be uploaded,” said Bharat Goenka, managing director of Tally Solutions. He suggested exclusion of business-to-consumer transactions from the ambit of e-way bills. But given the urgency of implementation, Goenka is skeptical how much of stakeholders’ recommendations will be considered by the GST Council when finalizing rules.

Archit Gupta, founder and chief executive officer, ClearTax.com feels there is a need to take a re-look at the validity of e-way bills. (See Chart) The validity has been calculated based on the distance travelled, but there is not much clarity on the validity of the e-way bill in cases of delayed delivery. “There could be instances where the truck breaks down and there is delay; at such times, what should one do?” he asks.

Apart from that, there is too much reliance on technology. So, transporters, especially in smaller towns, who are not tech-savvy may fail to comply with the process or complain about detention. Also, given the cost involved in installing RFID devices to the vehicle, not many transporters may opt for it.

Logistics and transportation are largely in the unorganized sector and not very tax compliant either; hence, the proposed e-way bills could come as a compliance burden for them, said tax experts. If implemented without further simplification, then it could become a game of “survival of the fittest” for small transporters, they fear.

According to recent a media report, revenue secretary Hasmukh Adhia has promised transporters that tax authorities will provide them time to adjust to the new system and not begin imposing penalties from “Day 1”.

It remains to be seen if the government keeps this promise. Failing which, it could affect the ease of doing business in India, defeating the purpose of GST.