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February 23, 2021

Transporters’ body joins Bharat Bandh call against new e-way bill system

by CA Jessica Nagaonkar in GST

Transporters’ body joins Bharat Bandh call against new e-way bill system

An E-Way bill is basically short for Electronic Way Bill. It is a document which is generated electronically for movement of goods from one place to another. This movement may be inter-state or intra-state. E-Way bill is mandatory to be issued where the consignment value exceeds Rs 50,000 every registered person who causes movement of goods.

Under the New Return System, the Government plans to integrate GST returns with e-way bills. With this integration, the Government is planning to disallow taxpayers from using the e-way bill site from generating e-way bills when they default in filing GST returns for two consecutive tax periods. If a registered dealer has not submitted his GST Return for two consecutive tax periods, he will not be able to furnish details in Part A of GST Form EWB-01. Thus, both the dealer and the buyer will get blocked. This would apply when either GSTR-3B or GSTR-4 return, whichever applicable, is not filed. 

AITWA demands abolition of new E-way bill

  • The All-India Transporters Welfare Association (AITWA) has extended support to Bharat Bandh call by The Confederation of All India Traders (CAIT) on February 26 against GST and hold ‘Chakka Jam’, or road blockade, on the same day.
  • The National President of AITWA said that all state level-transport associations have confirmed their support to AITWA in this one-day non-operation of transport in protest of the fuel price hike and scrapping of new E-way bill laws introduced by Government of India.
  • AITWA demands abolishing the E-way bill as the newly introduced E-invoice is good enough for preventing tax evasion.
  • They will reject booking and movement of all Bill-oriented goods for one day.
  • All companies have been asked to park their vehicles between 6 a.m. to 8 p.m. as a symbolic protest.
  • Godowns will display protest banners.
  • Customers will be requested not to book or load goods on the day.
  • Vehicles may be tracked by the Government using Fast Tag connectivity to E-invoice.
  • It is demanded that transporters should not be subject to any penalty by the Government for any time-based compliance target of transit.
  • Penalties for a truck carrying a consignment with an expired or an erroneous Bill amount to 200% of the tax value or 100% of the invoice value under Section 129 of the CGST Act, 2017. For small and medium transporters, especially those involved in part-load movement of goods or retail transportation, the new rule means a burden with penalties running into lakhs of rupees for circumstantial delays. This may lead to completely shutting their shop
  • Diesel prices should be reduced and mechanisms need to be discussed and created with the Transport Industry for future regulation.
  • It is contended that diesel prices should be equalized across the length and breadth of the nation.

Why has CAIT called for Bharat Trade Bandh?

Traders’ body CAIT said all commercial markets across the country will remain closed on February 26 in view of its ‘Bharat Bandh’ call demanding a review of the provisions of the GST regime.

  • According to CAIT, GST is one of the most complex taxation system which has resulted in misery to traders.
  • Repeated statements of CAIT were never responded by the GST Council, which has generated a feeling among the traders across the country that the council has its own agenda and it is not interested in obtaining cooperation of traders.
  • CAIT highly regretted such dismal picture of GST and which compelled the trade leaders attending the conference to call for a Bharat Trade Bandh.
  • Besides the complicated tax structure, the traders’ rage is directed at the absence of a consultative mechanism both at centre and states which is against the declared policy of PM Modi for taking stakeholders into confidence while framing a policy or the rules and minimum government-maximum governance.
  • CAIT national president BC Bhartia and secretary general Praveen Khandelwal and AITWA chairman Pradeep Singhal jointly announced the stir plan on the opening day of a three-day national trade conference at Nagpur.

Issues of CAIT against GST Council

The GST Council has not only pampered various anomalies and distortions in ‘one nation-one tax’ principle of GST but has not taken any step to simplify the GST taxation system.

The only aim of the GST Council so far was how to get more revenue and how to load the traders with more compliance burden without considering the ground realties of trade in India.

What is the expectation of CAIT?

The traders concede that GST is a progressive taxation system but want it to be free from glitches, anomalies, disparities and distortions.

Time and again, CAIT has expressed its view that the tax net of GST should be widened resulting into more revenue to the government but it is possible only when the GST is simplified to the extent that even a small trader operating his business activities at remote area could also be able to comply with GST without any external help.

The current state of increased administrative tax compliance burden on traders and a locking-up of working capital due to slow tax refund processing, has led to high compliance costs because the prevalence of multiple tax rates implies a need to classify inputs and outputs based on the applicable tax rate.

Now it is to be seen whether this strike has any effect on the affairs of GST or not.

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