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February 25, 2021

6 Reason why E-way bill need to Abolish in GST

by CA Shivam Jaiswal in GST

6 Reason why E-way bill need to Abolish in GST

AITWA alongwith the traders body CAIT has called a one day bandh on February 26, 2021. Transporters will close all their operations for a day. This Bandh is a cry by the traders & transporters for various issues in GST. AITWA is always ready to work with the Government to stop all tax evasions says its advertisement in leading news papers today

On Behalf of the entire Transporters & Traders in India Appeal to Respected Hon’ble Prime Minister

Our Appeal:

  • Abolish E-way Bill
  • it is a REGRESSIVE rule!

What is E-Way Bill?

E-Way Bill is an Electronic Way bill for movement of goods to be generated on the GST’s e-way Bill Portal. A GST registered person cannot transport goods in a vehicle whose value exceeds a prescribed limit, without an e-way bill that is generated through the e-way Bill Portal.

E-way bill has a validity period, which is 1 day for every 200 kms between buyer & sellers pin codes.

Under Section 129 of the CGST Act. vehicles are detained. If material is with a genuine invoice but error in the e-way bill, the penalty levied is 200% of the tax on the subject goods or 100% of the value of goods. Same penalty applies when there is no e-way bill altogether.

The RuleThe Reality
E-Way Bill is based on mistrust against all Industries. Traders and TransportersIntegrity of the entire Nation involved in commerce is being doubted. It is not in line with ease of doing business. There may be few evaders, who the Government can identify by technology & intelligence
E-way Bill validity is 1 day for every 200 kms distance. In special situations limited extension is grantedE-way bill doesn’t consider various practical situations like Sunday/holiday, movement under hub & spoke, stock lying in destination/transhipment, breakdown/jams/ agitations, hilly terrains, personal issue of drivers & many more,  making it difficult to meet the target of 200 kms per day for each consignment. Extension clause – cannot justify unpractical compliance. To make mistakes is human. Tax laws should not define business models. Leg wise validity & stricter rules only for sensitive goods
E-way Bill rules penalizes consignor/consignee with 200% of the tax on the transaction or transporter with 100% of value of goods for even human errors or expiryThere is no distinction between error & evasion in the system. If an eway bill of a genuine transaction fails, the penalty is the same for one without an eway bill, irrespective of any revenue loss to exchequer. If there is no revenue loss to the Government, the penalty should be fixed at Rs 10,000, to make the law judicious and practical.  
If one fails to extend e-way validity enroute for any reason whatsoever, there is no respite for such minor lapseIf the E-way bill expires. one becomes officially a criminal. If caught one is subject to the heavy penalty equal to the value of goods. Minor penalty should be levied to regenerate by giving facts. Such data can be analyzed to assess error v/s evasion
GST & Eway bill was planned to reduce the vehicle stoppagesThere is no free movement of vehicles. They are stopped on the pretext of checking e-way bill, promoting rampant corruption. Fastag is mandatory, Government should integrate for intelligence rather than interception
E-way bill suggests that a driver must cover 200 kms per day of the distance between seller & buyer and should absorb the time lost in godowns or transhipments by covering more distance  This is inhuman and against basic fundamental rights. Driver is forced to risk his life – physical & mental fatigue, to comply with such impractical rules. Efficiency of service should be decided between receiver & provider  
Invoice is launched where taxpayer generates invoice on Govt portalWhen e-invoice is applicable, the e-way bill requirement should not be there

Reason for E way bill abolish in GST

  1. Daily increasing diesel prices are making transport survival difficult
  2. Inability to pass on the increased cost to consumers is affecting margins
  3. Government needs to formulate mechanism in consultation with transport sector
  4. Diesel index should be made mandatory for revision to consumers
  5. Uniform pricing across the Country should be responsibility of Government
  6. Immediate relief should be given by reducing rate of taxes

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