Complications in GST and e-way bills

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Why in news?

Recently GST Council decided e-way bills will be introduced in a phased manner by March 2018.

What is the recent decision on e-way bill?

• The e-way bill can be electronically generated (on the government portal) either by the supplier or recipient of the consignment, before the movement of goods.
• The transporter needs to carry an electronically generated way bill or a permit, with every consignment having value exceeding INR 50,000.
• The person can carry the invoice book with him and issue the invoice once the supply is delivered.
• All such supplies will be inter-state supplies and attract integrated tax in terms of Section 5 of the Integrated Goods and Services Tax Act, 2017.
• Till this completely gets implemented, the states have been allowed to follow their own way bill/road permit system, including the ones used prior to GST.

• Recent decisions are based on communications received particularly from the suppliers of jewellery regarding issue of invoices when goods are sent on approval basis.

What are the complications in the decisions?

• Numerical challenge -Under the GST law, invoices are supposed to be serially numbered.
• If invoice books are sent through transporters, maintaining serial numbers could pose a numerical challenge during invoice uploading and subsequent assessments since one set of invoices will be at the head office and the other in a remote location.
• State taxes -This would create confusion when a truck starts its journey in one State, travels through three other States before completing its journey in a Union Territory.
• Approval slips -Complications can arise if the goods are sent on approval basis since there would be no invoice.
• The circular assumes that acceptance or rejection of goods sent on approval will be done instantaneously.
• A machining part sent by a supplier to a first time customer would take a few weeks to be approved,some parts may be approved while others rejected.
• Jewellery based -Clarification would be applicable to all goods supplied under similar situations, it appears that the draftsman has kept only jewellers in mind.
• To how many suppliers (apart from, maybe, jewellers) can send the invoice book along with the vehicle in which the goods are transported is not specified.

Source: Business Line