GST: Border checkposts may not end soon as e-Suvidha, e-Sugam to remain

GST Council couldn't reach a consensus on the e-way Bill proposed by the Centre

Existing provisions such as e-Sugam in Karnataka or e-Suvidha in Uttar Pradesh might continue under the goods and services tax (GST) regime till the electronic-way (e-way) Bill is approved. 

While the draft e-way Bill proposed a threshold of Rs 50,000 over which prior online registration of a consignment is required, there is no threshold in the current systems of states. 

Also, while the e-way Bill was proposed for both interstate and intrastate movement of goods, the existing system is only for interstate movement. So, any truck coming to Karnataka or Uttar Pradesh (UP) has to fill a form on e-Sugam or e-Suvidha, besides taking a challan and invoices, so that the authorities in these states can track stocks with dealers. And, if he has not paid value added tax (VAT) on it, they can ask him to show the stock. 

Then, there are states such as Maharashtra which do not have this type of system for all goods but only for evasion-prone items, explains M S Mani of consultancy Deloitte. Maharashtra takes VAT as entry tax on goods such as marbles, granites and tiles, he said. 

While the existing system in Karnataka and UP would continue if these states want it, the one in Maharashtra has to be done away with, since both entry tax and VAT would not be there under the GST regime, officials said.

After the GST Council meeting on Sunday, Union Finance Minister Arun Jaitley had explained that an alternative or transient system would be in place under the GST regime, allowing the existing system in states to continue till a consensus is reached in the Council over the e-way Bill. 

Opinion was divided in the Council at Sunday’s meeting. Some felt the Bill would not be required when the GST system got stabilised. Some said a tracking system is not required for intrastate movement of goods but only for interstate movement. The draft was proposed to be for both types of movement. 

Mani also says: “We don’t need the e-way Bill at all under the GST system.” Movement of goods can be tracked by the GST Network (GSTN), the information technology backbone, and via matching of invoices, he said. 

However, many states wanted to be doubly assured that there would be no evasion of tax under GST and, so, were asking for the Bill. 

Bipin Sapra of consultancy EY also said the e-way Bill was not required. On whether the existing system would create complications under GST, he said, “We have to see how it works.”

The Central Board of Excise and Customs had earlier come out with draft rules for the e-way Bill. These proposed a requirement for registered entities to furnish, in a prescribed format on the GSTN website, information relating to any goods worth more than Rs 50,000 that they intended to move within a state or outside. GSTN will generate e-way bills that will be valid for 1-15 days, depending on the distance to be travelled — one day being for 100 km and 15 days for more than 1,000 km transit.

The person in charge of conveyance will be required to carry the invoice or bill of supply or delivery challan, and a copy of the e-way bill or the e-way bill number, either physically or mapped to a radio frequency identification device embedded on to the conveyance.

The rules authorised the tax commissioner or an officer empowered on his behalf to intercept any conveyance to verify the e-way bill or the number in physical form for all interstate and intrastate movement. The officer will be required to give a summary report of every inspection of goods in transit within 24 hours and the final report within three days.