Relief for suppliers? E-way bill may not be needed for small orders

GSTR-3B form likely to be extended by six months

Small orders that are part of a large consignment out for multiple deliveries within a state may not require an electronic-way (e-way) bill in the goods and services tax (GST) regime. This will come as relief for e-commerce and consumer goods suppliers. The e-way bill requirement will be limited to items priced over Rs 50,000 for intrastate supply.  

This is among changes expected in the GST e-way bill to ease the compliance burden and will likely be taken up by the GST Council during its meeting on Saturday. The exemption, however, will not apply to interstate movement of consignments.

“Changes will be made in the rules to do away with the requirement for multiple e-way bills for small orders within a state. The aim is to remove difficulties faced by companies,” an official said.

This essentially means if a truck out for delivery is carrying 20 orders, of which four orders are priced over Rs 50,000, only four e-way bills will need to be generated. Therefore, for delivery of iPhones and other expensive appliances, the e-way bill requirement will stay.

Exemption from the e-way bill may also be extended to shipments from inland container depots to ports. “It will be a relief for the industry if smaller consignments do not require e-way bills, but the government should consider it for interstate transactions as well,” said Pratik Jain, partner, PwC India.

“It is necessary to keep small consignments transacted within a state out of the e-way bill purview as it would reduce compliance and documentation challenges and allow the tax authorities to focus on large transactions having significant revenue potential,” said M S Mani, partner, Deloitte India.

The council is also expected to finalise April 1 as the date for implementation of the e-way bill, as recommended by the group of ministers led by Bihar Deputy Chief Minister Sushil Modi.

“States want early implementation of the e-way bill to check revenue leakage,” said another official.

The validity of an e-way bill is 24 hours. The government may extend the e-way bill if a truck is held up at a warehouse for more than 24 hours. “It may be treated as an extraordinary situation if a truck needs to be stopped for one or two days at a warehouse. That period could be excluded,” the official added. A slowdown in the collection of GST had prompted the council to advance the roll-out of the e-way bill for interstate movement of goods to February 1 and for intra-state carriage to June 1. However, the interstate e-way bill had to be deferred on the first day of its implementation because the portal crashed.

Six-month extension to GSTR-3B

The full-fledged meeting, instead of video-conferencing planned earlier, is likely to extend the summarised return form GSTR-3B requirement by six months. In November, the council had extended the GSTR-3B till March 31 in order to ease compliance. This suggests that the new return filing mechanism, to be finalised by the council on Saturday, may take a while to be implemented.

“The industry finds Form 3B simple and it has been quite effective in tracking the monthly state-wise numbers, whereas other returns have encountered technical issues.  Therefore, extension of Form 3B will not be surprising. The government would perhaps want to do away with this only after the new system of return filing, being currently worked upon, stabilises,” said Jain of PwC India. The council will also discuss a mechanism for invoice-matching and filing returns. It will discuss a single-stage return process replacing three returns — GSTR 1, 2, 3 and the summarised return GSTR-3B. Invoice-matching may be done at the seller-purchaser level offline, as proposed by Infosys Chairman Nandan Nilekani. According to the proposal, the seller will upload invoices, which will be acknowledged by the purchaser. The system essentially puts the onus on the seller.

The ministerial group led by Modi could not come up with a consensus on invoice-matching. 

Under the earlier system, returns filed under forms such as GSTR-1 (sales) and GSTR-2 (purchase) were automatically matched with GSTR-3 to ensure that the claims made by the taxpayer were correct. Currently, taxpayers are filing GSTR-3B and GSTR-1 and claiming input tax credit.