Transportation and logistics is an integral part of the supply chain for many businesses. Until the E-way Bill system was announced in 2018, companies faced multiple problems like incorrect cargo status information, stolen goods, illegitimate distribution channels and checkpoint delays. However, since the introduction of the E-way Bill system, goods transport has streamlined for many. Companies are experiencing benefits in the form of reduced documentation, avoiding revenue slippages at multiple state checkpoints and faster checkpoint clearances resulting in a smooth supply chain.
And over the years, the government is tightening the ropes around tax evaders by introducing rules like 138E etc where E-way bill generation is getting blocked on non-filing of GST Returns.
It can rightly be said that the e-way bill system is no more in silos. With RFID, VAHAN, FASTag, GSTR 1 matching and E-invoicing coming into the picture, the E-way bill has become an important document and hence the businesses need to consciously define their long-term strategies around E-way Bill Management.
Let us understand the importance of all these components and their relation with E-way Bill…
RFID stands for Radio Frequency Identification Device and it uses radio waves to identify objects. A transporter needs to obtain the RFID Tag and can get it embedded at a pre-specified location which is typically on the windscreen of the vehicle which he/she is using to transport the goods. This tag will have the details of E-way Bills fed into it and when the vehicle passes the RFID Tag reader on the highway, the reader will be able to read and identify the EWB details and the vehicle details. The same will get uploaded on the government portal directly. In several states, it is compulsory to have RFID for commercial vehicles.
RFID helps companies to track their entire supply chain easily. With the help of an uninterrupted supply chain, they can identify missing goods instantly. RFID systems can also help in eCommerce.
FASTag is an easy to use and rechargeable tag that a user can stick on the windscreen of their vehicle. These tags can be detected from 25 metres away using Radio Frequency Identification (RFID). Once detected, toll plazas can automatically deduct the toll charges from the traveller’s/ transporter’s e-wallet, without halting the vehicle for any transaction.
Integration of E-way bill with FASTag will help revenue authorities track the movement of vehicles and ensure that they are travelling to the same destination as the transporter or the trader had specified while generating the e-way bill.
It will also help the suppliers locate the goods through the e-way bill system. Transporters, too, would be able to track their vehicles through SMS alerts that would be generated at each toll plaza. FasTag also saves a lot of time as there is no waiting at the toll plaza and all the transactions are cashless. This benefits the companies as their deliveries are faster and transparent when it comes to monetary transactions.
3. VAHAN system:
VAHAN is an initiative by the Ministry of Road Transport and Highways and acts as a central repository for important information regarding all the registered vehicles. It is a national register for all registered vehicles. The parameters for details with respect to the registered vehicles are- Registration number of the vehicle, the Chassis number and the Engine number.
With the VAHAN system, one can carry out important services including vehicle registration, renewal of permits, calculation and payment of state road taxes, issuance and settlement of challan to name a few.
The e-way bill portal and the VAHAN system have been integrated. With this integration, the officials can now validate the vehicle’s registration number while preparing an e-way bill.
4. E-way Bill and E-invoicing:
The e-invoicing mandate went Live in October 2020 and this has further streamlined the generation of the E-way Bill. Now, the Invoice Registration Portal can be used not only to generate IRN for e-invoices but also E-way bills, for the documents which qualify. Thus, depending on the data sent, the IRP system will return IRN or E-way Bill Number or both. Read more about e-invoicing and e-way bill pairing.
Having the same portal for generating both documents has simplified the process for taxpayers. As they are not required to hop between multiple platforms. As the two platforms have a common denominator, matching invoices at a later stage is also easy.
IRIS GST helps you with Reconciliation of E-way bill with GSTR1, ITC 04 and other dispatches
The information furnished in Part A of the E-way Bill is made available to the registered taxpayer (supplier) on the common portal who may utilize the same for furnishing details in GSTR 1. While GSTR1 is essentially a detailed report on all of your outward supplies, E-way Bill is a sub-set of the GSTR 1 carrying details of only those outward supplies where there is the movement of goods over and above a threshold limit. Also, there can be a scenario where an e-way Bill needs to be generated for the movement of goods on delivery challans and other dispatches, but these supplies do not find their way directly in terms of “value reported” in GSTR1, so Importing Your E-way Bills into GSTR-1 – learn how you can prepare.
E-way bill generated on Delivery Challan and Other Dispatches can also be reconciled through ITC 04 and by uploading other dispatch transactions on IRIS GST portal.
Impact of these E-way Bill integrations on taxpayers/transporters:
Following are the precautions/measures or activities related to these EWB integrations that registered people/taxpayers need to carry out:
- Taxpayers/transporter need to be more cautious while transporting the goods with the help of commercial vehicles via highways. There are some key responsibilities of a transporter that he must adhere to while transporting the goods.
Ø A commercial vehicle must not deviate from the route despite having an e-way bill.
Ø Commercial Vehicles in which goods are being transported (mentioned in the e-way bill) must not have critical goods with it.
Ø Any variation in the compliance of e-way bill procedures may lead to the introspection of vehicles.
- Taxpayers/transporters need to be up to date with all the latest GST and E-way Bill system law changes and updates while generating E-way Bill
- Reconciliation of E-way bill data and outward supplies reported in GSTR 1 must be maintained.
- For being extra cautious, taxpayers can prepare an agreement with a clause with the transporter that any deviation and failure to adhere to the EWB integration rules or any consequence due to default of transporter shall be liable for penalty and release of goods.
- The transporter/ registered person must ensure to carry a valid e-way bill and renew the e-way bill timely upon expiry to avoid penalties and confiscations.
The government is taking all the measures to streamline the tracking process via all these integrations. This even helps to curb tax evasion, frauds, and goods are traced easily without chaos and confusion. The taxpayers need to be cautious and aware of these different integrations and adhere to them efficiently as they not only benefit the country and the system but also benefits them. However, non-compliance can attract unwanted penalties. Thus, there has to be a system or a solution in place for taxpayers to take care of all the above-mentioned activities and also maintain a valid E-way Bill at all times if carrying goods.
IRIS Topaz is a smart E-way Bill management system that can help you with it all.
With Topaz, you can plan and manage the entire life cycle of an Eway bill system, right from the generation to updates, rejection and cancellation. IRIS Topaz has been helping our clients with planning and managing their Eway Bills in an easy and automated way, on the go!
It is available to clients in multiple ways – on cloud, as desktop utility, as APIs or even clubbed with e-invoicing solution. The solution caters to the needs of suppliers, and consignors alike. It enables the users to replicate the company’s business hierarchy and E-way bill assignment roles to mimic sales and dispatch processes.