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E-Way Bill Will be Mandatory from 1 April Under GST

A group of state finance ministers (GoM) couldn’t reach a consensus on the final shape of tax return forms for taxpayers in Goods and Services Tax (GST), as issues related to reconciliation of input tax credit (ITC) remained unresolved. However, the GoM will recommend to the GST Council that inter-state e-way bill be implemented from April 1, Sushil Kumar Modi, Bihar deputy chief minister and head of GoM, said on Saturday. Comprehensive tax return forms and e-way bill, which is an online mechanism for tracking movement of goods, are crucial anti-evasion measures, but their implementation has been waylaid due to technical glitches faced by the GST Network, the IT backbone of GST. Sushil Modi said the GoM considered two main proposals for return forms — one presented by Infosys chairman Nandan Nilekani and the other prepared by a committee of tax officials. Modi said there was consensus on having a single return form every month and that credit claims by buyers and sellers should be matched.

However, there was a divergence on whether provisional input credit tax should be allowed and whether credit reconciliation should happen along with tax payment. Nilekani’s version of returns has batted for allowing ITC in real time when an invoice is uploaded by a seller and approved by a buyer. The officials’ committee, on the other hand, wants that credit conciliation should happen at the time of tax payment. Originally, the GST Council had implemented triplicate comprehensive forms that required sellers to upload invoices, which would then be matched by buyers for availing ITC. Modi said the GoM would try to marry elements of different proposals before recommending the final version to the GST Council , which is expected to meet on March 10. Official sources said there was a possibility of collusion among businesses if Nandan Nilekani’s proposal of real time invoice-matching is approved. On the e-way bill front, Modi said necessary strengthening of the system was being done after the portal crashed on the first day of its implementation on February 1. He added that requirement for intra-state movement of goods of more than Rs 50,000 value would be introduced in phases after assessing the response for inter-state movement.

He said the e-way bill system would be able to handle generation of up to 50 lakh bills daily. E-way bill is an electronic way bill for movement of goods which can be generated on the GSTN (common portal). Movement of goods of more than Rs 50,000 in value cannot be made by a registered person without an e-way bill. The e-way bill can also be generated or cancelled through SMS. When an e-way bill is generated, a unique e-way bill number (EBN) is allocated and is available to the supplier, recipient, and the transporter. “The recommendation of a phased launch of the e-way bill will enable businesses to become ready over a period of time and will give time to the GSTN to overcome glitches that arise during the initial phase. The fact that the GOM requires more deliberations on the issue of simplifying returns indicates that there is an attempt to retain fundamental features such as invoice matching and input tax credit tracking, while making the return process easier for taxpayers,” MS Mani, senior director, Deloitte India, said. These two measures are expected to accrue an additional Rs 10,000 crore monthly to GST collections by way of plugging existing leaks in revenue collection.

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