Peddled as an anti-evasive measure, the government hopes that the E-way bill system will help boost tax collections by clamping down on trade that currently happens on cash basis. After the roll out of e-way bill, transporters need not visit any tax office or check posts for permits. Here's getting first-hand insights from the industry players as to how's the scenario post e-way bill and the progression ahead…
The logistics market in India is expected to be worth US$370 billion by 2022. India spends around 14-15% of its GDP on logistics and transportation as compared to 7-8% by developed nations. The sector is expected to grow at a CAGR of 15-18 % between FY19-22. The logistics cost remains a worrying factor due to the regulatory and tax structure challenges in the country. The increase in the number of un-organized players, tax evasions and inefficiencies in the use of technology has been impacting the logistics service providers. In order to circumvent the issue, the e-way bill was introduced to replace the earlier existing. Way bills to curb tax evasions.
The implementation of the e-way bill nationally, from June 1, 2018, has been a positive move in promoting the organized sector and consequently the growth of the organized logistics sector. There is a visible growth in the GST revenues during the month of April and May, which highlighted how the e-way bill has helped in curbing tax evasion. However, the growth is still below expectations. For the organized players in the logistics industry, the implementation of the e-way bill has helped in reducing the delivery time of freight and transportation cost. The integration of the FASTag and RFiD onto the bill, will further lead to a reduction in the dwell time of the trucks at the toll booths. The bill can significantly help in reducing the unorganized trade as the focus of the administration goes into engaging the potential defaulters directly.
According to Divyansh Rathore, VP – Operations, Future Supply Chain Solutions, the major impact of e-way bill has been:
Less Documentation: E-way bill has restricted the need for physical documentation. All the state-wise documentation, that were required earlier, for the movement of goods are not needed.
Cost Reduction: E-way bill has reduced cost. It reinforces proper invoicing and along these lines has reduced tax avoidance.
Efficient Transportation: It has increased efficiency and speed of transportation. A truck in India covers an annual average distance of 120,000 km as compared to 2,50,000 to 3,00,000 km in developed countries, which pose a clear indication that our transportation systems needs some reforms. It has helped to reform the industry. The average number of days for transportation from Delhi to Chennai has reduced by 1-2 days. This is a significant number. The transporters, thus, can manage their businesses with a smaller fleet. There is no waiting time at check post and faster movement of goods, thereby optimum use of resources.
E-way bill roll out can speed up delivery of online orders: This is a big boost for e-commerce industry. Average online shopper may expect a shorter delivery time as transporters now will not need to visit any tax office or check posts for permits. The various permits required for inter-state and intra-state movement of goods used to take up as much as 18 per cent of the time taken for an online delivery to reach consumers. With e-way bill in place, the shipments can be delivered in much less time.
E-way bill system is extremely important, both for the government as well as the logistics industry. While the government expects the GST collections to significantly improve, the industry hopes that adequate attention is given to critical issues, including portal reliability, technical challenges, etc. From the industry standpoint, it requires meticulous planning and execution to gear up for the compliances as any lapse could lead to a supply chain disruption.
According to Dr Arunachalam R, CEO, ProConnect Supply Chain Solutions, E-way bill has brought in more transparency in transactions. It has eased vehicular movements due to no / limited check post and has resulted in the effective utilization of trucks due to better turn-around time (TAT). Post the e-way bill implementation, the changed dynamics would result in better truck utilization as it is slated to bring bigger efficient trucks into the fray – 40’ multiple trailers. Warehouse consolidation due to GST will result in more load consolidation driving more of FTL loads. As far as our customers are concerned, compliance wise all are cooperating well. While there are teething challenges in generation of e-waybill in terms of time, migration to automated generation through Suvidha providers will aid in resolving the complexities.
Anjani Mandal, CEO & Co-founder, Fortigo Network says, the e-way bills are fairly easy to prepare. This has offered greater accessibility for all the stakeholders including the supplier, the receiver and the 3PL players. Further, the simplification of the bill has also helped the drivers in understanding the necessity of the bill. The organized sector is well adapted to it and most of the players who handle it prepare the e-way bill by default. The uniform implementation of the bill, nationally, across each state has helped in avoiding the erstwhile challenges of visibility, where consignors having shipments from multiple states had to keep track of the intra-state movement, especially in places where the bill was required.
The linkage of e-way bill to a truck’s FASTag number is now available at the check-posts, but it is still necessary for the truck to halt, as the linkage of RFID to the check-post system and thereafter and an advance intimation of go / no-go, is still not present. The government has worked really hard to simplify the mechanism. This has also helped in making compliance easier for the stakeholders in the sector, including transporters, fleet owners and transportation companies. The implementation of the e-way bill has significantly helped in reducing the halt time at check posts, thereby improving the efficiency of the sector. This has also led to an increase in the overall demand for the movement of freight for various economic activities by the organized logistics service providers. Furthermore, the sooner the clamp down by government on the non-compliant movement, the faster the organized players will grow, and the unorganized players will move to the organized sector.
Jasjit Sethi, CEO, TCI Supply Chain Solutions shares, the GST & e-way bill combination is a great effort taken for changing the existing logistics scenario. An e-way bill is in fact the underpinning of GST, which talks about the seamless movement of goods & services. In the pre-GST era, logistics was affected highly due to complex tax structure & multiple checks at borders. To complement the GST implementation, which has come up as ‘One Nation, One Tax’ and suggested uniform rule throughout the country, the e-way bill was introduced. The E-Way bill promises multiple benefits for the transporters, mainly for those in the organized sector. Few of the positive changes include quicker movement of goods with the removal of the large number of check-posts across state borders and national highways, resulting in ease of movement of goods & less congestion at borders, along with less consumption of diesel at border. It can be touted as an anti-tax evasion measure, as it will reinforce proper invoicing & hence there will be less corruption & bribery. All our large clients are well aware about e-way bill and they have a good option of bulk upload of EWB- 01- Part A and B, through a JSON file. Our in-house ERP is developed & linked with GSP’s (GST Suvidha Providers) directly through API and if our consignment data shows a gap from that generated by customer (E.g.: Missing Vehicle Number or Consignment Note), we make the necessary updations in PART B. Also, for few customers who are unable to generate e-way bill, we are providing support by generating e-way bill for them and/or making the same bill though our mobile App.