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E- Way bill
Context:
- In August, a record 105.4 million e-way bills (electronic permits for goods shipment) were generated for goods transported within and across states, reflecting a 13% increase year-on-year.
- This rise indicates a boost in manufacturing and trading activities.
About E- way bill
- The Electronic Way Bill (E-Way Bill) is a digital document generated under the Goods and Services Tax (GST) system in India. It aims to track the movement of goods in real time and ensure compliance with GST regulations.
- It includes key details such as the names of the consignor (sender) and consignee (receiver), the origin and destination of the consignment, and its route.
- The E-Way Bill is mandatory for transporting goods valued at over ₹50,000 and must be generated prior to the commencement of the transport.
- This system replaces the earlier physical Waybill used in the VAT regime, making it easier to manage, track, and enforce the taxation process.
Significance of Record E-Way Bill Generation:
- Economic Growth Indicators: The rise in intra-state and inter-state transactions highlights broad-based economic growth, benefiting sectors like manufacturing and retail through expanded market opportunities.
- Increased Business Activity: The surge in e-way bills signals heightened business activities and improved goods movement, aligning with India’s economic recovery and expansion.
- Enhanced GST Compliance: The growth in e-way bill generation reflects stronger adherence to GST regulations, indicating improved business compliance.
- Advancements in GST Infrastructure: The consistent increase in e-way bills is partly due to advancements in GST infrastructure and more rigorous enforcement of compliance measures.
Key Impacts of the e-Way Bill System:
- Reduction in Transit Time: Physical checkposts were eliminated, cutting transit time by 15-20%, according to IFTRT.
- A truck from Delhi to Mumbai now saves 2-3 days in transit.
- Enhanced Compliance and Tax Revenue: Real-time tracking reduced tax evasion, pushing GST collections to ₹2.1 lakh crore in January 2022. Authorities use the system to detect mismatches between e-Way Bills and tax returns, curbing fraud.
- Tamil Nadu saw a 15% tax revenue increase in the first six months after the e-Way Bill implementation, highlighting its role in improving compliance and reducing tax evasion.
- Improved Logistics and Supply Chain Efficiency: Automation of documentation has sped up deliveries. Companies like Flipkart and Amazon report significant gains in logistics, leading to cost savings and higher customer satisfaction.
- Real-Time Tracking: Businesses in FMCG and e-commerce now have better visibility over their shipments, improving inventory management and accountability.
- Standardisation Across States: The system has unified goods movement procedures across states, replacing previous state-specific forms and simplifying compliance.
- Integration with Other Systems: Integration with FASTag and Vahan systems has further reduced delays by automating toll payments, enhancing overall transit efficiency by 10-15%.
- Boost to Formalisation: GST compliance has formalised businesses, increasing GST registrations from 6.5 million in 2017 to 13.5 million by 2021, according to NSSO.