JOIN USIs there a short-cut way to understand all the nuances of the Goods and Service Tax (GST)? Yes. Just learn to fill in all the forms that are prescribed in the GST rules.
The above answer may actually turn out to be true, because the draft GST rules prescribe a form for every possible act done by a taxpayer.
E-way bill rules: A look at the draft e-way bill rules proves this point. Let us assume that a taxpayer is shipping goods from Bengaluru to Delhi. Before the truck moves, he is supposed to fill in Part A of Form GST INS-01 electronically on the common portal. The e-way bill is in the form of Form GST INS-1. Either the taxpayer or the transporter can get GST INS-1 by filling in Part B of GST INS-01. In summary, the rules state that a taxpayer needs to fill in both parts of GST INS-01 to get the e-way bill in form GST INS-1.
It is obvious that the form numbers are going to create a lot of confusion and would need to be changed. The e-way bill need not have a number — it can just be called GST (e-way bill) and can be numbered in a sequence generated by the portal.
The number may not have much relevance, because for every form uploaded, a unique e-way bill number (EBN) will be generated by the portal. Where multiple consignments are intended to be transported in one conveyance, the transporter shall indicate the serial number of e-way bills generated in respect of each such consignment electronically on the common portal and a consolidated e-way bill in Form GST INS-02 shall be generated by him on the common portal prior to the movement of goods.
There was talk of check posts being removed in the GST era, but the rules give details of inspection of goods in transit. In case the truck moving from Bengaluru to Delhi is inspected in Nagpur, a summary report shall be recorded online by the proper officer in Part A of Form GST INS-03 within 24 hours of inspection and the final report in Part B of Form GST INS-03 shall be recorded within three days of the inspection. In case the vehicle has been detained in Nagpur for a period exceeding 30 minutes, the transporter may upload the said information in Form GST INS-04 on the common portal.
One wonders how the transporter is going to upload the form from the roads of Nagpur. Hence, even before the truck reaches Delhi, four forms need to be filed on the common portal.
The rules mention that it is mandatory to obtain an e-way bill for consignments in excess of Rs 50,000, but there is an option for consignments below this threshold to obtain e-way bills.
Multiplicity of forms can be avoided if the inspection reports are made a part of the e-way bill itself. The e-way bills have a shelf life depending on the distance to be covered. The rules suggest that every truck should cover a minimum of 100 kms every day in the GST era.
Too many forms
The person in charge of carrying the goods shall carry along with him an invoice in Form GST INV-1 and the e-way bill. The e-way bill can be carried either in person or through Radio Frequency Identification Tag (RFID), which will be embedded on to the conveyance. The RFID readers will be installed at places where verification of movement of goods is required to be carried out, and it shall be done through RFID readers where the e-way bill has been mapped with RFID.
The rules also state that where the physical verification of goods being transported has been done during transit within the state, no further physical verification of the conveyance shall be carried out again in the same state, unless specific information relating to evasion of tax is made available subsequently.
In the case being discussed, since our truck moving from Bengaluru to Delhi has been verified in Nagpur, no further verification maybe done in Maharashtra. But another inspection can be done in say, Uttar Pradesh.
Since the entire movement of the truck is being mapped on the portal, the rules can simply state that an inspection can be done only once during the entire journey. If the present rules continue, once a defective inspection report has been filed by the officer in Nagpur, the officer in Agra may want to inspect the truck again just to extract his pound of flesh.
Where an e-way bill has been generated under this rule, but goods are either not being transported or are not being transported as per the details furnished in the e-way bill, the e-way bill may be cancelled electronically on the common portal within 24 hours of generation. The only catch here is that an e-way bill cannot be cancelled if it has been verified in transit.
It is obvious that apart from training finance personnel, suppliers, vendors and the information technology department in the rules, even truck drivers would have to know the basics of GST to have a discussion with any officer who stops their trucks for inspection.
The manner in which the GST rules provide for uploading a form on the common portal for every small event, every company should have dedicated resources who will always be on the GST portal. Consequently, the traffic on the portal is going to be extremely high, which would warrant that the government takes cognisance of the portal hanging or going extremely slow. Due to this, costs of compliance are going to increase in the GST era which could impact small enterprises adversely.
The only thing that the draftsmen have not thought of, is to devise a form that gives information about all the other forms filed by an entity.
(The writer is a Bengaluru-based tax expert)