Some facts about logistics industry in India

Given the complex structure the transport industry ends up
spending 30-64% of its time and resources on tax compliance, out of which
nearly 16% of its time is spent by the trucks queuing up at interstate check
points for tracking and inspection according to a report by ministry of road
transport and highways.

A truck in India covers an annual average distance of 85,000
km as compared to 1,50,000 to 2,00,000 km in advanced countries which pose a
clear indication that our logistics industry needs some reforms. Now the
introduction of GST is expected to increase the need for integrated logistics
arrangements as companies decrease the number of warehouses they keep up in
different states. The changes achieved by GST are likewise expected to solve
one of the significant problems this sector faces – the inter-state transport
of goods without the hassle of documentation and long holding up queues at
check posts. The GST Council and CBEC’s answer to this problem is the GST E way
Bills which will replace the waybills and transport bills that transport
companies use today.

Compliance related to E-Way bill

 

Compliance has been the bane of the Indian logistics
industry for some time now. The waybills obtained currently from VAT
authorities are famous for restricting movement of goods crosswise over states.
While e-way bills should help in free-stream of goods, it does not mean that
transporters don’t need to take after rules anymore. The CBEC has already
released a detailed guideline on the use of e-way bills which drill down the
accompanying compliances:

 

ü 
A new e-way bill must be generated whenever the
mode of transport of a consignment is changed.

 

ü 
When more than one consignment is transported
crosswise over state borders, the serial number for the e-way bill associated
with each consignment must be indicated on the regular entrance.

 

ü 
E-way bills generated for goods not transported
must be canceled inside 24 hours. They can’t be canceled if verified amid
travel.

 

ü 
Recipient of the consignment must accept or
reject the bills. The system will assume the bill has been accepted if no
alternate correspondence is provided inside 72 hours.

 

ü 
The person-in-charge of the conveyance must
convey certain documents, for example, the invoice or bill of supply for
verification.

 

ü 
The transporter can likewise convey the details
of the e-way bill on a RFID device (Radio Frequency Identification Device).

 

ü 
Physical verification of the consignment should
be possible if there is any ‘specific data’ relating to tax avoidance or some other
malpractice. Otherwise, goods once verified can continue unimpeded through the
rest of the journey.

 

ü 
Verifying officers would need to present a
rundown of inspection inside 3 days of verifying a consignment.

 

ü 
Transporters will have the privilege to transfer
queries on the GSTN entrance if their vehicle is detained for more than 30
minutes without substantial reason.

 

ü 
E-way bills will be substantial just for certain
period of time

Impact of e-way bill on logistics industry

Let us toss some light on the effect of e-way bill on the
logistics industry. the e-way bill recording promises better revenue utilizing
the benefits of Information Technology. It is additionally expected that the
E-way bill mechanism would be an effective instrument to track movement of
goods and check tax avoidance and will ensure that goods being transported
follow the GST Law.

 

The E-Way Bill promises multiple benefits for the
transporters. The advantages of E-Way Billing can be summarized along these
lines:

 

Reduce Documentation – All the existing state-wise
documentation required for movement of goods will never again be required.
Another beneficial alternative that is available for the transporters is the establishment
of RFID device in the vehicle used to transport consignments on a regular
premise. The person in charge of the vehicle never again needs to convey
physical copies as the device is attached to the vehicle and the e-way bill can
be mapped and verified through the device itself.

 

Quicker movement of Consignment – Another huge advantage of
E-Way Billing will be the removal of the large number of check-posts crosswise
over state borders and national highways, resulting in ease of movement of
goods.

 

Reduced Logistics Cost – E-Way Bill would reinforce proper
invoicing and along these lines would reduce tax avoidances. In the longer run
this bill is expected to reduce our Logistic cost to GDP proportion, which is
currently very high when compared to other countries.

 

Disadvantage of E-way Bill

However there are some bottlenecks which are issues of
concern for the logistics industry. Putting the disadvantages of E-Way Billing
in a nutshell we have :

 

Accessibility to IT
Infrastructure – Small transporters especially from provincial areas will
face trouble in securing access to GSTN gateway for generating the e-way bill.
The government now faces the mammoth assignment of ensuring that all
transporters enormous or little from country or urban areas do have access to internet
even in a hurry.

Unless an organization has the IT system to help and
generate way bills in real time, it will be a huge issue. We have very less
time to get the necessary infrastructure up

 

Strict timelines for
legitimacy of e-way bills. The guidelines lied for E-Way legitimacy have
been remarked to be unrealistic by some industry experts. For example an e-way
bill generated for a distance of 1000 kms is substantial just for ten days from
the date on which it is generated. However research indicates that the average
speed of Indian truck drivers is 20-40 km/hour, and the average distance
covered every day is 250-400 kms. Moreover when heavy machinery like a Boiler
or huge equipment like breeze process blades are transported on a specialized
truck, the number of days it might take for it to cover 500 km can be
significantly more than 10 days.

 

Keeping up multiple
bills – E-commerce retailers use several modes of transport to ensure that
goods reach the customers from the warehouse or the manufacturer’s area on
time. Since a fresh e-way bill must be generated every time the mode of
transport is changed E-com will definitely end up generating a large number of
bills for every shipment.

 

Potential delays in
generating e-way bills – Many a times customers end up canceling orders
even while the goods are in travel, or return goods already purchased. Fresh
e-way bills have to be generated each time this happens. This poses an issue
for E-com retailers who use outsider logistics. They will be able to generate
e-way bills simply after the transporter additionally transfers details on the
GSTN, which can cause potential delays in shipment.

 

Summing up, we find that there are expected positive effect
of e-way bill and furthermore visible loopholes in the realization of the
vision of the bill. At this juncture when the e-bill is in the genesis stage,
it will be too soon to reach a determination with reference to whether the
advantages of e-way bill outweigh disadvantages or vice-versa. Implementation
is the key and that would decide what e-way bill would end up being!!