Introduction

With over 28 states and 8 union territories in India, the logistics and transportation was mired with several bureaucratic procedures that made inter-state movement of goods quite difficult. The introduction of the e-way bill was a welcome move as it did away with many of the tedious verification mechanisms that hindered inter-state movements. Hence the logistics industry in India is expected to grow rapidly by implementation of the e-way bill as it helps transporters save money and time.

To understand the significance of the E-Way bill and the true extent of the impact it has on the Indian transportation/logistics landscape, we must first learn what it is and how it replaces the old system.

The e-way bill (electronic way bill) is a license/document that is required to be able to facilitate the movement of goods. Any party who is registered with the GST council is mandated to generate an e-way bill if they undertake transportation of goods whose value exceeds Rs. 50,000.

The new e-way bill mechanism was introduced on April 1, 2018 and serves as an alternate method of compliance that would encourage self-reporting by the businesses. 

Advantages of E-way Bill for the Logistic Industry

  • Ease of Use

The e-way bill is designed for ease of use. One can either generate the e-way bill on ewaybill.gov.in. Furthermore, it can also be generated and canceled via SMS, through a dedicated Android app and by site-to-site integration through their proprietary APIs. It’s important to note that the e-way bill number (EBN) is unique and upon generation, is allocated and made available to all three parties: the seller/consignor, the recipient and the transporter.

While the transporter is required to possess a physical form for the delivery of goods, a good chunk of the process is done through software, thereby leaving a digital trail. This not only makes the process seamless, but also introduces a degree of transparency that didn’t exist under the earlier VAT/CST regime.

  • Curbing Tax Evasion

Upon its introduction, the e-way bill mechanism attracted a lot of attention and debate. The government designed the system to safeguard its revenues. The e-way bill ensures that relevant information pertaining to the movement of a consignment is accounted for. This applies to both inter-state as well as intra-state movements.

By automating the routine/clerical tasks and by standardising the entire process, the government is positive that it can establish a foolproof system that will do away with tax evasion and help achieve its goal of increased GST collections. For the logistics industry, the e-way bill brings in a level of transparency that would increase its credibility.

  • Digital Transformation

Like most legacy systems in India, the logistics industry continues to operate on vastly outdated systems that seek to hinder meaningful commerce. The introduction of automated systems, with help from the government, enables the industry to begin its journey towards implementing technology to assist in its operations.

With the rise of IoT (internet of things) and other geo-spatial technologies, the logistics industry is slowly moving towards implementing tech-driven interventions across operations to eliminate any and all redundancies. 

  • Ease of Doing Business (EoDB)

The eway bill effectively dissolves the rigidity of state borders in terms of paperwork. This makes doing business across the state much less complicated and is bound to drive up commercial activity across the length and breadth of the state. Since the transportation/logistics industry facilities all of this movement, firms in this space can expect to see an uptick in demand, and consequently their revenues.

A reduction in time, as well as costs will also add to their bottom-line as companies can spend less time on paperwork and more time on implementing their services. In time, this could even contribute to India jumping up in the Ease of doing business rankings!

Conclusion

The e-way bill has many things going for it: increased transparency, increasing efficiency and more effective tracking. In terms of impact, the e-way bill is a disruptive force that has altered the way logistics and transportation companies operate. Learning how to generate an e-way bill will enable you to transact more effectively across state borders. If you are looking to expand your business with a business loan, look no further than Finserv MARKETS. Along with a simple and hassle-free application process, you also get to have flexible repayment terms, great deals, swap options and other top-up options. You can also avail protection plans to de-risk your business.

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