The Transportation & Logistics (T&L) is the backbone of the Supply Chain ecosystem. In India, this industry is projected to grow at 9-10 percent per annum from $115 billion to $360 billion by 2032. However, this projection will hold ground only if the industry is able to quickly adapt to the changing taxation landscape in the country.
Till date, the logistics industry was spending 50-60 percent of its time on tax compliance, inter-state checkpoints manoeuvring, scrutiny, and tracking of inter-state sales tax, etc. So, a new ecosystem was designed for the logistics industry based on the GST (Goods and Services Tax) framework to reduce the overall time spent on tax compliance using technology.
With the lack of system readiness and slow adoption issues by SME’s, the GST council deferred the GST return filing of GSTR2 and GSTR3. In the current GST era, the existing GST forms - GSTR1 and GSTR3B- do not support the invoice-matching requirement, due to which the tax authorities are unable to keep a check on under-invoicing, actual movement of goods and inflated input tax credit claims. With no co-relation present between invoices and actual movement of goods, there is no mechanism available today for the government to plug tax evasion. This has also contributed to the decline in actual tax collection against the budget.
To keep tax evasion under check and better monitor trade, GST Council has decided to launch the E-way Bill.The proposed bill is the first step towards linking the E-way bill information with transaction data in GST return to equip authorities with trade level intelligence and minimize tax evasion.
So, how does this new E-way bill impact the business world?
Stepping into the digital future:
The logistics industry needs to navigate from their current challenges of insufficient integration between the transport network, information technology, warehousing and distribution facilities, and step into the digital future.
Real-time information is critical in setting up the digital business. The E-way bill is a solution to connect all parties of the value chain to one ecosystem -suppliers, transporters, and recipients - to track the movement of goods and check tax evasion. Establishing a direct linkage between what is declared and what is moved, and having a check on manual, repeat data entry in the entire value chain paves the way for efficiencies in the logistics industry. But implementation of these changes brings substantial challenges for the ecosystem.
Similar to the experience with GST portal, taxpayers face availability issues while connecting to the National Informatics Centre (NIC) portal during peak business hours for E-Way Bill processing. However, unlike GST return filing, delay in E-Way bill processing directly affects the movement of goods which can lead to loss in business .Thus, real-time access to NIC’s system for E-Way bill operations is critical for taxpayers and the portal should not be the only channel to rely upon. Also, concerns over security issues relating to data exchange over the internet are impacting business operations.
Corporates with substantial transaction volumes can avoid error-prone manual operations and associated overhead costs with process automation and through integrated access to NIC over different channels. Using end-to-end processing, corporates can integrate their E-way bills data to the invoices raised in their ERP system and track the movement of goods to optimize the overall efficiency of the value chain.
APIs– A Game Changer:
APIs are going to be a key driver in the digital economy. Corporates with an integrated systems strategy will be able to leverage real-time data in the most consumable way and gain a significant competitive advantage.
API based E-Way Bill compliance solution allows speed in exchange of data, live data reporting, real-time data integration, and data security, thus improving the overall customer experience.
For example, with E-Way Bill API calls directly set up between the corporate’s ERP systems and NIC’s E-way Bill System, corporates can directly exchange their data and send bulk invoices through a GST Suvidha Provider to E-way Bill System. With end-to-end automation in the E-way bill processing, data can be extracted directly from the ERP systems with all data validations processed without any human intervention, and data pushed straight out to the E-way Bill System.
The E-way bill is here and corporates need to quickly adopt it into their ecosystem. Are you ready?