Traders ditch motor vehicles to skirt e-way bill rules: report

The trading community in India, long used to evasive tactics when it comes to paying taxes, is now reported to be using horse-carts or hand carts to avoid GST when transporting goods across states, as the e-way bill is applicable only for motorised vehicles.

Citing instances in Ludhiana in Punjab, where goods like construction materials and furniture (sofa sets) are transported on horse-carts, after the introduction of the intra-state e-way bill system from 1 June, the report said they were already engaging in bogus billing much before the e-way bill system came into effect.
Traders are making use of the provision in the GST rules that an e-way bill is not required if goods are transported by a non-motorised carriage such as horse-carts. Traders, reportedly, also use this loophole to transport goods beyond the exemption limit of less than Rs50,000 in value.
E-way bill is also not required for movement of certain class of goods like fruits, vegetables, fish and water, according to GSTN, the company that handles the technology backbone for GST.
The e-way bill is an online generated document required when goods are transported from one place to another or from one state to another under the Goods and Services Tax (GST).
E-way bill that replaces a number of road permits, statutory forms, transit pass requirements and delivery challans, can be generated online through GSTN’s official website or mobile App.
The e-way bill system is applicable only to transportation of goods beyond 10 km and valued over Rs50,000. Such goods to be transported beyond the 10-km limit should also have to be pre-registered.
While the e-way bill mechanism has been introduced in the GST regime to plug tax evasion loopholes, Indian traders are more ingenious in finding ways to skirt the rules and defeat the system.