E-way bill may fail to deliver the goods, fear etail firms
With days left for the rollout of the intra-state e-way bill on February 1, several logistics and ecommerce companies are seeking clarifications on the new system, fearing operational inefficiencies and supply-chain disruptions. These companies have written to GST Council, particularly seeking clarity on a notification regarding a second layer of e-way bill generation for goods valued at less than Rs 50,000 — a range that accounts for abulk of all ecommerce shipments.
The e-way bill is an electronic permit with detailed information on the goods being transported. “In such cases where the consignor has not generated the e-way bill, and the value of that shipment exceeds Rs 50,000, the transporter is obligated to generate e-way bill based on invoice, bill of supply, or delivery challan provided by the consignor,” the companies have said in their letter, which EThas reviewed.
Ecommerce firms fear a massive load on operational efficiencies and undue delays in delivery if an additional generation of the e-way bill, beyond the one done at the origin, is to be implemented, given that at least 70% of ecommerce orders are priced below Rs 50,000. “Operationally, since consignors would not be required to create eway bills if their individual shipment is below ?50,000, e-way bills would need to be generated on the spot when transporter comes to pick up shipment, ” the companies have written.
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“Several small shipments during pickup would mean transporter would have to spend time generating several e-way bills on the spot. This would put a severe strain on operations, increase cases of faulty declarations, and lead to considerable delays,” the letter said.
While the Central Board of Excise and Customs has issued an FAQ clarifying that a second e-way bill in case of smaller consignments would not be necessary, the clarification has failed to be recognised on ground with states such as Karnataka and Maharashtra continuing to seek generation of the bill from transporters at state borders.
It will stall the entire delivery process for the ecommerce sector where a bulk of the orders are under the Rs 50,000 mark. Our logistics partners are now refusing to take on deliveries for consignments less than Rs 50,000 without e-way bill at origin,” said a senior executive at a leading ecommerce firm.
Experts believe the problem, while impacting several industries, will be most crucial for ecommerce companies given their short delivery timelines for lowticket items. “The FAQ clarifies it but the problem is evidently in the implementation on ground,” said Manish Saigal, managing director at logistics consulting firm Alvarez & Marsal. “In my view, the underlined e-way bills that are being carried in the truck are sufficient for the purpose of reconciliation and there is no need for a transporter to have another eway bill.”
Experts believe the exemption for goods valued below Rs 50,000 was introduced to help the ecommerce industry and a bill requiring modifications and additional generations through the several layers of transportation will defeat the benefit envisaged for these companies. Ecommerce firms including Flipkart, Amazon, Paytm Mall and Snapdeal, which also undertake shipping on behalf of several merchants, are likely to lose that benefit if the e-way bill implementation is not de-weeded.
“We are seeking clarity if we can also generate e-way bills on behalf of the seller and if our courier partners can generate the Part-A (at origin) of the e-way bill,” Amit Sinha, chief operating officer at Paytm Mall, told ET. “We believe the best way forward is to either allow ecommerce operators to generate e-way bill Part-A or allow the logistics partner to generate both parts of the e-way bill. This way, the seller will not be impacted with additional operational burden.”
Logistics companies believe a large part of the problem can be solved with prudent adoption and use of technology at all levels of the transportation system. “E-way bills in the past have had very limited application, at best about 10% of shipments. Now they will have to generate this at scale. So the government needs to make this very scalable as a process,” said Rajesh Yabaji, chief executive of logistics firm Blackbuck, which has launched a website to enable this transition of the logistics industry into the e-way bill regime.
Ecommerce firms, in their letter to the GST Council, have also sought on-ground support in the form of a dedicated officer in each circle of every state, to whom a transporter can reach out to and inform when technology-related issues create challenges for e-way bill generation. This, they believe, will help significantly trim down teething troubles when the bill is implemented.
The Economic Times, New Delhi, 03rd March 2018