E-way bill credited for higher GST revenue

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The introduction of e-way bill system appears to have led to better tax compliance when it comes to revenue generation through the goods and services tax in Bihar. At least the revenue collection in the first three months of the current fiscal (April-June) suggests so.

According to data compiled by the commercial taxes department, the average monthly revenue generated in the first three months stands at around Rs 1,100 crore, whereas the corresponding figure in the previous fiscal, when the e-way bill system had not been put in place, was around Rs 945 crore. In addition to the GST revenue, states are also given compensation from the Centre every two months if the revenue growth is not at the desired level.

According to the provisions of the GST Act, the Centre has committed to ensure 14 per cent annual increase in tax revenue of the state than what it was in the year preceding the GST introduction and in case the desired growth percentage does not happen, the Centre would compensate the amount. In case any state witnesses more than 14 per cent growth in tax revenue, the additional money would lie with the state. The compensation system will remain in place for five years.

The e-way bill system was introduced from April this year.

According to its norms, traders need to generate e-way bill for intra-state transportation of goods if their value is Rs 2 lakh or more, whereas in case of inter-state trade, the document is required for transportation of goods worth Rs 50,000 or more.

“Introduction of e-way bill system is working as a deterrent for those who used to transport goods to the state without proper documents. Now, they fear action as the e-way bill can be checked by the authorities concerned of any state through which the goods pass before reaching Bihar,” said a state commercial taxes department official.

He maintained that generation of e-way bill leads to entry of traded goods in the GST data and thus, chances of tax evasion get nullified.

The official pointed out that even the quality of tax returns filed by the traders had improved a lot and unlike the initial months of the GST regime, introduced in July last year, when many of the returns used to have incomplete information, the returns traders and businessmen are filing now have complete information leading to better tax compliance.

There are around 3.25 lakh registered traders in Bihar of which around 65 per cent are now filing GST returns regularly.

As far as revenue generation by the commercial taxes department is concerned, the state aims at generating around Rs 25,000 crore in 2018-19, almost Rs 5,000 crore more than the previous fiscal.

In 2017-18, the department had generated a revenue of Rs 20,277 crore that included Rs 3,041 crore compensation it got from the Centre and Rs 5,874 crore commercial taxes that came from non-GST items such as petroleum products.