The Changing Landscape of E-Way Bills on Logistics

Since past couple of years, the logistics industry has been in limelight and is undergoing the significant transformation to account for various reform initiatives and policy changes. The most prominent reforms included in the introduction of GST have rolled out of –Waybill and the logistics sectors have been granted as infrastructure status. The revenues in Q3FY18 were up to 24.3% at Rs 555.3 crores vs. Rs 446.7 crores in Q3FY17. The Transportation Corporation of India had an extremely good third quarter as the seaways division performance was overwhelmed.

According to the researchers, TCI said that the seaways division performed well due to the addition of ships. Whenever a new ship is added, the revenue growth rises up and so, the objective that becomes a plus point for them is to add ships every 18 months. Therefore, the margins for the seaways division continue to be about 25-30%. Since, the platform operated by the government is good to go for small firms that accounts for about 90% of the entities who generates eWay bills on it, the startups are finding their spots to cater the requirements of larger companies.

What are E-way Bills?

E-Way bill is an electronic way bill for the movements of goods and services which can be generated on the eWay bill portal. Without a eWay bill, the transport of goods for more than 50,000 in value in a vehicle cannot be prepared by the registered person. Alternatively, with the help of SMS, Android App, and site to site integration, the E-Way bills can also be generated or canceled at the same time. Whenever the E-Way is generated, a unique eWay number is allocated and is available to the recipient, transporter, and supplier. For intra-state movement, the e-way bill will be rolled out in the manner that starts from 15th April 2018 and will be covered by all the states till 1st June 2018. The E-Way is applicable for any consignment whose value exceeds with the INR 50,000. 

Impact of E-Way Bills on Logistics

The logistics industry in India is expected to rapidly increase under the GST (Goods & Service Tax), that largely thanks to the reduced checkpoints, warehouse consolidation, and automated technology. It results from the implementation of three-way bills that saves transporters for both, their time and money. While about 50% of the logistics market is driven by the in-house logistics players and the remaining 50% are generally controlled by the third party service providers that include e-commerce-centric logistics providers.

In the context with complex structure, the transport industry ended up to spend around 30-60% of the resources and time on tax compliances, 16% among which was spent on queuing up by the trucks for inspecting and tracking. In India, the truck covers an average distance of about 85,000 km per year as compared to 1,50,000-2,00,000 km in the developed countries that clearly indicates about the drastic reform and change in the logistics industry. With the introduction of GST services, the requirement to integrate logistic arrangements has increased across India.

Merits & Demerits of E-Way Bills on Logistics

There are extreme benefits and disadvantages of the eWay bills on a logistic industry which are described below as:

Merits

·         Reduced Documentation

Since past years, the logistics industry is looking at a substantial reduction in the documentation. The transporters had to prepare the documents or each state they passed through while they are delivering their goods and services.

·         Faster Movement

The adoption of e-way bills will also lead to the mechanism of faster and smoother movements of goods and services. With the removal of a huge number of state borders and national check posts, the vehicle will be detained once in a state.

·         Reduced Cost

There is much reduction in the transportation cost for a long time. Through, more efficient and faster transportation, the logistics industry will see a substantial reduction in fuel and other transport related factors as well.

·         Consolidated Warehouse

Prior to the GST E-Way bills, the companies often had a warehouse in nearly every state so that triggering a new tax every time when the goods are crossed from each state can be avoided. This helps in more strategic locations and further reduces cost.

Demerits

·         Multiple Bills

 Whenever; the mode of transport changes, new e-way bills is generated. This leads to the need to generate the multiple bills for a single consignment. It would be more applicable to e-commerce retailers and courier industry.

·         Increased Cost for Smaller Transports

The small transport may actually see an increase in the cost because they gear up to invest in proper IT infrastructure and the employed personnel who is capable of generating e-way bills. This helps the customers to reduce their cist for smaller transport and not for larger ones.

·         IT Infrastructure

Because the complete e-way bills mechanism is technology driven, the small transporters have May not have the requisite IT infrastructure to generate e-way bills. This can be challenging that pertains to internet connectivity, especially in three-tier rural areas and cities.

Conclusion

The companies are looking at the increase in adoption from distributing heavy sectors such as consumer goods. E-Way bills are something which the warehouse teams with the companies to handle all stuff. The e-way system is laudable but it is not designed for checking the outright highway statistics. Some of the personified issues can be resolved out so a large scale ratio can be lifted up in businesses.