" Integrating the E-way bill system with FASTag will curb tax evasions and revenue leakage and ensure real-time monitoring of goods movement across states, allowing for greater transparency, seamless movement of goods, etc. "
In a country like India, tax collection is a major stepping stone towards nation-building however, we also are aware that tax evasion is very frequent here. In the financial year 2023-24, we saw an increase of 20% YOY (year-over-year) in direct tax collection which now stands at 18, 90,259 crores. This is splendid news but do keep in mind that only 4.8% of the total population and 6.3% of the total adult population pay personal income tax in India. As the saying goes, death and taxes are permanent and we’d always remember that.
In recent years, India has made significant strides towards digitizing and streamlining its logistics and transportation systems. One of the key initiatives in this regard has been the integration of the E-Way Bill system with FASTag, a technological advancement aimed at enhancing the efficiency and transparency of the country's transportation and logistics ecosystem.
Let’s explore the integration of E-Way Bill with FASTag in India, focusing on the top benefits and implications of this integration.
FASTag and E-way Bill
Talking about death and taxes, we know that FASTag is a UHF RFID tag that is used on vehicle windshields to collect tolls on highways and expressways in India, just like the FasTrak ETC system in the USA. It has been a great success since its launch in 2017.
As an electronic toll collection system introduced by the National Highways Authority of India (NHAI), FASTag enables automatic deduction of toll charges, thereby reducing travel time and congestion at toll plazas. FASTag is linked to a prepaid account and is affixed to the windscreen of a vehicle, allowing for cashless payment of toll charges.
Read more: How to get a FASTag for your vehicle online and offline?
Now the same FASTag is being integrated with the E-way bill system (EWB). The EWB system under Goods and Services Tax (GST) mandates that all commercial vehicles used in interstate transportation of goods valued over INR 50k need to have an e-way bill. It is free and suppliers and manufacturers with a GSTIN and invoice of the goods can generate an EBN (E-way bill number) by visiting the official E-way Bill portal. It is aimed at ensuring the seamless movement of goods across state borders, preventing tax evasion, and facilitating effective monitoring and regulation of the transportation of goods.
Now that we know why an E-way bill is required and how to generate it, where does the FASTag (RFID windshield tag for toll collection) come into play? Well, the integration of FASTag, RFID tag with E-way bill will help with compliance with GST rules and E-way bill provisions in real-time, preventing revenue leakage.
Integration of FASTag RFID with E-way bill
The FASTag is currently used for electronic toll collection in India, ensuring that all personal and commercial vehicles pay the requisite toll on state highways and expressways. The Electronic Toll Collection system in India, thus keeps a record of vehicle movements, total traffic, etc. on the state highways and expressways. Apart from that, the toll collected from vehicle owners helps the Ministry of Road Transport and Highways of India with added funds to carry on more projects related to highway making and maintenance.
The integration of the E-Way Bill with FASTag involves linking the electronic toll collection system with the E-Way Bill generation process. Under this integration, when a vehicle carrying goods passes through a toll plaza, the FASTag reader automatically captures the details of the vehicle and the E-Way Bill. This allows for real-time monitoring of the movement of goods and enables authorities to verify the authenticity of E-Way Bills, reducing the scope for malpractices and ensuring compliance with tax regulations. Thus, the integration of this FASTag with the E-way bill solves many problems for GST officials, revenue leakage being one of them.
Benefits of Integrating E-way Bill with FASTag
The Integration of the E-way Bill system with the ETC with FASTag RFID tag offers many benefits. Let’s discuss the top benefits as follows:
1.Enhanced Efficiency in Monitoring Goods Movement
The integration of the E-Way Bill with FASTag streamlines the process of monitoring the movement of goods, reducing the need for manual intervention and paperwork. It leads to improved efficiency in logistics operations and faster clearance at toll plazas, thereby contributing to overall cost savings for businesses and smoother traffic flow on highways. It also streamlines the movement of commercial vehicles across the states.
2. Reduced Tax Evasion and Revenue Leakage with E-way Bills
Integrating E-Way Bills with FASTag allows authorities to effectively track the movement of goods and verify the authenticity of the bills in real time, thus, significantly reducing the scope for GST and other tax evasions and ensuring greater compliance with tax regulations, contributing to the government's efforts to curb tax fraud and enhance revenue collections.
3. Transparency and Accountability
The integration promotes transparency in the transportation of goods by providing real-time visibility into the movement of vehicles and the associated E-Way Bills. This fosters greater accountability among transporters and businesses, as well as regulatory authorities, leading to improved governance and monitoring of the logistics ecosystem.
4. Data Analytics and Insights
The integration generates a wealth of data related to the movement of goods, vehicle utilization, and transportation patterns. This data can be leveraged for analytics and insights, enabling informed decision-making, route optimization, and effective resource allocation in the logistics and transportation sector.
Implications and Future Considerations
The integration of the E-Way Bill with FASTag represents a significant technological advancement in India's logistics and taxation landscape. However, it also raises implications related to data privacy, technological infrastructure, and adaptability for stakeholders.
Some say that while the process is aimed at curbing bogus billing, it also might create hassles for genuine taxpayers. Many businesses feel that due to the faults of transporters who might use long and alternative routes to avoid tolls, their products mustn’t be seized or they shouldn’t be penalized. Therefore, it is imperative for the government and relevant authorities to address these implications through robust regulations, infrastructure development, and stakeholder engagement to ensure the seamless and effective implementation of this integration.
In conclusion, the integration of the E-Way Bill with FASTag in India offers a host of benefits, including enhanced efficiency, reduced tax evasion, transparency, and data-driven insights. The process represents a pivotal step towards harnessing technology to transform the logistics and transportation ecosystem, contributing to the country's economic development and regulatory efficiency.
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