The Government is looking to link the GST network (e-Way bill) with FASTag mechanism of the National Highways Authority of India and Logistics Data Bank services of the Delhi Mumbai Industrial corridor. For those who are not aware of what FASTag is, it is a device that with the help of Radio Frequency Identification technology enabled toll payments directly from the prepaid or savings account linked to it. The tag is pasted on the windscreen of the vehicle thus enabling the commuter to drive the plaza without having to stop by at the toll booth for any cash transactions.
How will it be linked with GST?
The revenue department has come up with the idea of linking the e-way bills with the FASTag mechanism to ensure quick movement of goods and check GST evasion. In order to move the goods more than Rs 50,000 you do require the E-Way bill from one state to another. Further, this bill can be linked to the LDB services of DMICDC. LDB deploys RFID technology for the ease of container tracking services in India by integrating multiple information nodes across various agencies. Just linking the e-way bill with FASTag mechanism would enhance the operational efficiencies throughout the logistics platform. Not just that, the linking of both the mechanism would also help in the prevention of GST evasion by traders who look for the opportunity to exploit the loopholes in the supply chain. Linking is further expected to increase the tax collections by keeping check on the trade that currently happens on cash basis. Linking the e-way bill with FASTag would let the revenue authorities track the movement of the vehicle and make sure that their their travelling destination matches with what they have specified during the generation of e-way bill.
Government focus on Increasing Compliance
One of the reasons why the Government wants to bring the FASTag system is that with the GST system now stabilizing, the time is good to bring some sort of mechanism that ensures greater compliance. GST was rolled out on July 1,2017 and ever since then there have been a lot of amendments made and new provision brought in to make sure that the indirect tax goes through a smooth adoption by the tax payers. To ensure the compliance and payment of GST, the Government has set up the Directorate General of GST Intelligence that would be entitled with investigation the tax evasion and conduct search and seizure operations as per the GST Act.
As of now, linking of the FASTag with e-way bill is on paper but the Government is making efforts to roll the scheme out in order to achieve a system without loopholes and better compliance.