Friday, September 24 , 2021

The Impact of the E-way Bill on the Logistics Industry

The logistics industry involves, primarily, the transportation of consignments from one location to another. Transportation of consignments could be within the state or from a location in one state to a location in a different state. The logistics industry in India, already operating on a huge scale, is touted to grow swiftly as the Goods and Services Tax (GST) is prevalent and plays a large role in logistics. GST has brought many benefits with  it, such as lowered number of checkpoints, consolidation of warehouses, and technology which is automated as a result of implementation of the Eway bill. Transporters of goods have seen massive savings in terms of time and money due to this. The positive impact the E-way bill system has had on the transport and logistics industry is huge, and the benefits are clear. 

Beneficial Impact of the E-way Bill

The E-way bill has had beneficial effects on the logistics industry in India. Furthermore, if you’re an entrepreneur who undertakes frequent E-way bill generation, this can be used as documentation when you think of applying for a business loan. The following are the benefits of the E-way Bill on the logistics industry in India:

  • Reduction in Documentation – With the introduction of the E-way bill, the logistics industry has seen a significant reduction in documentation and paperwork. Previously, it was a requisite for transporters to have documents for every state travelled through, in the process of goods delivery. Under the GST system, only one E-way bill is mandatory for one consignment that has to travel through many states. For instance, if goods have to be transported from Delhi to Tamil Nadu, only one E-way bill has to be generated by taxpayers. Goods may pass through different states, but one document is needed. 
  • Rapid Movement – As a result of the E-way bill, quicker and seamless movement of consignments are facilitated. Also, having an E-way bill ensures the elimination of state border checkposts and checkposts at national levels. Transportation vehicles are stopped only a single time in a state, except for instances when authorities suspect any evasion of tax. Moreover, if a vehicle is detained for 30 minutes or more, transporters can report this. 
  • Transportation Costs Lowered – With more rapid and efficient transportation of consignments, the industry concerned with logistics clearly witnesses a significant reduction in fuel costs. Moreover, other transportation-related costs are lowered as well. 
  • Consolidation of Warehouses – Prior to the E-way bill under the GST system, companies had small to medium-sized warehouses in almost every state. This was needed to avoid the payment of a new tax every time consignments went across state lines. With the e-way bill and GST, goods can travel without interruption from one state to another. As a result, companies can build larger warehouses, located in strategic areas, reducing operation, infrastructure and maintenance costs substantially. 
  • The Introduction of Technology – The introduction of technology in the whole process of E way bill registration makes the method of good transportation more transparent and prevents tax evasion by logistics companies and entrepreneurs. In this way, the Government of India ensures scrutiny of consignments and safe and secure ways of transportation of goods. 

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