Transit Pass system was used by different states to levy tax on inter-state trade.
After the roll out of Goods and Services tax, the different states were allowed to continue their own separate e-way bill system until the national level system was ready.
But there were reports that traders and logistics enterprises were suffering a lot of problems, so early roll out of the E-Way bill system became a necessity.
Why E-Way Bill ?
1. The transit pass system followed by states is said to be inefficient and marred by problems of corruption, variety etc.
2. The Government indirect tax receipts were falling and transit pass was said to be a reason for the same by some experts.
3. GST Council has opined that this system will help in unrestricted movement of goods along state borders.
4. Voluntary adoption on trial basis from 16th January by businesses will help authorities in checking instances of under-valuation of goods.
5. The E-Way Bill system will be helpful in tracing the factory output and inter-state commerce as it will leave an electronic trail of goods movement.
6. Tax evasion will become more and more difficult however compliance burden cost of tax-payers will increase.
7. All the states from 1st June 2018, have to implement the national E-Way Bill system for intra-state movement of goods as well.