RFID Tag Must in UP for E-Way Bill

Effective November 1, obtaining Radio Frequency Identification (RFID) tag for fulfilling e-Way bill requirements will be mandatory in Uttar Pradesh.

A notification issued by UP’s Commerical Tax Commissioner said transporters who ferry goods that require an e-Way bill, should have an RFID tag embedded on the windscreens of their vehicles.

Though Maharashtra has completed a pilot project for use of the RFID tag, UP is the first State to notify such a measure.

Meanwhile, many questions remain unanswered. It is not clear whether commercial vehicles not registered in UP will be required to obtain the tag, and if the requirement will apply to all categories of transporters.

A detailed response from the State’s officials is awaited.

According to Anita Rastogi, Indirect Tax Partner at PwC, GST rules empower the Commissioner to notify that a class of transporters should get the RFID tag embedded on vehicles carrying goods. “With this notification, one can say that another step has been taken towards advancement of tracking goods,” she said.

How it works

A senior GST official said the new system is similar to traffic police keeping a watch on speeding vehicles. A reader will be placed a certain distance away from the check-post, and as soon as vehicle is detected, a computer at the check-post will be notified of the vehicle’s details. With the help of a central server, the person manning computer will know if the e-Way bill has been generated for the vehicle. If everything is in order, then the vehicle will be free to pass.

Nevertheless, some vehicles will need to be stopped. “If the truck is carrying sensitive goods, it needs to be stopped and checked. Also, if the transporter has been violator in the past, such vehicle will also be stopped for checking,” he said.

In future, this system will also be helpful in obtaining data about the fitness of the vehicle, its pollution compliance, and the status of its insurance. If the vehicle is unfit to ply on the roads, then an e-Way bill will not be generated.

The RFID uses radio waves to automatically identify people or objects.

It is done through a microchip that is attached to an antenna (the chip and the antenna together are called a transponder or a tag). The antenna enables the chip to transmit the identification information to a reader. The reader converts the radio waves reflected back from the RFID tag into digital information that can then be passed on to computers that can make use of it.

The e-Way bill is mandatory for the transportation of goods valued at ₹50,000 or more between States (inter-State) and within a State (intra-State). If the rule is not complied with, GST laws provide for confiscation of the vehicle or imposition of a penalty (that is equal to the tax payable on the goods being transported) on the owner of the conveyance transporting the goods.