Complete Guide to E-Way Bill Analytics: Benefits, Features and Insights

The e-way bill system was introduced during the GST implementation. It was used to complement the original tax invoice. It was generated when goods were dispatched from the place of business. The e-way bill highlights the vehicle number and length of the journey (in km) along with details already in the original invoice. 

This article will comprehensively discuss how state tax officers use e-way bill analytics to identify compliance gaps and tax irregularities. 

What is E-Way Bill Analytics?

E-way bill analytics helps tax officers to analyse patterns and detect abnormalities in the movement of goods and transactions among taxpayers through data obtained from e-way bills, FASTag, Vahan system, invoices, and the GSTN database. The e-way bill system receives around 30 lakh daily vehicle movement transactions from over 800 tolls nationwide through FASTag, developed by the NPCI.

It has been an absolute game changer in tracking the movement of goods across states. By combining data from every source, the authorities can allocate resources in high-risk areas to detect tax evasion, fake movement of goods or recycling of e-way bills.

For instance, a truck carrying goods crossed two toll plazas. Still, when the vehicle number obtained from FASTag was cross-checked, no e-way bill was generated. The system will automatically highlight such vehicle movement as non-compliant.

Importance of E-Way Bill Analytics for Businesses

As e-way bill analytics are accessible only to state tax officers, a business can still gain insights into how the authorities interpret e-way and other data. For instance, a business should avoid repeated cancellations or extensions of the e-way bill, as such patterns are tagged as red flags. In case any instance occurs, the business should maintain proper records to justify such actions.

Benefits of E-Way Bill Analytics

E-way bill analytics have proved to be the best way to identify suspicious movement of goods, thereby detecting non-compliant invoices and fake input tax credit claimed by any business.

A tax officer can analyse real-time tracking and capture unusual data, for instance, for those e-way bills that are cancelled during the last hour of cancellation, if multiple e-way bills are generated for the same invoice number, and transport details (Part B of the e-way bill) are updated again after e-way bill verification.

The system also detects circular trading among taxpayers; for example, Mr A sold goods to Mr B, then Mr B sold goods to Mr C, Mr C sold goods to Mr A (A>B>C>A). This identifies potential shell companies engaged in fake transactions, inflating their financial growth.

The analytics also focus on newly registered taxpayers with heavy sales in a few months of registration and businesses observing abnormal growth in turnover but no corresponding increase in GST output liability. 

How E-Way Bill Analytics Works

Step 1: On the E-way Bill portal, state tax officers must log in to their "E-Way Bill Analytics/ Comprehensive Analytics on E-Way Bill system," which captures and integrates data from various sources discussed above.

Step 2: The officers can view verification, intelligence, and summary reports, taxpayers' profiles, total tax and penalty collection, and e-way bill analytics.

Step 3: The system transforms accumulated raw data to provide meaningful insights, identifying potential discrepancies and compliance gaps, which are categorised in the following manner for each taxpayer:

Step 4: The tax officer can use these insights to plan vehicle field inspections and issue relevant notices to taxpayers.

E-way bill analytics have uncovered many instances of tax evasion, fake movement of goods and ineligible input tax credit claimed by taxpayers. These analyses have provided deep insights about the movement of goods, especially during elections, where unaccounted cash disguised as any other product was transported through vehicles previously penalised.