How vehicle tracking could curb tax evasion?

Context:

In a move that is expected to help curb tax evasion, Goods and Services Tax (GST) authorities will now be able to track real-time data of commercial vehicle (CV) movement on highways by integration of the e-way bill (EWB) system with FASTag and RFID.

Relevance:

GS-II: Polity and Governance (Transparency & Accountability Measures, Government Policies & Interventions), GS-III: Indian Economy

Dimensions of the Article:

1. What are e-way bills?
2. About FASTag
3. About RFID Technology
4. What is the new system involving GST, EWB, FASTag and RFID?

What are e-way bills?

• Under the indirect tax regime, e-way bills have been made mandatory for inter-state transportation of goods valued over Rs 50,000 from April 2018, with exemption to precious item such as gold. On an average, 25 lakh goods vehicle movements from more than 800 tolls are reported on a daily basis to the e-way bill system.
• About 180 crore e-way bills were generated in three years from 2018 to 2021. Of this, only 7 crore bills were verified by tax officers. In the 2020-21 fiscal, 61.68 crore e-way bills were generated, of which 2.27 crore were picked up for verification.
• The top five states which generated the maximum number of e-way bills for inter-state movement of goods are Gujarat, Maharashtra, Haryana, Tamil Nadu and Karnataka.

About FASTag

• FASTag is an electronic toll collection system in India, operated by the National Highway Authority of India (NHAI).
• It employs Radio Frequency Identification (RFID) technology for making toll payments directly from the prepaid or savings account linked to it or directly toll owner.
• As per NHAI, FASTag has unlimited validity. 7.5% cashback offers were also provided to promote the use of FASTag.
• Dedicated Lanes at some Toll plazas have been built for FASTag.

Advantages of Using FASTag

• Digital transaction makes it easier to collect toll fees.
• Congestion in Toll plazas will reduce.
• Non-stop movement at the highways will reduce Fuel consumption and even pollution.
• The Effort in Managing toll gates is reduced as the system is more automated.
• There will also be reduced paper wastage (in the form of tokens/receipts)
• This will be a unifying system as FASTags are not specific to the state or region and work all over India.

Problems with FASTag

• Technical issues and glitches are possible which makes the system susceptible to false charges or other such issues.
• All the toll booths are yet to be made FASTag compatible and this has not necessarily reduced the congestion issue yet.
• The RFID technology is not failproof and can be misused by duplication or other “hacks”.
• The FASTags sold by banks have to be recharged from the same bank, as they are not Bank Neutral (unless you buy it directly from NHAI).

About RFID Technology

• Radio Frequency Identification (RFID) uses radio waves to communicate between two objects: a reader and a tag. RFID communication is the same as two-way radio communication in the sense that information is transmitted or received via a radio wave at a specific frequency.
• Passive tags collect energy from a nearby RFID reader’s interrogating radio waves. Active tags have a local power source such as a battery and may operate at hundreds of meters from the RFID reader.

RFID applications apart from usage in Toll collection:

• Self-checkins at Libraries / rental services as well as retail premises.
• Livestock Management and pet identification.
• Building Security – secure access controls, documentation and passports.
• Airports – for baggage tracking and tracing/locating.
• SMART home controls – systems to manage home/business energy consumption/production.
• Seismic Sensing – such as locating gas lines and temperature sensing (geophysical).
• Environmental – Energy, Ozone & Pollution measuring equipment.

What is the new system involving GST, EWB, FASTag and RFID?

• The integration of e-way bill, RFID and FASTag will enable tax officers to undertake live vigilance in respect of EWB compliances by businesses and will aid in preventing revenue leakage by real-time identification of cases of recycling and/or non-generation of EWBs.
• Tax officers can now access reports about vehicles that have passed the selected tolls without e-way bills in the past few minutes. They can also view details of vehicles carrying critical commodities specific to the state that have passed the selected toll.
• Further, tax authorities can view details of any suspicious vehicles and vehicles of e-way bills generated by suspicious taxpayer GST identification numbers (GSTINs) that have passed the selected toll on a near real-time basis.
• Officers can use these reports while conducting vigilance and make the vigilance activity more effective. Moreover, officers of the audit and enforcement wing can use these reports to identify fraudulent transactions like bill trading, recycling of e-way bills.
• From 2021, RFID/FASTag has been integrated with the e-way bill system and a transporter is required to have a radio-frequency identification (RFID) tag in his vehicle and details of the e-way bill generated for goods being carried by the vehicles are uploaded into the RFID system.
• When a vehicle passes the RFID tag reader on the highway, the details fed into the device get uploaded on the government portal. The information is later used by revenue authorities to validate the supplies made by a GST registered person.

-Source: Indian Express