With the aim to curb evasion of Goods and Services Tax, the state government has made it mandatory for transport carriers to use radio frequency identification device (RFID) tag along with e-way bill from October 1.

Though e-way rules require the use of RFID tag, no other state has made it mandatory since the start of e-way bill in April this year.

The e-way bill rules mandate that a vehicle carrying goods worth over Rs 50,000 must furnish details electronically on the common portal and generate e-way bill.

The portal captures the details of supplier, recipient and the value of goods transacted, and this provides the Tax department with an anti-evasion tool, especially for monitoring business-to-consumer (B2C) traders.

“Before transportation of such goods in Uttar Pradesh, vehicles will have to get a RFID tag and get it embedded on windscreen of the vehicle carrying goods and get it mapped to e-way bill system,” a notification issued by state Commercial Tax department said.

In the absence of RFID tags on carriers, tax officials found it difficult to intercept cargo due to lack of intelligence. The enforcement measure has often been based on trial-and-error approach as check-posts on state borders have been dismantled after the e-way bill became effective.

“UP is ahead of other states in notifying RFID implementation. This will ensure real-time flow of data, captured from RFID on moving vehicles to e-way bill portal without technological glitch,” said a Commercial Tax department official.

“With RFID readers set up at strategic locations and toll plazas, random checking would not be required. Enforcement of RFID tag would also help is in keeping track on inter-state transit of goods from UP,” he said.

By another order, the UP Commercial Tax department directed all departments and agencies to ensure tax deduction at source for collection of two per cent of GST on all goods purchased above Rs 2.5 lakh. 

Courier agencies have also been directed to charge two per cent GST as TDS and deposit it with the department.

Both orders will come into force from October 1 next.

Additional Commissioner (Commercial Tax) BD Dwivedi said that provision for two per cent was there in GST Act but it was not enforced but from now on, all government departments, corporations would come under its ambit but this would not apply on purchases below Rs 2.5 lakh.