Much Ado about Electronic Bills of Lading
12 April, 2012
Much Ado about Electronic Bills of Lading

Recently introduced electronic bills of lading put small business in fuss since the entrepreneurs lack information, the  analysts presume and they recommend to adopt  testing regime until technical problems are removed and the business acquires due skills.


To improve tax administration and make it simpler, Revenue Service (RS) made submission of bills of lading permissible in the electronic format starting from April 1, 2012. The novelty is supposed to register turnover of goods with utmost accuracy and will completely supplant paper

bills of lading. At the same time, responsibility norms related with old bills of lading remain unchanged.

According to RS, the old paper-bills of lading was easily misused by distributors and traders, they used to strike deals and tore the paper-bill that made turnover of goods inaccurate, part of goods remained unregistered and they enjoyed extra profit out of their sales. The electronically submitted bills-of-lading are impossible to annihilate for the filled forms are immediately sent to the data base of tax service that makes a mirror effect of goods registration and distributors and traders can no longer misuse with it.

According to Zurab Sokhadze, Head of Prevention Department of RS, the new system will be as comforting as possible to both distributors and buyers.

“We do not oblige buyers including district shops to implement investments to purchase computer technique, we just create a chance to pass through this procedure if they can afford it, but if they cannot afford it they have no obligation,” Sokhadze elaborated.

The obligation to have computers covers distributors mainly who transport goods, Maka Pankvelashvili, PR of Revenue Service, explains and the rule of filling the electronic bill-of-lading is described in details and put on the web-site, that enables to reduce mistakes during filling the forms to minimum.

Big business that is already familiar with computer technique and internet faced no problem in fact. But petty fry with no financial resources to acquire computers worth of at least GEL 600 and pricey internet connection and with no skills to handle with the questioned technique is embarrassed. Some distributors even have to stop working for a week and more until they find due resources to acquire new technique. Moreover, distributors claim of technical problems that the RS server was overloaded and hung up that halted work and a deficit of some product like tobacco, bread and some most demanded food product was created in shops when the initiative took its start.

Pankvelashvili assures technical problem occurred only on April 2 for 2 hours alone and now the system works smoothly and about 150 thousand bills-of- lading are submitted per day. Distributors agree that new format needs just 5 minutes if system works properly but they fear internet connection can interrupt or other technical problem reoccur and hamper procurement process at shops until the problem is removed and during this period tax officer can ambush near shops and impose them GEL 1000 of penalty for initial and by GEL 5 thousand for repeated action.

Besides aged people who distribute product by their own car are very unlikely to acquire due computer skills and fear they may lose jobs for nothing. Some enterprising people set up quite a profitable business and take GEL 2 per filled form of electronic bill at Lilo Bazroba, the largest wholesale market near Tbilisi where petty traders and street vendors are mainly from regions and have no computer skills.  Also bigger part of wholesalers is of Azeri nationality who scarcely can read and write in Georgian let alone computer and internet skills.

Small distributors fear that this novelty can even put them out of business in favor to big distributors. They expect price hike on products too as far as expenses increase.

Davit Narmania, Executive Director of the Caucasian Institute for Economic and Social Research, does not rule out that not only distributors but petty trade outlets can really get larger inasmuch as they need unforeseen investments.

Generally he approves the initiative of tax service as the modern electronic bills of lading improve tax administration but he thinks that government did not implement proper information campaign  to raise awareness of small business make them prepared to the upcoming changes and expenses.

“There were just small ads rolling starting March 1st to April 1st but they were not informative and did not provide with much details in fact,” Narmania elaborated adding that shops are also supposed to acquire computers for when corporate clients buy product they demand bills of lading too.

Irakli Lekvinadze along with Levan Kalandadze, both economic analysts, agree with the remark. They also find the idea of introducing the electronic tool good but disapprove the approach of tax service for lack of information campaign and putting the novelty in force without test regime that makes them vulnerable to penalties.

“Those who have accountant have no problems but it is a very difficult thing to small shops, and at least a month of testing regime would be a great relief to business to learn what’s to what and escape penalties,” Lekvinadze said.

Kalandadze hails government to issue a proper act of regulation with detailed description how the new mechanism works so as to dissolve embarrassment in business.

“I think some pilot period should be given for about 3 months for example till all technical things will be cleared and put in smooth operation and business understands it is better, the good idea should not become a tool of punishing law-obedient tax-payers,” he said.

RS neither confirm nor refuse availability of testing at the moment. Giorgi Pertaia, the Business Ombudsman, assures RS carried due campaign starting this year and he personally participated in it and met business people including regions to inform of changes.

“But people delay things till last moment you know, that’s why they are in fuss,” he said adding that bills of lading can be submitted in electronic format even through cell phones and no big expenses are required.

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