Penalty for Non Generation of e-Way Bills
E Way Bill Penalty
As per GST law, all the supplier or transporters must carry a GST e-way bill if the movement of goods worth more than Rs.50,000. The supplier or the transporter can register themselves with the E-Way Bill portal and generate the bill. However, the Ministry of Finance (MoF) allows few exemptions such as, if the supplier transports goods less than 10 km within a state, the concerned individual can avoid carrying a GST e-way bill and also avoid furnishing the details on the GST portal or generate e-way bill. The entity should produce the bill and invoices if intercepted by the designated officers during the movement of goods.
The e-way bill portal is not just used by the consigner and consignee, but also by the transporters and largely the enforcers. The Commissioner or an equivalent officer representing the government plays the role of enforcing all regulations pertaining to e-way bill. The enforcement is a crucial part of the e-way bill, as it aids in identifying the defaulters and penalizing them according to the government norms. Hence not carrying the GST e-way bill by the supplier or the transporter shall apply as non-compliance under the provisions of the GST law. This can result in both non-monetary as well as monetary losses to the taxpayer as the tax officials shall send notices to the concerned business individuals.
E-Way Bill Enforcement
The e-way bill mechanism has been introduced in the GST from 1st April 2018 to plug tax evasion loopholes. Tax evasion was one of the reasons cited by the government for the fall in revenue collection in October 2017. Thus the GST Council has empowered GST Officers to implement and enforce all regulations relating to e-way bill for transporting goods and to intercept any conveyance to verify the e-way bill. Few points to be remembered in the enforcement of the e-way bill are as follows:
- The physical verification of conveyances may be carried out by the proper officer as authorized by the Commissioner or any officer empowered by himself.
- Physical verification of the specific conveyance should be carried out only on the basis of trusted information on evasion of Tax.
- Any physical verification of the conveyance should be carried out after obtaining permission from the Commissioner.
- A summary report of every inspection of goods in transit should be recorded online by the proper officer in Part A of Form GST EWB (e-Way Bill) – 03 within 24 Hours of the inspection.
- The Final report in Part B of Form GST EWB-03 should be recorded within 3 Days of such inspection.
- Once a physical verification of the goods is carried out within or outside the state, no other verification inspection shall be carried out anywhere unless a specific information relating to evasion of tax is made available subsequently.
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Role of Transporter
During the inspection of the goods the transporter should carry out the following steps to avoid delays:
- Carry proper GST invoice or Delivery Challan, as required.
- Carry an E-way bill.
- When the vehicle is being intercepted and detained for a period exceeding 30 Minutes, the transporter may upload the details in FORM GST EWB-04 on the e-Way bill portal. This should be carried out by the transporter to reduce the risks of late transportation of the consignment.
- The common portal for the e-way bill generation, update and cancellation the concerned individual can log in into: http://ewaybill.nic.in .
eWay Bill Penalties
Defaulters of the GST e-way rules are penalised according to the Indian Government norms. The penalties are as follows:
- As per Section 122 of the CGST Act, 2017 – A taxable person who transports any taxable goods without the cover of specified documents (e-Way bill is one of the specified document) would be liable to a penalty of Rs.10,000/- or the tax sought to be evaded whichever is greater.
- Any goods not listed in a GST e-way bill that is found being transported or stored will be liable to detention or seizure as per the Section 129 of CGST Act, 2017.
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Penalty for Mistakes in E-Way Bills
Upon repeated requests from the owners of the goods and truck drivers, the Government of India (GoI) informed that, if the supplier of the goods or the transporter carrying goods with registered GST and GST e-way bill but the e-way bill contains minor mistakes, the enforcement officer shall enforce a penalty of Rs.1000 to the registered business and/or to the transporter. GoI informed this measure through the Circular bearing the number 64/ 38/ 2018-GST on 14th September 2018. Hence, if the e-way bill contains minor mistakes during the transit, the supplier or the transporter shall become liable only for a penalty of Rs.1000.
However, it shall apply only when the owner of the goods or the transporter registered the goods on the e-way bill portal or through other means. The person should also have paid the applicable taxes for the total value of the goods associated with the transit. During the transit of the said goods, the supplier or the transporter of the goods should carry the tax invoice or delivery challan and e-way bill related to the goods. The following mistakes shall apply as per the Circular and the penalty of Section 129 of the CGST Act shall not apply if e-way bill, tax invoice or other related documents contains the following mistakes for the said goods as transported by the owner of the goods or the transporter:
- If e-way bill, tax invoice or other related documents contains spelling mistakes in the name of the consignor or the consignee but the documents contains relevant GSTIN wherever applicable.
- If e-way bill, tax invoice or other related documents contains error in the Pin-code to the said place deliverable but the address of the consignor or the consignee matches relevant information shall apply as error in pin-code. However, the error in the pin-code should have no effect in increasing the validity period of the e-way bill.
- If e-way bill, tax invoice or other related documents contains error in the address of the consignor or the consignee but the address mentioned in the documents relates close to the locality of the recipient of the said goods. However, this shall apply only if the relevant documents contain error in the address and all the other details related to the said goods mentioned as required.
- If e-way bill, tax invoice or other related documents contains mistake in the one or two digits of the document number for the said goods as mentioned in the e-way bill. If the relevant documents contains several mistakes related to the document number, the benefits of the Circular becomes ineffective.
- If e-way bill, tax invoice or other related documents contains error in 4 or 6 digit level of HSN but the first 2 digits of the HSN Codes seems relevant to the goods transported by the supplier or the transporter and the concerned individual paid the tax and mentioned it appropriately in the e-way bill, the penalty as per Section 129 of the CGST Act becomes ineffective.
- If e-way bill, tax invoice or other related documents contains error in mentioning the vehicle number and the error extends only up to two digits or characters of the allotted vehicle number, the penalty shall not apply.
As per the Circular, for the above said situations, upon noted by the authorized officer the penalty shall apply of Rs.500 as per Section 125 of the CGST Act and Rs.500 as per the respective state GST Act. In total the person shall pay Rs.1000 in total for making any minor mistakes in the above-mentioned para. The owner of the goods or the transporter shall make the payment for the penalty in Form GST DRC-07 for every applicable consignment. The enforcing officer shall make note of all the penalties issued under Section 125 of the CGST Act and state the reason for not implementing Section 129 of the CGST Act to the controlling officer on a weekly basis.
Penalty for Transporting Goods without Valid Documents in E-Way Bills
If a transporter or a supplier transports any goods or stores any goods without any valid documents related to the goods during the transit in contravention under the GST Act or any rules as made thereunder and the supplier uses the same goods or the goods stored in transit shall become liable to detention or seizure by the concerned officers. The officers shall release the seized or detained goods or the stored when the supplier or the transporter satisfy the following conditions. The person shall make the payment for penalty as per Section 129(1) clause (a) and clause (b) of the CGST Act. The following mentions the conditions:
Transporting Goods without paying Tax and valid documents
If the supplier or the transporter failed to pay taxes and transporting without documents, the concerned individual shall make the payment of the applicable tax and penalty equals to 100% of the total tax payable on the value the goods transported.
If the person transported exempted goods, the person shall make a payment of the amount equal to two percent of the value of the goods or the individual shall pay a penalty of Rs.25,000 whichever less in the penalty payment.
Transporting Goods only without valid documents
If the supplier or transporter paid the tax for the said goods but transporting without valid documents, the individual shall make a payment equal to the 50% on the total value of the goods carried.
If the concerned individual transported exempted goods, the person shall make a payment of the amount equal to five percent of the value of the goods or the individual should pay a penalty of Rs.25,000 whichever less in the penalty payment.
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Post by Arun Kumar
IndiaFilings is India's largest online compliance services platform dedicated to helping people start and grow their business, at an affordable cost. We were started in 2014 with the mission of making it easier for Entrepreneurs to start their business. We have since helped start and operate tens of thousands of businesses by offering a range of business services. Our aim is to help the entrepreneur on the legal and regulatory requirements, and be a partner throughout the business lifecycle, offering support at every stage to ensure the business remains compliant and continually growing.