Penalties and Consequences for Non-Compliance with e-Way Bill Provisions

Prakash Matre
Prakash Matre at April 27, 2022
Penalties and Consequences for Non-Compliance with e-Way Bill Provisions

Eway Bill Non Compliance

Eway bill is an electronically generated document mandatory to be carried for movement of goods across India. It is necessary for the movement of goods worth more than Rs. 50,000 with some exceptions. A unique eway bill number (EBN) is generated for each such consignment to be transported. The validity of this EBN depends on the distance of transportation of goods. To enforce this rule, authorized officers may be instructed to intercept any vehicle at certain check posts for the verification of necessary documents. Additionally, physical verification of the vehicle may be carried out on receiving specific inputs regarding tax evasion.

E way bill latest news 

29th August 2021

From 1st May 2021 to 18th August 2021, the taxpayers will not face blocking of e-way bills for non-filing of GSTR-1 or GSTR-3B (two months or more for monthly filers and one quarter or more for QRMP taxpayers) for March 2021 to May 2021.

4th August 2021

Blocking of e-way bills due to non-filing of GSTR-3B resumes from 15th August 2021.

1st June 2021

1. The e-way bill portal, in its release note, has clarified that a suspended GSTIN cannot generate an e-way bill. However, a suspended GSTIN as a recipient or as a transporter can get a generated e-way bill.

2. The mode of transport ‘Ship’ has now been updated to ‘Ship/Road cum Ship’ so that the user can enter a vehicle number where goods are initially moved by road and a bill of lading number and date for movement by ship. This will help in availing the ODC benefits for movement using ships and facilitate the updating of vehicle details as and when moved on the road.

18th May 2021

The CBIC in Notification 15/2021-Central Tax has notified that the blocking of GSTINs for e-Way Bill generation is now considered only for the defaulting supplier’s GSTIN and not for the defaulting recipient or the transporter’s GSTIN.

Penalty for not generating e way bill

For not complying with the GST Act, the business not only faces the monetary penalty but also a non-monetary penalty as well. In October 2017, as cited by the government, these penalties were levied on the businesses to tackle the tax evasion problem.

Consequences of not carrying E way bill

The consequences of not generating & carrying the E Way bill can result in both monetary and non-monetary penalties to the taxpayer:

  • Monetary Penalty

Movement of goods without the cover of an invoice and e way bill constitutes an offense and attracts a penalty of Rs.10,000 or the tax sought to be evaded (whichever is greater). Hence, the bare minimum penalty that is levied for not complying with the rules is Rs. 10,000.

  • Detention and Seizure

The vehicle that is found to be transporting the goods without an e way bill can be detained or seized and would be released only on payment of appropriate tax and penalty as specified by the officer. Under this, there could be two situations:

  1. If the owner wishes to pay the penalty, he must pay 100%  of the tax payable.
  2. If not, the penalty will be equal to 50% of the value of goods.

Penalty for Mistake in E Way Bill

Upon repeated requests from the owners of the goods and truck drivers, the Government of India (GoI) has clarified that if the supplier of the goods or the transporter carrying goods with registered GST and GST e-way bill with 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.1,000. The owner of the goods or the transporter has to make the payment for the penalty in Form GST DRC-07 for every applicable consignment. 

What happens if there is mismatch in e way bill and invoice?

It is important to note that imposition of penalty is prohibited when there is an error in one or two digits of the document number mentioned in the e-way bill as decided in the case of Agarwal Industries Pvt Ltd Vs The Deputy Assistant Commissioner (ST) (IV) (Andhra Pradesh High Court).

Know more about e-way bills.

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