The 2021 report titled “E-Waybill – A Three-Year Journey” highlighted the substantial impact of the e-waybill system on tax compliance and overall goods transportation. The findings emphasized the important working of e-waybills in creating transparency, efficiency, and compliance within the tax and transport ecosystem.
The report also indicated the effectiveness of the system, attributing its success to the transparent framework and stringent penalties in place for non-compliance, ensuring the effective implementation of the e-waybill system.
The legal framework governing e-waybills within the Goods and Services Tax (GST) system imposes specific provisions and penalties to ensure compliance. Understanding these regulations is essential to avoid legal consequences related to e-waybill non-compliance.
GST Act Provisions Governing E-waybill Requirements and Compliance
The Goods and Services Tax (GST) Act incorporates provisions governing the generation and requirements of e-waybills, as outlined in Rule 138 of CGST Rules (Chapter XVI) as well as in other Sections of the CGST Act.
The key aspects of the GST Act and Rules pertaining to e-waybills are summarized as follows:
Provisions Governing Requirements and Verification
- Threshold Value: e-waybills are mandatory for the movement of goods with a consignment value exceeding ₹50,000. Various states can have different threshold values. It is important to understand state-wise differences.
- Initiation of Movement: Registered persons causing the movement of goods, whether for supply or other reasons, must furnish details electronically in Part A of FORM GST EWB-01 before the commencement of the movement.
- Principal’s Responsibility: Principals sending goods to job workers or exempted handicraft goods transporters are obligated to generate e-waybills, irrespective of consignment value.
- E-waybill Generation by Transporters: If the goods are handed over to a transporter, the registered person provides transporter details in Part B of FORM GST EWB-01. The transporter then generates the e-waybill based on this information.
- Alternative Documentation: The Commissioner may, under specific conditions, authorize carrying alternative documents instead of e-waybills.
- Documents to be Carried: Persons in charge of conveyances must carry the invoice or relevant documents, along with a copy of the e-waybill or its number, either physically or through a Radio Frequency Identification Device.
- Verification of E-waybills: Proper officers, authorized by the Commissioner, may intercept conveyances to verify e-waybills. Radio Frequency Identification Device readers may be utilized for verification where the e-waybill is mapped.
- Inspection and Verification of Goods: Inspection reports must be recorded online in FORM GST EWB-03 within specific timeframes. Physical verification of goods during transit may avoid further scrutiny within the state unless specific information on tax evasion is received.
Provisions Governing Compliance
The e-waybill provisions under the GST law, encapsulated in Chapter XIV, specifically address the Inspection, Search, Seizure, and Arrest processes. Section 68 empowers the Government to mandate the person in charge of a conveyance carrying goods of value exceeding a specified amount to carry prescribed documents and devices. The validation of these documents is detailed in a manner prescribed by the law.
Additionally, the legal framework introduces penal provisions for offenses related to the contravention of e-waybill regulations. Section 125 outlines a general penalty applicable to individuals contravening the provisions of the Act or its rules, where no specific penalty is defined, with a maximum limit of twenty-five thousand rupees.
Section 129 elaborates on the detention, seizure, and release of goods and conveyances in transit. It stipulates conditions under which goods and conveyances can be detained or seized, outlining procedures for release upon payment of applicable tax and penalties. The section emphasizes the importance of providing an opportunity for the concerned person to be heard before determining tax, interest, or penalty.
Section 130 addresses the confiscation of goods or conveyances and the imposition of penalties. It outlines circumstances under which goods or conveyances may be confiscated and provides the owner with the option to pay a fine in lieu of confiscation. The section emphasizes procedural fairness, ensuring that no order for confiscation or penalty is issued without giving the person an opportunity to be heard.
Section 131 clarifies that confiscation or penalties imposed under the GST law should not interfere with other punishments prescribed by the Code of Criminal Procedure, 1973, or any other prevailing laws.
These provisions collectively establish a robust legal framework governing the e-waybill system, aiming to ensure compliance and fair enforcement within the GST regime.
E-waybill Non-Compliance Penalties and Legal Consequences
The authorized officer, representing an Indian state or the Centre, gains the authority to intercept goods in transit. This interception allows for a meticulous examination of the goods and accompanying documents, including the e-waybill. Legal repercussions come into play for both expired e-waybills and instances where no e-waybills are presented, including detention, seizure, and confiscation of goods – along with fines.
Failure to Transport Taxable Goods with Relevant Documents
If a taxable person attempts to transport taxable goods without the relevant documents, including the e-waybill, they face penalties under Section 122 of the CGST Act, 2017. The penalty amounts to ₹10,000 or the tax amount that the transporter was attempting to evade, whichever is greater. This provision is designed to discourage the unauthorized movement of taxable goods without proper documentation.
Transporting Goods Not Mentioned in the E-waybill
In instances where goods are transported without being mentioned in the e-waybill, authorities can take punitive measures under Section 129 of the CGST Act, 2017. This may lead to the seizure or detention of the goods, and subsequent legal proceedings may follow. The objective is to ensure that all transported goods are accurately documented to prevent tax evasion.
Transporting Goods with Paid Tax but Without Valid Documents
Transporting goods with paid tax but lacking valid documents incurs a penalty of 50% of the cargo value. In cases involving exempted goods, the penalty is either 5% of the total value of goods or ₹25,000, whichever is lesser. This provision aims to enforce the necessity of proper documentation even when the applicable tax has been paid, emphasizing the integral role of valid documents in the transportation process.
Penalty for Expired E-waybill Without Paying Applicable Tax
Transporting goods with an expired e-waybill warrants penalties under Section 129(1) clause (a) and clause (b) of the CGST Act, 2017. In such cases, the relevant authorities have the right to seize and/or detain the goods until the assessed penalties are paid.
If goods are transported without paying the applicable tax and with an expired e-waybill, the penalty is set at 100% of the payable tax amount. Additionally, for exempted goods, the penalty is determined as either 2% of the total cargo value or ₹25,000, whichever is lesser.
Two distinct scenarios arise when it comes to paying penalties after seizure: if the owner comes forward, the proper officer levies a 100% penalty equivalent to the tax amount. In the event of the owner’s absence, a penalty of 50% of the total value of the goods (before tax) is imposed, along with additional taxes and charges. So, it is crucial to understand how to handle expired e-waybills.
Fines for Confiscated Goods
Fines related to confiscated goods align with the severity of the consequences. The minimum fine is the same as that of seized goods. However, the maximum fine escalates to the market value of the confiscated goods before tax. In cases where vehicles are confiscated, owners face fines equivalent to the taxation payable on the captured goods.
Additionally, involved parties or individuals are obligated to cover extra charges, taxes, and penalties beyond the initial fine for confiscated items.
Penalties for Minor Mistakes in E-waybill
In instances of minor errors within the e-waybill, the government, in accordance with the official circular issued in 2018, imposes penalties. These penalties, specified under Section 129 of the CGST Act of 2017, amount to ₹1,000 and are applicable only if the associated taxes have been duly paid.
Types of Minor Mistakes
- Spelling Mistakes: If there are spelling errors in the names of the consignor or consignee, a penalty of ₹1,000 may be levied. It is essential to ensure accuracy in the details of the parties involved in the transaction.
- Incorrect Pin Codes: Errors in relevant pin codes on the e-waybill can result in a ₹1,000 penalty. Accurate pin code information is crucial for the proper identification of the destination.
- Address Errors (Near Locations): In cases where there is an error in the address of the consignor or consignee, but the two locations are in close proximity, a penalty of ₹1,000 may be imposed. Other details on the e-waybill should remain true and accurate.
- Document Number Errors: Mistakes in one or two digits of the document number can attract a penalty. It is imperative to ensure the correctness of the document number associated with the consignment.
- HSN Code Errors (Last 4 Digits): Errors in the last four digits of the HSN code may lead to a ₹1,000 penalty. Accuracy in the classification of goods is crucial for proper tax assessment.
- Vehicle Number Errors: Errors in the vehicle number on relevant documents may result in a penalty. However, if the error extends to only up to two digits, no penalty is charged.
If any of the mentioned mistakes are identified, a penalty of ₹500 is charged under Section 125 of the CGST Act. Additionally, another ₹500 is charged as per the relevant section of the state’s GST act. The owner of the goods is obligated to pay the fine along with the submission of Form GST DRC-07.
The stringent penalties associated with non-compliance with E-waybill regulations underscore the gravity of adhering to prescribed procedures in the realm of goods transportation. Businesses must navigate these regulations meticulously to avoid legal repercussions, ensuring a seamless and law-abiding supply chain under the GST framework. The penalties serve as a crucial deterrent, promoting accountability and compliance in the dynamic landscape of modern commerce.
Lastly, the contents of this article should not be interpreted as a legal opinion or representation of the author’s views. The information provided is intended solely for informational and educational purposes. Although care has been taken in preparing this article, there may be inadvertent mistakes and omissions. The author disclaims any liability for losses or damages of any nature resulting from inaccurate or incomplete information in this document or any actions taken based on it. It is recommended to seek expert or professional consultation.
Where can I generate an e-waybill?
The e-waybill can be generated on the common portal at https://ewaybillgst.gov.in.
Can I carry the e-waybill on my mobile device?
No, the person in charge can provide the e-waybill number to the tax officer, who will use the number for necessary verifications.
Who needs to generate an e-waybill?
The person responsible for the transportation of goods, including suppliers, recipients, or transporters, needs to generate an e-waybill when the value of the consignment exceeds Rs 50,000.
What to do if there’s a mistake in the e-waybill after generation?
Cancel and generate a fresh one since Part A of e-waybills cannot be edited.
Can e-waybill penalties be waived?
Authorities may consider waivers for minor mistakes if promptly corrected and not involving intentional evasion, but decisions rest with tax authorities.
What is the penalty for not generating Part B of the e-waybill?
The penalty for not generating Part B of the e-waybill is the greater of ₹10,000 or the total tax amount suspected of being evaded by the transporter or owner.
How is the validity period of an e-waybill determined?
The validity period of an e-waybill is calculated based on the approximate distance entered during its generation. Regular vehicles have one day validity for every 200 km of movement, while Over Dimensional Cargo vehicles have one day validity for every 20 km.
Can the validity of an e-waybill be extended?
Yes, under exceptional circumstances like natural calamity or trans-shipment delay, the transporter can extend the validity of an e-waybill by updating reasons and details in Part-B of FORM GST EWB-01.
What happens if the validity of an e-waybill expires?
If the validity expires, the goods are not allowed to be moved. The proper officer may intercept the goods, leading to potential confiscation, seizure, and penalties.
Are there penalties for not generating an e-waybill for exempted goods?
Yes, penalties under Section 122 of the CGST Act may apply if taxable goods, including exempted ones, are transported without the necessary documents.