If you want to transport goods worth ₹50,000 or above from one state to another, it is mandatory for you to generate an E-way bill and carry it at the time of transportation. Failure to do so can have serious consequences. This article will tell you about what could happen if you do not generate an E-way bill for your cargo or if minor errors are spotted in it.
If you fail to get an E-way bill issued for your consignment, you can be penalised as per the norms that have been laid out by the government for it.
The penalty for not generating an E-way bill will be applicable as per the following list:
Section 122 of the CGST Act, 2017 states that if a taxable person attempts to transport taxable goods without the relevant documents, including the E-way bill, the monetary penalty will amount to ₹10,000 or the tax that the transporter was attempting to evade, whichever is greater.
If you are found transporting goods that have not been mentioned in your E-way bill, they can either be seized or detained under Section 129 of the CGST Act of 2017
If you are found transporting goods with the cover of an expired E-way bill, those goods will be seized and/or detained by the relevant authorities. They will only be released after you pay the penalties as per Section 129 (1) clause (a) and clause (b) of the CGST Act of 2017.
If you are transporting goods without paying the applicable tax on them and without any valid documents, the penalty for an expired E-way bill will be 100% of the payable tax amount. In the case of exempted goods, you will need to pay 2% of the total cargo value or ₹25,000, whichever is lower.
- If you are found transporting goods that you have paid the tax for but do not have valid documents for it, you will be liable to pay 50% of the cargo value. If you are found doing so while carrying exempted goods, you will have to pay either 5% of the total value of goods or ₹25,000, whichever is lower.
Failing to carry an E-way bill can lead to significant penalties and operational disruptions. Here are the key consequences:
Monetary Penalty
A penalty of ₹10,000 or the amount of tax sought to be evaded (whichever is higher) can be imposed for transporting goods without a valid E-way bill. This is stipulated under Section 129 (1) of the CGST Act.
Detention and Seizure
Goods being transported without an E-way bill can be detained or seized by authorised officers. If discrepancies are found in the E-way bill or if it is absent, the vehicle may also be detained. The officer will issue a notice specifying the tax and penalty payable, and further legal actions may ensue if the penalties are not settled promptly.
Confiscation of Goods
Under Section 130 of the CGST Act, goods and the conveyance used for their transportation can be confiscated if they are moved without a valid E-way bill. This includes a penalty of ₹10,000 or the tax sought to be evaded.
Legal Proceedings
If penalties are not paid within 7 days of detention, legal proceedings can be initiated against the transporter or owner of the goods.
E-way bill enforcement is crucial for ensuring compliance with GST regulations. Here are some enforcement mechanisms:
Verification by Authorised Officers
Officers authorised by the Commissioner can stop vehicles for verification of E-way bills during both inter-state and intra-state movements
Use of RFID Technology
Radio Frequency Identification (RFID) readers may be installed at check posts. This facilitates quick verification of E-way bills mapped with RFID tags on vehicles.
Documentation Inspection
Physical inspections can be conducted based on specific information regarding tax evasion, and all inspections must be recorded online
Reporting Requirements
Any vehicle detained for more than 30 minutes must have this information uploaded in Form GST EWB-04 on the portal
Errors in E-way bills can also attract penalties. Here’s what you need to know:
Incorrect Information
Providing incorrect details in the E-way bill may lead to penalties similar to those for non-generation, including fines and potential detention of goods
Cancellation of E-way Bills
If an E-way bill is generated but not utilised correctly, it can be cancelled within 24 hours of its generation. This is usually done when the goods are not transported as specified in the E-way bill and in other similar situations.
Consequences for Non-compliance
Failure to rectify mistakes in E-way bills may result in further legal actions, including fines and confiscation of goods
Impact on Supply Chain
Mistakes can lead to delays in transportation, affecting supply chain efficiency and potentially incurring additional costs for businesses
In conclusion, compliance with E-way bill regulations is essential to avoid severe penalties and operational disruptions. Businesses should ensure accurate generation and maintenance of E-way bills to facilitate the smooth movement of goods across India.
E-way Bill Penalty FAQs
Can the authorities detain the vehicle or seize the goods even if there’s an invoice and E-way bill?
No. If the vehicle has all the authentic documents, goods invoice and E-way bill, the authorities cannot seize the vehicle unless there's evidence that raises suspicion.
What's the time gap for updating both parts of the E-way bill?
Once Part A of the E-way bill has been successfully submitted, a unique number that's valid for 72 hours will be generated. Using that number, the Part B form can be filled.
What is the penalty for not generating Part B of the E-way bill?
The minimum fine for failing to generate any part of the E-way bill is ₹10,000. Either that or the transporter/owner will have to pay the total amount of tax that he/she is suspected of evading. The fined individual will have to pay the higher of the two amounts.
What happens if I refuse to pay an E-way bill?
If you refuse to generate an E-way bill, you may incur a fine of ₹10,000 or the tax amount evaded, whichever is higher. The vehicle and goods can be detained by authorities until the penalties are paid. Continued refusal may lead to legal proceedings against you.
Can we generate an E-way bill after the package is delivered?
Once a package has been delivered, you cannot generate or produce an E-way bill for that shipment. If you attempt to generate an E-way bill after delivery, it will not be valid for that shipment.
