The basic premise of generating E-Way Bill for inter-state and intra-state transportation of goods is to eliminate the chances of tax evasion. The E- Way bill lowers the chances of bribery and corruption and ensures smoother and efficient transport of goods across the nation.
However, many a times, businesses either fail to generate E- Way Bill or do it in a wrongful manner which attracts penal action. We hereby list various scenarios under which the registered person can be penalised for non-generation of e-way bills.
Penal Provisions on Non-Generation of E-Way Bills:
The GST office can penalise the owner of the conveyance or the taxpayer with a fine of Rs. 10,000 or the amount of the tax being evaded, (whichever is greater) if the person is caught
- Transporting any taxable goods without the cover of prescribed documents;
- Tampering or destroying any material evidence or document;
- Disposing off or tampering with any goods that have been detained, seized, or attached.
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:
In case the owner of goods comes forward: For taxable goods, the penalty equals 200% of tax payable. For exempt goods, the penalty is 2% of the value of goods or Rs 25,000, whichever is less.
In case the owner of goods does not come forward: For taxable goods, the penalty is equal to 50% of the value of goods or 200% of the tax payable on goods, whichever is higher. For exempt goods, 5% of the value of goods or Rs 25,000, whichever is less.
2. Detention and Seizure
The authorised officer, upon the observance of any discrepancy in the E-way bill or the absence of a valid E-way bill, has the rights to detain the vehicle and seize the goods. Merely detention and seizure doesn’t end the matter, further to this, the “Proper Officer” detaining or seizing goods or conveyances issues a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c). The goods can be released upon the payment of appropriate taxes and penalties, which can be accomplished in the below given ways:
- Owner Accepts Ownership: If the owner of the goods comes forward, the goods can be released on payment of the applicable tax and penalty equal to 100% of the tax payable on such goods. Similarly in case of exempted goods, on payment of an amount equal to 2% of the value of goods or Rs 25000, whichever is less.
- Owner Unidentified: Where the owner of the good does not come forward, the goods can be released on payment of the applicable tax and penalty equal to the 50% of the value of the goods reduced by the tax amount paid thereon. In case of exempted goods, on payment of an amount equal to 5% of the value of goods or Rs 25000, whichever is less.
The detained person can also provide a security bond in the form of bank guarantee that equals to the total penalised amount to the authorised officer.
No matter how stringent the Law & Orders are, there is always an “Opportunity of being heard” given to the person concerned. Also, on payment of amount referred above, all proceedings in respect of the notice specified herein shall be deemed to be concluded.
In case of failure of payment of the amount of Tax and Penalty, as stated above, within seven days of such detention or seizure, further proceedings shall be initiated.
However, if such products which are detained or seized are perishable or hazardous in nature or are likely to depreciate in value with passage of time this seven day period may be reduced by the “Proper Officer”.
If the registered person or the transporter fails to pay the implied penalty within 7 days, the authorised personnel can seize goods and/or the vehicle, and begin legal proceedings for the same. Upon confiscation of the goods, the ownership of the seized goods will be transferred to the central government, which on 3 months of confiscation can be auctioned by the authorised personnel and give the proceeds to the Central Government
What you can do?
For every Law and Order, there is a saviour counter provision, giving a little relief to the concerned person. Accordingly, in the event of confiscation, the officer adjudging the confiscation shall give an option to the owner of the goods to pay in lieu of confiscation, such fine as the said officer thinks fit. However, the fine levied shall not exceed the market value of the goods confiscated.
However, the penalty in such case should not be less than the amount of penalty levied under the provisions of Detention and Seizure.
- Provisions of the Act not only lay the ground for levy of penalty but also attract Fine. Such fine will be in addition to the penalty /tax imposed.
- Like any other provisions of the Act, an opportunity of being heard will be provided to the concerned person.
- Title of the goods/conveyances shall rest in hands of Government.
- After the proper officer is satisfied that the confiscated goods or conveyance are not required in any other proceedings under this Act and after giving reasonable time, not exceeding three months to pay fine in lieu of confiscation, can dispose of such goods or conveyance and deposit the sale proceeds thereof with the Government.
Prevention is better than cure!
We recommend timely generation of E-Way bills to avoid future penalties and fines.
IRIS Topaz is a smart E-way Generation Platform that helps you manage your Eway bills, right from the generation to its expiry. It is user friendly, self-explanatory and economical to operate. IRIS also offers a bulk E-way bill generation desktop utility. Features of IRIS Topaz:
- Generation and Cancellation of E-way bill,
- Update Part B of E-way bill,
- Extend validity,
- Assign the EWB to a transporter.
- Print a single or multiple EWBs in summary or detail.
Benefits of IRIS Topaz:
- Variety of Reports
- Easy Access to Data: Even if you use excel utility, your data is saved on web portal, hence is always available when required.
- Internal Validations: This saves from incorrect data getting posted.
For demo or any other queries