This article will help understand the penalty for non-generation of e-way bills. Readers are requested to go through every detail related to the topic to understand it better.
E-way bills must be carried to transport products across India, electronically created documents. With rare exclusions, it is required to move items worth more than ₹50,000. An individual EWay bill number (EBN) would be generated for each of these consignments that must be transported. The distance over which items are transported determines how long this EBN is valid. Authorized police may be given the order to stop any vehicle at specific checkpoints to verify the required documentation to implement this law. On receiving specific inputs about tax evasion, a physical inspection of the vehicle may also be done.
Not Generating an E-way Bill: What Can Be Some Significant Consequences?
Do you know that generating an e-way bill is mandatory if you are in the business of logistics? As per the rules of the Government of India, such bills are electronically generated at every tolling point in case of voluminous transportation of specified goods or commodities. Any kind of movement of goods valued above ₹50,000 could be included in the category of e-way bill generation. Failing to generate an e-way bill can call for a severe penalty to be paid immediately.
To understand the users, it is essential to note that a unique numbering system is followed in categorizing the transportation of goods or commodities by a single transporter or logistics service provider. This number is generated based on the distance of transportation of categorized commodities. Vehicles carrying goods or items are checked at the given checkpoints across the borders while transferring goods from one location to the other.
Effects Of Not Having An E-way Bill
The taxpayer may suffer monetary and non-monetary costs due to failure to produce and carry the EWay bill. Goods moving against the law are responsible for the following:
Financial Penalties
Moving goods without the protection of an invoice and Eway bill is illegal and is punishable by a fine of ₹10,000 or the tax being attempted to be evaded (whichever is greater). Therefore, ₹10,000 is the absolute lowest fine that can be imposed for breaking the laws.
Arrests And Seizures
If a vehicle is found to be moving goods without an Eway bill, it may be detained or seized and released only once the officer has received payment of the relevant tax and penalty. There are two possibilities for this:
- The owner must pay the total amount of the tax due if he wants to pay the penalty.
- If not, a fine of 50% of the value of the items shall be imposed.
In addition to the aforementioned legal repercussions, it is significant to remember that the taxpayer’s vehicle and property may also be impounded. This would imply that the lengthy delays at the checkpoints would impact the taxpayer’s supply chain.
Other Effects Of Failing To Generate An E-Way Bill
Supply-Chain Impediment
The supply-chain system will get clogged, which is the main effect of failing to generate an e-way bill. The lack of raw materials will ultimately cause the production system to suffer.
A Decrease In Business Revenue
Please comply with the e-way bill provisions to avoid causing the business’s revenue to plummet due to its ineffective manufacturing system.
The Effect On Goodwill
Due to legal action taken by the registration under gst authorities, non-compliance with the e-way bill clause may harm goodwill (especially for repeat offenders).
E-Way Bill Penalty Violation
The Government of India (GoI) has clarified that if the supplier of the goods or the transporter carrying goods has enrolled GST and GST e-way bill with minor mistakes, the enforcement agency shall enforce a punishment of ₹1000 to the registered business and the transport mechanism. This was done in response to repeated queries from the shareholders of the goods and truck drivers. On 14 September 2018, the GoI announced this step in a circular with 64/ 38/ 2018-GST. Therefore, if there are minor errors on the e-way bill when it is being transported, the provider or the transporter will only be responsible for a ₹1,000 fine. For each applicable consignment, the owner of the goods or the transporter must submit Form GST DRC-07 with the payment for the penalty.
What Occurs If The E-Way Bill And The Invoice Don’t Match?
As determined in the case of Agarwal Industries Pvt Ltd vs The Deputy Assistant Commissioner (ST) (IV), it is vital to note that the application of a penalty is forbidden when there is an error in one or two digits of the document number contained in the e-way bill (Andhra Pradesh High Court).
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The invoice value comprises the taxable, and GST amounts to determine the application
When submitting Part A of the Eway bill, a unique number must be produced. This number must be used to update Part B of the Eway bill and is valid for 72 hours.
As long as the updates are made throughout the validity period, there is no restriction on how frequently they can be made. The vehicle information should always correspond to the vehicle conveying the items. What is included in the invoice amount of ₹50,000 for determining whether an Eway bill is applicable?
Is there a deadline for updating Parts A and B of the Eway bill?
How many times can the Eway bill's Part B be updated?
Conclusion
We hope this article clarifies all queries about the generation of e-way bills failing which a penalty can be imposed for the service provider. Please contact Vakilsearch to know more.
