Introduction
Whenever a company or venture needs to move goods whose value exceeds Rs 50,000, must generate a mandatory electronically generated bill or e-way bill. Individuals must get a unique e-way bill number abbreviated as EBN to transport every consignment even when there are a few exceptions. Every EBN’s validity depends on the distance of the transported goods.
Furthermore, e-way bill amount may vary according to different Indian states. Authorized officers may enforce the rule by intercepting vehicles at different checkposts to verify the mandatory documents. Moreover, he conducts physical verification of the goods vehicle to get specific inputs on tax evasions. Now, the question is what should the authorized officers do in case of violating the mandatory requirements. For this, we have discussed the consequences of crossing e-way bill limits state-wise and country-wise.
Penalty Provisions in E-way Bill
The penalties for breaching state-wise e-waybill thresholds or country-wise thresholds are applicable in the following sections –
| Sections of the CGST Act | Consequences as Fines/Other Penalties |
| Section 129 (1) |
|
| Section 129 (3) | Seizure/Detention of Transported Goods |
| Section 129 (3) | Proper Officer should issue the Seizure/Detention Notice within 7 days |
| Section 129 (4) | The Opportunity of Hearing is Compulsory |
| Section 130 | Penalty Levy and Confiscation of Conveyances and Goods |
| Section 125 |
|
Also Read: What Are The Penalties For Not Generating An E-Way Bill?
Amendments in the CGST Act
Other than a few legal implications of exceeding e-waybill limits, CGST rules have undergone certain amendments based on the following conditions –
| Sections | Pre-Amendment Provisions | Amended Provisions |
| Section 129 1 (a)
Case- When the owner or the concerned person comes forward |
For Taxable Goods –
Tax and 100% of the payable tax as the penalty amount for |
For Taxable Goods –
Only Penalty of 200% of the payable tax |
| Section 129 1 (b)
Case- When the owner stays anonymous |
For Taxable Goods –
Combination of the tax and 50% of the total goods value deducted by the payable tax |
For Taxable Goods –
A penalty of more than 50% of the overall goods’ value or 200% of payable tax on the goods |
There is no amendment for exempted goods in either of the cases explained here.
Explanations on Consequences
Penalties
According to the CGST Act Section 129 (1), the taxpayer or the conveyance owner must pay a penalty for the violation of the state-specific e-way bill limit. Here, the penalty or fine amount will be Rs. 10,000 or the evaded tax amount (whichever will be higher). The penalty or violation conditions are as follows-
- Transportation of taxable goods without their prescribed documents
- Destroying or tampering with any document or material evidence
- Tampering or disposing of any attached, detained, or seized goods
Excluding this, GST officers will impose a penalty amount of Rs 100 for the distance traveled per kilometer while transporting the goods without a valid e-way bill.
Consequences of Minor Data-related Mistakes in the Consignment
Every consignment of transported goods should accompany a delivery challan/tax invoice and an e-way bill. However, GST officers do not initiate any consignment even if it has an e-way bill and the mandatory documents in the following situations –
- Any spelling mistake in the names of the consignee, consignor, or error in GSTIN
- PIN code error but the address of the involved parties is correct
- Error in the consignee’s address up to the extent that other details, including the locality of the consignee, are correct
- Error in any one of the digits in the mentioned document numbers of the e-way bill
- Error present in the 4-digit or 6-digit HSN level, where HSN’s first 2 digits and the mentioned taxation rates are correct.
- Error in any one or two digits/characters of the transported vehicle number.
In each of these situations, both consignors and consignees are bound to pay an amount of Rs 1000 to the respective state categorized under the fines for surpassing state-specific e-way bill limits. Furthermore, one should pay a penalty of Rs 500 according to Section 125 of the CGST Act.
Seizure and Detention for Non-Generation of E-way Bills
CGST Act’s Section 129 (3) allows both seizure and detention of transported goods without the compulsory e-way bill. The authorized officer may seize your consignment or goods and detail your vehicle without a valid E-way bill or any discrepancy in it.
However, the matter does not end with only seizure and detention. Instead, the “Proper Officer” who seized or detained your goods and conveyances issue a legal notice as well. The notice specifies the penalty or tax payable and passes an order to pay the respective tax/penalty under clause (a)/(b)/(c) whichever is applicable.
Conditions of the Legal Notice
- The Proper Officer in charge of the seizure or detention must issue the legal notice within a single day or 24 hours of the seizure or detention.
- The notice should specify every valid reason related to seizure or detention and the person, to whom the officer will release the goods or conveyances.
Also Read: What Are The Consequences Of Not Generating An E-Waybill For Job Work?
Cases Related to the Release of Goods on the Payment of Taxes/Penalties
The Proper Officer will release the goods and conveyances on the payment of taxes or penalties for exceeding the state threshold for e-way bills in the following ways-
The Owner will Accept the Ownership
In this case, the owner of the goods and conveyances comes forward and pays the applicable penalty amount or tax to release his goods. According to Sections 108, 109, 133, and 122 with the amended Section 129 of the CGST Act, the concerned person must pay a penalty of about 200% of the payable tax within only 7 days from the issuing date of the notice. In contrast, owners should pay about 2% of the overall goods’ value or Rs 25,000 (whichever will be less) for exempted goods.
Anonymous/Unidentified Goods Owner
Here, the owner of the goods stays anonymous or does not go ahead to pay the tax/penalty amount. In this case, one can release the goods by paying the applicable tax. Besides, the penalty amount will be the difference between 50% of the overall value of the goods and the paid tax amount thereon. On the other hand, one should pay Rs 25,000 or 5% of the total value of goods (whichever will be less) for exempted goods.
Legal Hearings and Legal Proceedings
The detained person will even provide a security bond as a bank guarantee equal to the overall penalized amount to the Proper officer. Regardless of the stringent Law and Order, the concerned person gets the ‘Opportunity of Legal Hearing’ in the court. Also, every proceeding specific to the legal notice will end once the concerned pays the tax and/or penalty amount to the authorized officer.
If the concerned person fails to pay the Penalty and Tax amount within one week or seven days of the respective seizure or detention, the authorized officer may initiate further proceedings. However, if the seized or detained products are hazardous, perishable, or tend to depreciate with time, the Proper Officer will reduce the 7 days.
Also Read: Legal Provisions And Penalties Associated With E-Waybill Non-Compliance
Conclusion
Both penalties for exceeding the e-way bills state-wise or non-generation of e-way bills hurt companies in today’s business environment. Every business should therefore consider e-way bills as a crucial aspect of the CGST regime in India and transport their goods within or across states in the country.
Frequently Asked Questions
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What are the threshold limits for e-way bills in different Indian states?
The threshold limits for e-way bills vary among Indian states. However, it is Rs 50,000 in most of the states.
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From where can we generate an e-way bill to accomplish interstate transportation?
You may generate your e-way bill for interstate transportation directly from the official website of the e-way bill system.
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What are the conditions for getting an e-way bill while transporting within states?
A person should possess an e-way bill while transporting goods within/across Indian states under the following conditions-
- Interstate or within the state outward supply
- Inward supply from interstate, from within a state, or from any unregistered individual
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What will be the penalty amount related to state-wise e-way bill violations?
The concerned person should pay a penalty amount of Rs 10,000 for moving goods without a valid state-wise e-way bill in any Indian state.
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Is possessing an e-way bill mandatory to transfer goods exceeding Rs 50,000?
Every registered and taxable person under GST should possess a valid e-way bill for transporting goods more than Rs. 50,000.
