Whenever there is a movement of goods of an aggregate value above Rs. 50,000, it is mandatory for the transporter to carry the invoice and the E-way Bill for the goods that are being transported.
E-way Bill rules apply to all transport goods, be it large cargo or other than a large load with different validities. (Considering that the consignment value is above Rs 50,000)
However, non-compliance to the E-way Bill rules can result in the penalties charged by the field officer or tax authority as they can demand the E-way Bill to the transporter at any point during transport of the goods.
Along with the E-way Bill or the EWB Number, the transporter is also expected to carry the invoice, delivery challan, or invoice bill as required.
This article will share some prescribed penalties on non-compliance with the E-way Bill rules under GST.
Monetary penalties for non-compliance with E-way Bill rules
As per the E-way Bill rules, if the value of the goods being transported exceeds the threshold of Rs 50,000, then the supplier is required to generate the E-way Bill from the E-way Bill system or any automated software using the E-way Bill APIs.
If the supplier is NOT a registered person, the recipient has to see if all the compliance requirements are met concerning the E-way Bill generation.
The supplier, recipient or the transporter himself should generate the E-way Bill as required.
What is the penalty if there is a failure in E-way Bill generation?
If the transporter fails to provide necessary documents upon enquiry to the designated officer, then the penalty would be Rs 10,000 or the amount of tax evaded, whichever would be higher.
It’s always a good practice to generate E-way Bill whenever you have generated your e-Invoice for the goods that will be transported.
You can use E-way Bill generation software like GSTHero to directly generate e-Invoice & E-way Bill right from your ERP without even visiting the E-way Bill portal.
Non-monetary penalties for non-compliance with E-way Bill rules
There can even be non-monetary implications for not complying with the E-way Bill rules under GST.
The designated officer can seize the vehicle transporting the goods without the E-way Bill or the relevant documents.
However, the seized vehicle shall be released on the payment of the due tax.
The designated officer has a legal right to confiscate the goods or the vehicle in case if the taxpayer fails to pay the imposed tax within seven days from the seizure of the vehicle & goods.
Other consequences of non-compliance with the E-way Bill rules
E-way Bill compliances should be taken seriously and should be at the highest priority before shipment of any goods above the threshold consignment value.
Besides charging of prescribed penalty, there are inevitable other consequences that may occur due to non-compliance with the E-way Bill rules:
If there is a break in the transport of goods, the supply chain will get disturbed, which will directly impact your business.
Untimely delivery of the goods may cause a demand-pull in your business, and your goodwill may get affected.
There can be some monetary consequences like loss in revenue or profits.
The efficiency of the business will get disturbed, and the smooth flow of the company shall be interrupted.
To avoid all these consequences, it is always a better idea to generate your E-way Bill for all the eligible consignments and stay away from further difficulties. You can use the E-way Bill generation software to generate E-way Bill directly from your existing ERP system.
E-way Bill generation is not a difficult task and should be the highest priority before shipment of the goods eligible for E-way Bill generation.
It is always better to be equipped with all the necessary documents while in transit than to suffer the consequences later.
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