21 Common Mistakes in E-Way Bill Compliance that Lead to GST Penalty

The e-way bill (EWB) mechanism is a pivotal element in the GST regime, designed to track the movement of goods and curb tax evasion. While it has simplified inter- and intra-state transport documentation, non-compliance—intentional or inadvertent—can attract hefty penalties, including up to 200% of tax payable under Section 129 of the CGST Act, 2017.

Based on my practice and experience handling complex EWB cases, here are 21 common mistakes businesses must avoid to ensure compliance and avoid penal consequences.

Here are 21 common errors businesses and transporters make:

1. Movement of Goods Without an E-Way Bill:

   • Mistake: Transporting goods exceeding the prescribed value threshold without generating a valid EWB.
   • Detail: Rule 138(1) mandates the generation of an EWB before the commencement of movement of goods in a conveyance. The value threshold is ₹50,000, but states can notify different thresholds for intra-state movement. Failure to generate an EWB when required is a direct contravention of this rule.
   • Legal Reference: Rule 138 of CGST Rules, 2017.
   • Penalty: Goods and conveyance are liable to detention or seizure. Penalty under Section 129(1) can be levied, which is equal to 200% of the tax payable if the owner of the goods comes forward, or 50% of the value of goods if the owner does not come forward. In cases indicating intent to evade tax, proceedings under Section 130 (confiscation) might be initiated, which can involve a penalty equivalent to the tax payable or the value of goods, whichever is higher, along with confiscation of goods and conveyance.

2. Incorrect Details in E-Way Bill:

   • Mistake: Entering inaccurate or incomplete information in the EWB, such as wrong GSTINs of supplier/recipient, incorrect invoice number, wrong HSN code, incorrect value of goods, wrong origin/destination pin codes, or incorrect vehicle details.
   • Detail: The EWB must accurately reflect the details of the consignment as per the underlying documents (tax invoice, bill of supply, delivery challan). Mismatches raise red flags during inspection and can lead to the EWB being treated as invalid. Rule 138(1) requires specified details to be furnished.
   • Legal Reference: Rule 138(1) of CGST Rules, 2017.
   • Penalty: Can lead to detention/seizure under Section 129, with penalties similar to moving goods without an EWB, as the EWB might be considered invalid due to material errors.

3. Expired Validity of E-Way Bill:

   • Mistake: Transporting goods after the validity period of the EWB has expired.
   • Detail: The validity of an EWB is calculated based on the distance specified in Part B. For every 200 km or part thereof, the validity is one day (excluding the day of generation). Movement beyond the validity period without proper extension is a violation. Rule 138(10) specifies the validity period.
   • Legal Reference: Rule 138(10) of CGST Rules, 2017.
   • Penalty: Goods and conveyance are liable for detention or seizure under Section 129, similar to movement without an EWB.

4. Using the Same E-Way Bill for Multiple Trips:

   • Mistake: Re-using an EWB generated for one consignment and one trip for subsequent or different trips.
   • Detail: An EWB is specific to a single consignment and its movement from origin to destination in a particular conveyance within the validity period. Using it for another trip, even if for similar goods, is not permissible.
   • Legal Reference: Implied by Rule 138, which links a single EWB to a single consignment and journey.
   • Penalty: The second or subsequent trip is effectively treated as movement of goods without a valid EWB, attracting penalties under Section 129 and potential confiscation under Section 130.

5. Not Updating Part B of E-Way Bill Before Movement:

   • Mistake: Generating Part A of the EWB (details of goods) but failing to update Part B (vehicle details) before the physical movement of goods begins.
   • Detail: A complete EWB (both Part A and Part B filled) is mandatory for the movement of goods, unless specifically exempted (e.g., movement up to 50 km within the same state from the consignor’s place to the transporter’s place for further transport). Rule 138(2) requires Part B to be updated.
   • Legal Reference: Rule 138(2) of CGST Rules, 2017.
   • Penalty: Movement without a fully updated EWB is considered movement without a valid EWB, leading to detention, seizure, and penalties under Section 129.

6. Vehicle Breakdown and No Revalidation/Update:

   • Mistake: If the original vehicle carrying the goods breaks down en route, and the goods are shifted to a new vehicle, failing to update the EWB with the new vehicle number.
   • Detail: Rule 138(5) allows updating the details of the conveyance in the EWB if the goods are transferred from one conveyance to another. Failure to do so means the EWB pertains to a vehicle that is no longer transporting the goods.
   • Legal Reference: Rule 138(5) of CGST Rules, 2017.
   • Penalty: The EWB becomes invalid for the goods in the new conveyance, potentially leading to detention, seizure, and penalties under Section 129.

7. Mismatch Between Invoice and EWB:

   • Mistake: Discrepancies between the details mentioned in the tax invoice, bill of supply, or delivery challan and the EWB, such as differences in value, quantity, HSN, or taxable amount.
   • Detail: The EWB must be generated based on the details of the underlying document for the supply. Any significant mismatch creates doubt about the authenticity of the transaction and the consignment.
   • Legal Reference: Rule 138(1) implies consistency with the underlying document. Rule 138A requires carrying the invoice/challan along with the EWB.
   • Penalty: Can lead to detention/seizure and penalties under Section 129, as the EWB might be deemed invalid or the transaction suspicious.

8. Incorrect Classification of Supply Type:

   • Mistake: Selecting the wrong transaction type in the EWB portal (e.g., selecting ‘Supply’ for goods sent for job work, ‘Export’ for inter-state sale, or ‘For Own Use’ for a branch transfer).
   • Detail: The type of supply/transaction (e.g., Outward Supply, Inward Supply, Export, Import, Job Work, SKD/CKD, Recipient Not Known, For Own Use, Exhibitions) is a crucial field in the EWB. An incorrect selection misrepresents the nature of movement and can cause issues during reconciliation or audit.
   • Legal Reference: Part A of FORM GST EWB-01 requires mentioning the ‘Supply Type’.
   • Penalty: While not always immediately penalized during transit if other details match, it can lead to scrutiny, audits, and potential issues with Input Tax Credit (ITC) for the recipient or tax implications for the supplier if the transaction type significantly impacts taxability or compliance.

9. Using Expired E-Way Bill Due to Extension Oversight:

   • Mistake: Failing to extend the validity of the EWB in time when the journey cannot be completed within the original validity period due to unavoidable reasons (e.g., road blocks, accidents, transhipment delays).
   • Detail: The validity of an EWB can be extended using Part B of FORM GST EWB-01. The extension can be requested within 8 hours before or 8 hours after the expiry of the current validity period. Failing to extend means the EWB expires, and any subsequent movement is non-compliant.
   • Legal Reference: Proviso to Rule 138(10) allows for extension of validity.
   • Penalty: Movement with an expired EWB attracts penalties under Section 129.

10. E-Way Bill Not Carried During Transit:

    • Mistake: The person in charge of the conveyance (usually the driver) does not carry the EWB (either physical printout or electronically accessible) during the movement of goods.
    • Detail: Rule 138A(1) mandates that the person in charge of a conveyance carrying goods of value exceeding the prescribed limit shall carry the invoice or bill of supply or delivery challan, as the case may be, and a copy of the EWB or the EWB number, either physically or mapped to a Radio Frequency Identification Device (RFID) as may be notified.
    • Legal Reference: Rule 138A(1) of CGST Rules, 2017 and Section 129(1) regarding documents verification.
    • Penalty: The goods and conveyance are liable for detention or seizure under Section 129 for non-production of the required documents.

11. Multiple Consignments Without Consolidated E-Way Bill:

    • Mistake: A transporter carrying multiple consignments in a single conveyance fails to generate a consolidated EWB for all the individual EWBs.
    • Detail: If a transporter is carrying multiple consignments belonging to different consignors/recipients in one vehicle, they must generate a consolidated EWB by consolidating all the individual EWBs for those consignments. This facilitates easier verification at check posts. Rule 138(7) provides for the generation of a consolidated EWB.
    • Legal Reference: Rule 138(7) of CGST Rules, 2017.
    • Penalty: While not carrying a consolidated EWB might not always lead to penalty if all individual EWBs are valid and available, it can cause significant delays during inspection and may be viewed as non-compliance with procedural requirements, potentially attracting general penalties under Section 122 for contravention of rules.

12. Transporting Goods Under Wrong GSTIN:

    • Mistake: Generating an EWB using a GSTIN that is not relevant to the actual transaction or the entity dispatching/receiving the goods (e.g., using the head office GSTIN for goods dispatched from a branch that has a separate registration).
    • Detail: The EWB should reflect the GSTINs of the actual supplier and recipient involved in the transaction. Using an incorrect GSTIN misrepresents the parties to the transaction.
    • Legal Reference: Part A of FORM GST EWB-01 requires correct GSTINs of the supplier and recipient.
    • Penalty: This can be treated as providing incorrect details (Point 2) or attempting to misrepresent the transaction, leading to detention, seizure, and penalties under Section 129. It can also impact the recipient’s ability to avail ITC.

13. Not Cancelling E-Way Bill When Movement Doesn’t Happen:

    • Mistake: Generating an EWB for a planned movement but failing to cancel it within the stipulated time if the goods are not moved as planned.
    • Detail: An EWB generated but where goods are not transported according to the details furnished in the EWB can be cancelled electronically. The cancellation must be done within 24 hours of generation. Rule 138(9) allows for cancellation.
    • Legal Reference: Rule 138(9) of CGST Rules, 2017.
    • Penalty: Although not immediately penalized during transit, unused EWBs that are not cancelled can create discrepancies in the system, leading to unnecessary inquiries, audits, and potential scrutiny by tax authorities regarding fictitious transactions or attempts at circular trading. While a specific penalty under Section 129/130 might not apply solely for failure to cancel, it can be evidence used in other proceedings.

14. Failure to Generate EWB by Unregistered Transporter:

    • Mistake: An unregistered transporter transporting goods of a registered person where the EWB has not been generated by the consignor/consignee, and the transporter fails to generate it themselves.
    • Detail: If the consignor or consignee (who is a registered person) fails to generate the EWB, the transporter is required to generate it before moving the goods, provided the value exceeds the threshold. Even unregistered transporters need to enroll on the EWB portal to generate EWBs. Rule 138(3) clarifies this.
    • Legal Reference: Rule 138(3) of CGST Rules, 2017.
    • Penalty: Movement without a valid EWB, attracting Section 129 penalties.

15. Transport Without E-Invoice Where Applicable:

    • Mistake: For businesses mandated to issue e-invoices based on turnover thresholds, transporting goods without an invoice that has been successfully registered on the Invoice Registration Portal (IRP) and obtained an Invoice Reference Number (IRN). The EWB is often generated directly from the e-invoice system.
    • Detail: E-invoicing is mandatory for certain classes of registered persons. The e-invoice contains a QR code which includes the EWB number (if generated along with the e-invoice). Transporting goods without a valid e-invoice (where applicable) and its associated EWB is a significant compliance failure.
    • Legal Reference: Section 122(1)(i) of CGST Act, 2017 imposes a penalty for supplying goods without a valid tax invoice. Rule 48(4) mandates e-invoicing for specified persons. EWB generation is often linked to e-invoicing via Rule 138.
    • Penalty: Penalty under Section 122(1)(i) (₹10,000 or tax evaded, whichever is higher) for not issuing a proper invoice. Also subject to detention/seizure and penalties under Section 129 for movement without a valid EWB/documentary backing.

16. Transport Beyond Valid Distance:

    • Mistake: Specifying a shorter distance in the EWB than the actual or likely distance of travel, leading to premature expiry of the EWB validity during transit.
    • Detail: The validity is tied to the distance. Understating the distance directly reduces the validity period. If the conveyance is intercepted after the shortened validity period has expired, it is treated as movement without a valid EWB. The EWB portal uses standard distances based on pin codes, but actual routes can vary. Taxpayers should use appropriate distance based on common routes.
    • Legal Reference: Rule 138(10) links validity to distance.
    • Penalty: Movement with an expired EWB attracts penalties under Section 129.

17. Wrong Selection of Document Type:

    • Mistake: Choosing an incorrect document type in the EWB, such as selecting ‘Delivery Challan’ for a supply that requires a ‘Tax Invoice’.
    • Detail: The EWB generation requires specifying the underlying document type (Tax Invoice, Bill of Supply, Delivery Challan, Bill of Entry, etc.). Using the wrong document type misrepresents the nature of the movement and the transaction’s tax implications.
    • Legal Reference: Part A of FORM GST EWB-01 requires selecting ‘Document Type’.
    • Penalty: Can lead to scrutiny and potential challenges to the validity of the EWB or the underlying transaction during audit or inspection, potentially resulting in penalties under Section 122 or Section 129 if the mismatch is deemed material.

18. Rejection of Goods and No Return EWB:

    • Mistake: When goods are rejected by the recipient and returned to the supplier, failing to generate a new EWB for the return movement.
    • Detail: The movement of rejected goods back to the supplier is a distinct movement requiring a fresh EWB, typically generated by the person returning the goods (the recipient, if registered, or the transporter/supplier on behalf of an unregistered recipient), referencing a debit note or a return delivery challan.
    • Legal Reference: Rule 138 applies to all movements of goods above the threshold, including returns.
    • Penalty: The return movement without a valid EWB is non-compliant, attracting penalties under Section 129 and potential confiscation under Section 130.

19. Transporting Goods in Personal Vehicle Without EWB:

    • Mistake: Assuming that using a personal vehicle for transporting goods exceeding the threshold value exempts the movement from EWB requirements.
    • Detail: The GST law refers to “conveyance,” which includes any vehicle used for transport. The mode of transport (commercial or personal vehicle) does not exempt the requirement to generate an EWB if the value threshold is crossed and the movement type is covered by the rules.
    • Legal Reference: Rule 138(1) refers to movement in a “conveyance.” Section 2(35) defines “conveyance” broadly.
    • Penalty: Movement without a valid EWB, subject to Section 129 penalties.

20. Inter-State Movement Without EWB for Exempted Goods:

    • Mistake: Assuming that because certain goods are exempted from GST, their inter-state movement does not require an EWB.
    • Detail: While certain goods are exempt from GST, Rule 138(14) lists specific goods (like LPG, kerosene under PDS, postal baggage, etc.) for which EWB is not required. Unless the specific goods are listed in this exemption list (Annexure to Rule 138), an EWB is generally required for inter-state movement if the value exceeds the threshold, even if the goods themselves are otherwise exempt from GST. This is because the EWB system tracks movement regardless of taxability status unless specifically exempted.
    • Legal Reference: Rule 138(1) applies generally; Rule 138(14) provides specific exemptions.
    • Penalty: Movement of taxable or non-taxable goods (if not in the exempted list) without an EWB attracts Section 129 penalties.

21. Misuse of EWB in Circular Trading:

    • Mistake: Generating EWBs and associated invoices for fictitious transactions where no actual movement of goods takes place, often to create fake ITC or inflate turnover.
    • Detail: This is a serious form of tax evasion where documentation is created to simulate genuine trade. While EWBs are generated, they are not backed by actual movement. This is often detected through data analytics, verification at premises, or checking vehicle movements.
    • Legal Reference: Section 122(1)(ii) for issuing invoices without supply, Section 122(1)(vii) for taking/passing on ITC on invoices without supply, and Section 132 (prosecution) for serious offences including issuing/using fake invoices and availing fraudulent ITC. Section 130 (confiscation) is also applicable.
    • Penalty: Attracts stringent penalties under Section 122 (₹10,000 or tax evaded, whichever is higher), potential prosecution under Section 132 leading to imprisonment, and confiscation of goods (even if only documented) and conveyance (if used in any part of the scheme) under Section 130.

Conclusion: Prevention Over Penalty

E-way bill compliance is not just procedural but a key indicator of business integrity under GST. With increased data analytics and field enforcement, authorities are tightening checks on vehicle movement, invoice matching, and e-way documentation. Avoiding these 21 pitfalls ensures smooth logistics and avoids revenue loss.

For businesses, training logistics teams, using automated ERP-integrated EWB solutions, and conducting periodic audits is essential. As GST practitioners, we must proactively support clients in compliance to prevent disruptions and penalties.