The e Way Bill has been introduced as an anti-tax evasive mechanism that will help the government to plug in the leakage in revenue. It has substituted the Way Bill of the earlier VAT-excise regime.
A consignor/consignee/transporter is obligated under GST law to generate the Electronic Way Bill. The Bill has to be generated for the transportation of any consignment that is valued at over Rs. 50,000. However as per Notification No 15E/2018- State Tax issued by Commissioner of State Tax, Maharashtra State, no e-way bill shall be required to be generated for the intra-state movement in the state of Maharashtra, in respect of any goods not exceeding RS 1 Lakh and in respect of Hank, Yarn, fabric and Garments if are transported for a distance of up to fifty kilometers within the state of Maharashtra for the purpose of Job work of any value.
The GST law stipulates that designated field officers can intercept vehicles carrying goods. The officers can check documents like invoices and e-Way Bills. The verification process can be conducted at any time and at any place by mobile squads as check posts have been abolished under GST.
If any vehicle transports goods without the Digital e Way Bill, authorities can detain and seize the vehicle containing the goods. The goods are only released when the appropriate tax and penalty are paid. If the requisite tax and penalty are not paid within seven days of the detention, authorities can confiscate both the goods and the vehicle.
e-Way Bill System Enhancements in e-Way Bill System (23.04.2019)
4 Forthcoming changes in e-Waybill system (25.03.2019)
There are several consequences for not generating and carrying the e Way Bill:
a) It may so happen that tax has been paid on the basis of an invoice generated for the supply of goods but the e Way Bill has not been generated. In such a case, there is no tax-related implication. However, if caught, the authorities may levy a fine of Rs. 10,000.
Even if the appropriate taxes are paid, the authorities can allege that the e Way Bill was not generated as the consignor wanted to evade paying the applicable tax. Therefore, the authorities will be in their limits to impose a penalty that is equivalent to the tax amount being evaded.
b) Seizure of goods may result in disruption of routine operations of a business. Other businesses may not be able to allow for the delay in delivery or receipt of goods due to confiscation during transit.
c) Any proceeding for non-compliance against any business is sufficient to put a dent in that business’s reputation. The authorities could take action on other GST assessments. Furthermore, there is always a chance of future consignments being stopped and checked by authorities. This will lead to unnecessary hassles.
Central Board of Indirect Taxes and Customs has issued Notification No. 22/2019- Central Tax dated 23-04-2019 and appointed 21-06-2019 as the date from which the provisions of the Central Goods and Service Tax (Fourteenth) Amendment Rules, 2018 Rule 12 of (Notification No. 74/2018 – Central Tax dated 31st Dec 2018 shall come into force.
Rule 12 as mentioned above is reproduced as below
12. In the said rules, after rule 138D, from a date to be notified later (now notified date is 21-06-2019), the following rule shall be inserted, namely:-
“138E. Restriction on furnishing of information in PART A of FORM GST EWB-01.- Notwithstanding anything contained in sub-rule (1) of rule 138, no person (including a consignor, consignee, transporter, an e-commerce operator or a courier agency) shall be allowed to furnish the information in PART A of FORM GST EWB-01 in respect of a registered person, whether as a supplier or a recipient, who,— (a) being a person paying tax under section 10 (paying tax under Composite scheme), has not furnished the returns for two consecutive tax periods; or (b) being a person other than a person specified in clause (a), has not furnished the returns for a consecutive period of two months: Provided that the Commissioner may, on sufficient cause being shown and for reasons to be recorded in writing, by order, allow furnishing of the said information in PART A of FORM GST EWB 01, subject to such conditions and restrictions as may be specified by him: Provided further that no order rejecting the request of such person to furnish the information in PART A of FORM GST EWB 01 under the first proviso shall be passed without affording the said person a reasonable opportunity of being heard: Provided also that the permission granted or rejected by the Commissioner of State tax or Commissioner of Union territory tax shall be deemed to be granted or, as the case may be, rejected by the Commissioner. Explanation:– For the purposes of this rule, the expression ―Commissioner‖ shall mean the jurisdictional Commissioner in respect of the persons specified in clauses (a) and (b).
So after 21-06-2019 if Supplier or receiver has not furnished the return of two consecutive tax periods then Part ‘A’ of Form GST EWB-01 shall be disallowed to be furnished by any person including a consignor, consignee, transporter, an e-commerce operator or a courier agency. So if Supplier or Receiver has not filed April 2019 & May 2019 GST returns if they are supposed to file monthly return then from 21-06-2019, PART ’A ‘of Form GST EWB-01 shall not be allowed to be filed by any person including a consignor, consignee, transporter, an e-commerce operator or a courier agency.
However the jurisdictional Commissioner may, on sufficient cause being shown and for reasons to be recorded in writing, by order, allow furnishing of the said information in PART ‘A’ of FORM GST EWB 01, subject to such conditions and restrictions as may be specified by him. Commissioner may also reject the request after affording the said person a reasonable opportunity of being heard.
So timely furnishing of GST Returns is a necessity if E-WAY Bill is to be generated.
Forthcoming changes in e-Waybill system Dated 25-03-2019
1. Auto calculation of route distance based on PIN code for generation of EWB. Now, E-waybill system is being enabled to auto calculate the route distance for movement of goods, based on the Postal PIN codes of source and destination locations. That is, the e-waybill system will calculate and display the actual distance between the supplier and recipient addresses. User is allowed to enter the actual distance as per his movement of goods. However, it will be limited to 10% more than the displayed distance for entry. That is, if the system has displayed the distance between Place A and B, based on the PIN codes, as 655 KMs, then the user can enter the actual distance up to 720KMs (655KMs + 65KMs). In case, the source PIN and destination PIN are same, the user can enter up to a maximum of 100KMs only. If the PIN entered is incorrect, the system would alert the user as INVALID PIN CODE. However, he can continue entering the distance. Further, these e-waybills having INVALID PIN codes are flagged for review by the department.
Route distance calculation between source and destination uses the data from various electronic sources. This data employs various attributes, for example: road class, direction of travel, average speed, traffic data etc. These attributes are picked up from traffic that is on National highways, state highways, expressways, district highways as well as main roads inside the cities. A proprietary logic is then used for approximating the distance between two postal pin codes. The distance thus derived is then provided as the motorable distance at that point of time.
As, many factors are considered in auto calculating distance so chances of more than 10% variation (which is not allowed ) by user while entering the actual distance as per his movement of goods and auto calculation of route distance by system will be remote. The said change is a welcome change & would like to stop entering fake distance in km by user.
2. Blocking of generation of multiple E-Way Bills on one Invoice/document Based on the representation received by the transporters, the government has decided not to allow generation of multiple e-way bills based on one invoice, by any party – consignor, consignee and transporter. That is, once E-way Bill is generated with an invoice number, then none of the parties – consignor, consignee or transporter – can generate the E-Way Bill with the same invoice number. One Invoice, One E-way Bill policy is followed. The change will come in the next version.
One Invoice, One E-way bill is also a welcome change to find out correct consignment value per E-way bill per Invoice no. So Government will get correct Management Information System (MIS). Also one has to decide beforehand who will generate E – Way bill consignor, consignee or transporter.
3. Extension of E-Way Bill in case Consignment is in Transit the transporters had represented to incorporate the provision to extend the E-way Bill, when the goods are in transit. The transit means the goods could be on Road or in Warehouse. This facility is being incorporated in the next version for the extension of E-way Bill.
During the extension of the e-way bill, the user is prompted to answer whether the Consignment is in Transit or in Movement. On selection of In Transit, the address details of the transit place need to be provided. On selection of In Movement the system will prompt the user to enter the Place and Vehicle details from where the extension is required. In both these scenarios, the destination PIN will be considered from the PART-A of the E-way Bill for calculation of distance for movement and validity date. Route distance will be calculated as explained above.
4. Blocking of Interstate Transactions for Composition dealers. As per the GST Act, the composition tax payers are not supposed to do Interstate transactions. Hence next version will not allow generation of e-way bill for inter-state movement, if the supplier is composition tax payer. Also, the supplies of composition tax payers will not be allowed to enter any of the taxes under CGST or SGST for intrastate transactions. In case of Composition tax payer, document type of Tax Invoice will not be enabled.
More system controls are introduced in E – way bill system for composition tax payers which are in line with GST Act.
Below is the data of e-way bills for the year 2018-2019
One year of successful Journey (2018 – 19)
|No. of e-way bills generated||5577 Lakhs|
|No. of inter-state e-way bills generated||2487 Lakhs|
|No. of intra-state e-way bills generated||3090 Lakhs|
|No. of Tax Payers Registered in EWB||28.89 Lakhs|
|No. of Transporters enrolled in EWB||0.41 lakh|
Few case laws on E-Way Bills
1) After the case of Madhya Pradesh High Court, bench at Indore, W.P. No 12399 of 2018, Kintetsu Express Pvt Ltd V/S Commissioner, Commissioner Tax of MP & others, we will come to know the importance of generation of correct e-way bill.
Treating the e-way bill as merely a ‘procedural’ requirement can have serious consequences, as the Madhya Pradesh High Court’s dismissal of a petition makes the same quiet clear. The petitioner is a Private Limited Company engaged in the business of muti model transportation of shipments, supply chain management and other allied services such as door to door pick-up and delivery of the shipments etc. Under the SGST Rules, the petitioner was required to carry an e-way bill generated in Form GST EWB-01, with details filled in both Part A and Part B of the form. The petitioner, however, had not filled details of conveyance in Part B of the e-way bill. The vehicle was intercepted by the authorities and since Part B of the form was incomplete, the authorities passed an order demanding tax on the value of the goods Rs 19,52,264 as well as a penalty equal to the tax liability. The penalty was subsequently increased to the value of the goods (INR 1,12,61,419) as the owner of the goods appears to have failed to present himself before the authorities.
Aggrieved by the order and the rejection of its appeal before the Appellate Authority, the petitioner filed a writ petition before the Madhya Pradesh High Court. The High Court dismissed the writ petition against the order of the Appellate Authority, observing that:
2) In ‘Vikram Solar Private Limited V. Union of India’ – 2018 (4) TMI 1139 – ALLAHABAD HIGH COURT (decided on 04.01.2018) the petitioner has challenged the seizure order dated 16.12.2017 passed under section 129(1) of UPGST Act. A show cause notice was issued in this regard under section 129(3) of the Act. The goods have been carried from West Bengal to Ghaziabad. The ground for seizure is that the E-way bill had not been downloaded. It has come on record that before seizure there was some problem in downloading the E-way Bill. The High Court directed to release the vehicles and goods subject to deposit of bank guarantee, equal to the value of the tax on goods.
3) In ‘Abicor and Binzel Technoweld Pvt. Ltd. Versus The Union of India and Another’ – 2018 (2) TMI 766 – BOMBAY HIGH COURT, the petitioner says that the Electronic Way Bills Rules have yet to come into force. Therefore, without access to the online profile, the petitioner cannot generate E-way bills. Without such E-way bills, the petitioner will not be allowed to move the goods anywhere and that will paralyze its business. Lack of access would mean that the petitioner is unable to file return or pay tax or undertake any other compliance required by the statute. The High Court held that the special sessions of Parliament or special or extraordinary meetings of Council would mean nothing to the assessees unless they obtain easy access to the website and portals. The regime is not tax friendly. The High Court hoped and trusted that those in charge of implementation and administration of this law will at least now wake up and put in place the requisite mechanism.
4) In ‘M/s Vinayaga Roofings V. Asst. State Tax Officer’ – 2018 (5) TMI 368 – KERLA HIGH COURT (decided on 27.04.2018) the petitioner challenges the detention of his vehicle ordered. He says that the primary reason is that the consignment was not supported by e-way bill and though he concedes that this is a violation of the statutory rules, he offers to furnish bank guarantee for the entire amount for releasing the vehicle. The High Court ordered the petitioner to furnish a bank guarantee for an amount of Rs. 1,12,148/-, and on the petitioner executing a bond under Rule 140(1) of the CGST Rules. As soon as the bank guarantee is furnished and the bond is executed, the vehicle will be released to the petitioner.
1) The e Way Bill has been introduced as an anti-tax evasive mechanism that will help the government to plug in the leakage in revenue.
2) Consequences of not generating E Way bill as per GST Acts & Rules are very high which is explained by giving few case laws on E Way bills so one has to be careful while generating E Way bills.
3) Whether consignor, consignee or transporter will generate e way bill is to be decided beforehand as now One Invoice, One E Way Bill policy will be followed. One Invoice, One E-way bill is also a welcome change to find out correct consignment value per E-way bill per Invoice no. So Government will get correct Management Information System (MIS).
4) Now, E-waybill system is being enabled to auto calculate the route distance for movement of goods, based on the Postal PIN codes of source and destination locations. User is allowed to enter the actual distance as per his movement of goods. However, it will be limited to 10% more than the displayed distance for entry.
5) After 21-06-2019 if Supplier or receiver has not furnished the return of two consecutive tax periods then Part ‘A’ of Form GST EWB-01 shall be disallowed to be furnished by any person including a consignor, consignee, transporter, an e-commerce operator or a courier agency. So timely furnishing of GST Returns is a necessity if E-WAY Bill is to be generated.
Prepared by CA Jinesh P. Gada, B.Com, A.C.A, ISA, M.B.A., DIP (IFR), U.K., Head of Accounts & Taxation – HBS Realtors Pvt Ltd.