The article is in light of the Notification 39/2021-CT(R) dated 21.12.2021, wherein Central Government appoints 01.01.2022 as the date for various amendments made through Finance Act, 2021 to come into force. Amongst others, amendments to section 129 of CGST Act, ie, Detention, seizure and release of goods and conveyances wrt e-way bill contraventions, shall come into effect from 01.01.2022.
Relevant Provisions of section 129 of CGST Act prior and post 01.01.2022
|Particulars||Prior to 01.01.2022||Post 01.01.2022|
|In case owner of goods comes forward||Taxable Goods||Tax and penalty equal to 100% of the tax payable||Penalty equal to 200% of tax payable|
|Exempt Goods||2% of the value of goods or Rs 25,000, whichever is less|
|In case owner of goods does not come forward||Taxable Goods||Tax and penalty equal to 50% of the value of goods reduced by tax paid||Penalty equal to 50% of the value of goods or 200% of the tax payable on goods, whichever is higher|
|Exempt Goods||5% of the value of goods or Rs 25,000, whichever is less|
Further, time limits have been prescribed for issuance of notice as well as order in respect of goods and conveyance so detained. Notice for payment of penalty shall be issued within 7 days from date of detention and order shall be passed within 7 days from the date of such notice. Therefore, e-way bill proceedings under section 129 shall be concluded within 14 days from date of detention.
In addition to the above, if the transporter of owner of the goods does not pay the penalty within 15 days from the date of order, the goods or conveyance is liable to be sold or disposed of to recover the penalty. In case, the transporter pays the penalty as mentioned in table above or Rs 1,00,000, whichever is less, the conveyance shall be released. It is pertinent to note that such option was not available to the transporter prior to the amendment (01.01.2022)
Under the earlier provisions, there was ambiguity on whether taxes for supply of goods will have to be paid in addition to the taxes paid under section 129, specifically in light of ITC restriction under section 17(5)(i). Moreover, no mechanism was provided to adjust the taxes paid under section 129, in the GSTR 3B. With the amendment of provisions of section 129, by increase the penalty to 200%, the ambiguity is now put to rest.
Whether penalty needs to be paid even in case of minor offenses
Circular 64/38/2018-GST dated 14.09.2018 clarifies that in case the consignment of goods is accompanied with an invoice and also e-way bill, penalty under section 129 is not applicable and nominal penalty of Rs 1,000 shall be levied under section 125 of CGST Act, in the following cases:
a) Spelling mistakes in the name of the consignor or the consignee but the GSTIN, wherever applicable, is correct;
b) Error in the pin-code but the address of the consignor and the consignee mentioned is correct, subject to the condition that the error in the PIN code should not have the effect of increasing the validity period of the e-way bill;
c) Error in the address of the consignee to the extent that the locality and other details of the consignee are correct;
d) Error in one or two digits of the document number mentioned in the e-way bill;
e) Error in 4 or 6 digit level of HSN where the first 2 digits of HSN are correct and the rate of tax mentioned is correct;
f) Error in one or two digits/characters of the vehicle number.
While the Circular lists the scenarios mentioned above, various courts have taken liberal interpretation of the Circular and extrapolated to various scenarios wherever there is no revenue loss.
The detailed summary of such cases has been provided in our book “Madhukar Hiregange’s Practical Guide to E-way Bill under GST”, which is now available on Amazon (https://www.amazon.in/Madhukar-Hireganges-Practical-Guide-under/dp/ 9390176026)
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