The article begins with the recent issue of transporters’ concerns over penalties that could arise from expired electronic way (e-way) bills. Amidst a national lockdown, which began on 15th March 2020, truckers all over the country were left stranded. This situation prompted a group of truckers to petition the Ministry of Finance, highlighting their inability to extend e-way bills due to office closures, unavailability of staff, and closed godowns. They asked the Ministry to issue timely guidelines to GST Commissioners across all states and union territories. Such guidelines would permit vehicles in transit and undelivered goods to reach their destinations smoothly, even if the e-way bill had expired, without the risk of scrutiny or penal provisions.
Understanding Electronic Way Bill
An e-Way Bill serves as a compliance mechanism where the individual initiating the movement of goods digitally uploads relevant information before the goods start moving. This information is used to generate an e-way bill on the GST portal. Essentially, an e-way bill is a technology-based framework that tracks the movement of goods, both intrastate and interstate if their value goes beyond Rs 50,000 for sales over 10 km in the Goods and Services Tax (GST) regime. When an e-way bill gets generated, a unique E-way Bill Number (EBN) gets allocated to the supplier, recipient, and transporter. The system was introduced to facilitate quicker movement of goods, improve the turnaround time of vehicles, boost the logistics industry by increasing average distances traveled, reducing travel time, and cutting costs.
E-way Bill Rules
As per the notified e-way bill rules, every supplier must register online on the e-way bill portal before moving their goods. This registration allows tax officials to scrutinize the e-way bill at any point during transit to prevent tax evasion. The rules also state that conventional cargo permits (excluding over-dimensional cargo) are valid for one day for movement of goods up to 100 km, and in the same proportion for subsequent days. Though e-way bills generally cannot be extended, there are exceptions where a commissioner can extend the validity period through a notification for certain categories of goods.
Penalties and Compliance
The rules impose penalties for moving goods without generating a valid e-way bill. If found in violation, tax authorities may impose a fine of Rs 10,000 or an amount equal to the tax that was sought to evade, whichever is higher. In such situations, both the goods and the vehicle carrying them can be seized or detained. The transporter can regenerate an e-way bill before it expires, but after expiration, no regeneration linked to the same invoice is allowed.
