Eway Bill penalty Provision under GST Act
Eway bill is an electronically generated document mandatory, to be carried for movement of goods across India. It is necessary for the movement of goods worth more than Rs. 50,000 with some exceptions [ Read Rule 138 of CGST Rules ]. Eway bill penalty can be imposed by the GST officer if non compliance is made to GST Act or rules .Here we have dicussed various Types of penalty for not making eway bill under GST.
Video on Eway Bill Penalty
General Penalty if Eway Bill not Generated
If e-way bills, wherever required, are not issued in accordance with the provisions contained in Rule 138 of the CGST Rules, 2017, the same will be considered as contravention of rules
As per Section 122 of the CGST Act, 2017 (Penalty for certain offences), a taxable person who transports any taxable goods without the cover of specified documents [ Point no xiv] (e-way bill is one of the specified documents) shall be liable to a penalty of
- Rs. 10,000/- or
- Tax sought to be evaded (wherever applicable)
whichever is greater
Detention or seizure of Goods if Eway bill not generated
As per Section 129 of CGST Act, 2017 (Detention, seizure and release of goods and conveyances in transit. ), where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released,—
| (a) | on payment of the applicable tax and penalty equal to one hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty; | |
| (b) | on payment of the applicable tax and penalty equal to the fifty per cent of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty; | |
| (c) | upon furnishing a security equivalent to the amount payable under clause (a) or clause (b)in such form and manner as may be prescribed: |
No detention or seizure without serving order :-
No such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods. [Proviso to section 129(1) of CGST Act. ]
Provisional release on bond and security or on payment of Taxes
Under section 67(6) of CGST Act, goods can be released on execution of bond with security or on payment of applicable tax, interest and penalty payable, as the case may be.
The provisions of section 67(6) shall, mutatis mutandis, apply for detention and seizure of goods and conveyances – Section 129(2) of CGST Act.
Passing of order after seizure or provisional release
The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c) – Section 129(3) of CGST Act.
Deputy/Assistant Commissioner of Central Tax has been designated as ‘proper officer’ for the purpose of section 129(3) of CGST Act 2017 – CBE&C circular No. 3/3/2017-GST, dated 5-7-2017 [State Government will prescribe ‘proper officer’ for purpose of SGST in the respective State].
Opportunity to the Person
No tax, interest or penalty shall be determined under section 129(3) of CGST Act without giving the person concerned an opportunity of being heard – Section 129(4) of CGST Act.
Consequences of payment of Amount
On payment of amount referred in section 129(1), all proceedings in respect of the notice specified in section 129(3) shall be deemed to be concluded –Section 129(5) of CGST Act.
Recovery by confiscating goods if person does not pay – Where the person transporting any goods or the owner of the goods fails to pay the amount of tax and penalty as provided in section 129(1) within seven days of such detention or seizure, further proceedings shall be initiated in accordance with the provisions of section 130 of CGST Act 2017 (Confiscation of goods or conveyance) [Section 129(6) of CGST Act.]
Where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of seven days may be reduced by the proper officer – proviso to section 129(6) of CGST Act.
‘Proper Officer’ to reduce the period of seven days under proviso to section 129(6) of CGST Act, for the purpose of CGST is Additional Commissioner/Joint Commissioner of Central Tax, vide CBE&C circular No. 3/3/2017-GST, dated 5-7-2017 [State Government will prescribe ‘proper officer’ for purpose of SGST in the respective State].
Section 130 of CGST Act makes provisions for confiscation of goods.
Confiscation of goods or conveyance and levy of penalty
Notwithstanding anything contained in this Act, if any person –
(i) supplies or receives any goods in contravention of any of the provisions of this Act or rules made thereunder with intent to evade payment of tax or
(ii) does not account for any goods on which he is liable to pay tax under this Act, or
(iii) supplies any goods liable to tax under this Act without having applied for the registration, or
(iv) contravenes any of the provisions of this Act or rules made thereunder with intent to evade payment of tax or
(v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance, –
then, all such goods and/or conveyance shall be liable to confiscation and the person shall be liable to penalty under section 122 of CGST act 2017 [ Section 130(1) of CGST Act. ]
Comment of CA Satbir Singh : Thus if the eway bill is not made as per GST Rules then Penalty is not only imposed on the Supplier but it can also be imposed on the Transporter and Receiver of Goods.
Confiscation after notice and adjudication order
No order of confiscation of goods or conveyance or imposition of penalty shall be issued without giving the person a reasonable opportunity of being heard – Section 130(4) of CGST Act.
Goods or conveyance belong to Government after confiscation
Where any goods or conveyance are confiscated under this Act, the title of such goods or conveyance shall thereupon vest in the Government – Section 130(5) of CGST Act.
The proper officer adjudging confiscation shall take and hold possession of the things confiscated and every officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such possession – Section 130(6) of CGST Act.
Disposal of confiscated goods and conveyance
The proper officer may, after satisfying himself that the confiscated goods or conveyance are not required in any other proceedings under this Act and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose of such goods or conveyance and deposit the sale proceeds thereof with the Government – Section 130(7) of CGST Act.
Deputy/Assistant Commissioner of Central Tax has been designated as ‘proper officer’ for the purpose of section 130(6) and 130(7) of CGST Act for adjudicating confiscation and disposal of confiscated goods – CBE&C circular No. 3/3/2017-GST, dated 5-7-2017 [State Government will prescribe ‘proper officer’ for purpose of SGST in the respective State].
Redemption fine in lieu of confiscation
Whenever confiscation of any goods is authorized by this Act, the officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation such fine as the said officer thinks fit. Such fine shall not exceed the market price of the goods confiscated, less the tax chargeable thereon – Section 130(2) of CGST Act.
Aggregate of such fine and penalty leviable shall not be less than the amount of penalty leviable under section 129(1) of CGST Act.
Confiscation of conveyances
Any conveyance used as a means of transport for carriage of taxable goods in contravention of the provisions of this Act or Rules made thereunder is liable for confiscation and penalty on person under section 122 of CGST Act 2017, unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance – Section 130(1)(v) of CGST Act.
Where any such conveyance is used for the carriage of the goods or passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine equal to the tax payable on the goods being transported thereon – Third proviso to section 130(2) of CGST Act.
However, if the owner proves his innocence, conveyance cannot be confiscated.
Confiscation does not prevent imposition of other punishment
Without prejudice to the provisions contained in the Code of Criminal Procedure, 1973, no confiscation made or penalty imposed under the provisions of this Act or the rules made thereunder shall prevent the infliction of any other punishment to which the person affected thereby is liable under the provisions of this Act or under any other law for the time being in force – Section 131 of CGST Act.
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