With a smooth run of electronic way bill system for inter-state movement of goods and services tax regime for sales since April 1, the bills hurls movement of goods back into chaos. The government of India was expecting at least 7 lacs of E-way bills to be generated on day 1 of the launch of E-way bills, but on contrary, less than 2 lacs E-way bills were generated.
How is the E-way bill regulated?
The government has laid the process to verify the E-way bill to be carried by a person in charge of the conveyance carrying any consignment of goods of value exceeding 50,000 rupees. In absence of the present document, a physical verification of the goods can be done, and it might lead to tax evasion.
If you are one of those who needs to generate the E-way bill but decided otherwise, you must know what consequences you are attracting. To avoid the consequences, you should start using a E-way bill application, which is tailor-made for your organization’s needs.
What if you still don’t generate an E-way bill?
The ominous consequences can be in non-monetary or monetary terms:
- You will be stuck at a toll- gate and the delivery of the goods will be compromised.
- A penalty of INR 10,000 or the tax calculated to be evaded, (whichever is greater).
To understand this better, let’s take an example. Rajnish moved goods from Chennai to Mumbai worth Rs. 1,00,000 but did not generate an E-way bill. Unfortunately, the vehicle was inspected at one of the check posts. In this situation, Rajnish must pay a penalty of INR 18,000.
How did we calculate this?
Higher of INR 10,000 (fixed penalty) or INR 18,000 (1,00,000 * 18%) is Rs. 18, 000
- In some extreme cases it might lead to detention and seizure of the goods as well. But, you can escape by payment of calculated tax and penalty both. The penalty could be based on the below specifications:
- Either 100% of the tax payable, where he is willing to pay penalty or
- Equal to 50% of the value of goods, where he is unwilling to pay penalty
For more clear understanding, let’s take another example. Mohan is carrying goods from West Bengal to Orissa worth Rs. 1,00,000, unfortunately his consignment is caught, and he doesn’t have E-way bill. So, now, to escape, he is liable to pay penalty in addition to tax calculated.
The calculated penalty is:
- INR 18,000 (100% of the tax payable), or
- INR 50,000 (Equal to 50% of the value of goods)
So basically, he must pay a total of INR 18,000 (tax) plus INR 18,000 (penalty) i.e. INR 36,000
In simple terms, avoidance of E-way bill generation means added cash outflow, detainment of goods and vehicle and the most important, delayed or even no delivery of goods.
Here’s an easy and reliable solution to all the complex legal problems, where business owners can manage the generation of online E-way bills for different sets of customers, automating multiple processes across multiple locations – Payswiff’s GST E-way bill solution.