Understanding the E-Way Bill Under GST: Requirements, Importance, and Consequences

Contents Covered

• Who Needs to Prepare an E-Way Bill?
• Documents and Information Required for Preparing an E-Way Bill
• Importance of the E-Way Bill
• Penalty for Incorrect Details in E-Way Bill
• Consequences of Non-Preparation of E-Way Bill
• Conclusion

The E-way Bill (Electronic Way Bill) is a crucial compliance mechanism under the Goods and Services Tax  (GST) regime in India. It is aimed at ensuring a seamless flow of goods while maintaining a strict vigil against tax evasion. If you’re a supplier, transporter, or even a recipient involved in the movement of goods worth more than ₹50,000, understanding the E-way Bill is essential.

Who Needs to Prepare an E-Way Bill?

The responsibility to generate an E-way Bill lies with:

• Registered Suppliers – When goods worth more than ₹50,000 are being moved, whether for supply, return, or inward supply from an unregistered person.
• Transporters – If the supplier has not generated the bill, transporters carrying goods by road, rail, air, or vessel must generate it.
• Recipients – In cases where the goods are received from an unregistered supplier and transported by the recipient themselves.

Documents and Information Required for Preparing an E-Way Bill

To generate an E-way Bill, the following documents and details should be kept handy:

• Invoice or Bill of Supply or Delivery Challan (relevant to the movement of goods)
• Transporter ID or Vehicle Number
• Mode of transport – Road, Rail, Air, or Ship
• Value of consignment – including applicable taxes
• Place of dispatch and delivery
• Date of movement

For multi-modal transport or large consignments, additional transport documents may be required.

Importance of the E-Way Bill

• Prevents Tax Evasion: E-way Bill ensures goods being transported are properly invoiced and reported under GST.
• Efficient Goods Movement: Streamlines logistics and reduces time at check-posts through real-time verification.
• Accountability and Traceability: Helps businesses track shipments and build transparency in supply chains.
• Regulatory Compliance: Acts as a proof of movement, helping businesses stay on the right side of the law.

Penalty for Incorrect Details in E-Way Bill

Incorrect details in the E-way Bill, such as wrong HSN code, transporter ID, or invoice amount, can lead to:

• Monetary Penalty Under Section 129 of CGST Act:
  
  • If the owner of the goods comes forward, a penalty of 200% of the tax payable is imposed.
  • If the owner does not come forward, the penalty is 50% of the value of goods (reduced by the tax amount paid).
• Detention of Goods and Vehicle: Authorities may detain the vehicle and goods until the penalty is paid.
• However for Minor errors, the penalty may be imposed upto Rs. 10,000

Even small errors can attract heavy penalties, making due diligence and correct data entry absolutely essential.

Consequences of Non-Preparation of E-Way Bill

Failure to generate an E-way Bill when required can lead to:

• Seizure of Goods: The goods and the vehicle may be detained by GST authorities.
• Penalty as per Section 129:
  
  
  • 200% of tax payable if the owner accepts the goods.
  • 50% of the value of goods (minus tax) if the owner does not come forward.
• Delay and Disruption: Delivery delays, increased costs, and potential loss of clients.
• Reputational and Legal Risks: Non-compliance can trigger audits, notices, and further action from GST authorities.

Conclusion

“Any Question, feel free to connect with us“