E-way Bill Law – Should a Business Pay the Price for a Public Holiday

The e-way billing system has become essential to India’s goods transportation process, ensuring seamless movement of goods from one place to another.

E-way bills are mandatory to transport goods over and above Rs 50,000 from one state to another or within the state. It contains essential details such as the type of goods, value, place of origin, and destination. The GST e-way bill serves as evidence of GST (Goods and Services Tax) payment and compliance during the movement of goods.

There are rules involved for taxpayers while generating e-way bills and for its n validity. If these rules are not pursued, one must pay penalties and fines, and the e-way bill loses its validity.

Let us understand the impact and validation of e-way billing when a certain e-way bill crosses its validity date due to a public holiday. What are the consequences of this situation on the consigner, consignee, and transporter involved?

E-Way Billing Law and Rules in India

1. There are specific checklists that parties involved in the transport of goods must follow:The threshold of the amount pertaining to goods being transported determines whether a GST e-way bill must be generated or not. If the goods are worth less than Rs 50,000, then there is no requirement for an e-way bill to be developed. But if there is inter-state transportation of goods involved, then an e-way bill is mandatory irrespective of the amount of the goods.

2. If the transport’s total distance is 100 km or part thereof, the e-way bill is valid for 1 day from the time goods are dispatched from the consignor’s warehouse or address. This validity increases by 1 day for an extra 100 km distance covered subjective to an extension of a maximum up to 200 KM.

3. Part B of the e-way bill must be filled before the actual movement of goods. It contains vehicle details and other transportation-related information.

4. An e-way bill can be cancelled within 24 hours of its generation or before the physical verification of goods commences, whichever is earlier. An e-way bill can also be extended if the goods cannot be transported within the validity period due to unforeseen circumstances. Only the active transporter can extend the validity of the e-way bill.

Noncompliance penalties can amount to INR 10,000 or the tax amount involved, whichever is higher.

When Should One Issue E-way Billing System?

As per Rule 138 of the CGST (Central GST) Rules, 2017, the e-way bill system is provided, and in this context, it is essential to note that “information shall be provided prior to the commencement of goods movement” and “is to be issued regardless of whether the movement is related to a supply or not.”.

GST registered members: Need to generate an e-Way bill in the following situations:

• While making a supply
• In the event of a return
• An inward supply from an unregistered source.

When is a Taxpayer Liable to Pay a Penalty on E-Way Bill?

Under the e-way billing system, taxpayers must ensure proper compliance to avoid penalties. The following instances can lead to penalties:

• Failure to generate an e-way bill for the movement of goods exceeding INR 50,000.
• Using an invalid or expired e-way bill during transportation.
• Failing to furnish accurate details in the e-way bill.
• Not carrying a physical copy or an electronically generated e-way bill during transit.

Unforeseen Circumstances During the Shipment

Many unanticipated situations might occur while the consignor is transporting the goods. For example, the shipment vehicle may break down, there may be a slight delay in the shipment process, and the pin code entered in the GST e-way bill may be incorrect.

The good part is that these situations have set solutions and can be avoided immediately. But what about the hurdles that can come the taxpayer’s way while the shipment of the goods is in process, and how to overcome those?

A similar scenario occurred when Perfect Enterprise (consignor) found itself in a predicament when a national holiday (Ed-Ul-Fitr) kept them from revalidating their e-way bill. Their goods were intercepted, and a hefty penalty was imposed on them.

Now the question that arose was whether they should bear the consequences of a public holiday while their shipment and e-way billing requirements were entirely in check. The shipment of their products was supposed to arrive at the consignee location on 2nd May 2022, and it did. But the stockyard was closed due to the public holiday, and the product could not unload.

This led to a hefty fine imposed on the company, and to averse the effect, they took the case to Kolkata (Calcutta) High Court. After a lengthy battle, a landmark judgment was passed where Honourable Judge Justice Krishna Rao concluded there was no wilful attempt to evade tax on Perfect Enterprise’s part.

The court set aside the orders of the authorities. This has come as a ray of hope for the taxpayers who diligently pay all their taxes on time and follow the rulebook.

Conclusion

While this judgment has relieved the taxpayers and registered individuals under GST, ample cases are still pending dealing with similar situations. To mitigate the effects of probable fines and penalties under e-way billing compliance and overcome the hurdles involved, businesses must take preventive measures.

This can happen through strategic planning, collaboration, and leveraging technology solutions like E-Way Bill Generation Software. By prioritizing compliance culture, businesses can optimize their supply chain operations, ensuring smooth goods transportation even during public holidays.

E-Way Bill Generation Software like GSTrobo is just the right solution that prompts the taxpayers in advance and allows them to manage their compliance and e-way billing system from a single, smart dashboard. It lets the parties involved, the consigner, consignee, and transporter; all can have access to the dashboard, which makes the operations transparent and streamlined within seconds, saving time and effort to focus on other unforeseen circumstances ahead.