What happens if an e-way bill is not generated?

In India, the E-way bill is an electronic document required for the movement of goods, as specified under the Goods and Services Tax (GST) regime. It is generated on the GST portal when goods are transported, and it contains key details about the consignment, such as the consignor, consignee, details of the goods, and taxes paid.

If an e-way bill is not generated when it is required, it can result in serious consequences under the GST framework. Here’s a detailed explanation:

Consequences of Not Generating an E-Way Bill

1. Penalty for Non-Compliance:
   • Section 122 of the CGST Act provides for penalties against taxpayers or transporters who do not comply with the provisions of the e-way bill. The penalty can be:
     • ₹10,000 or the amount of tax evaded, whichever is higher.
2. Detention and Seizure of Goods:
   • According to Section 129 of the CGST Act, goods can be detained or seized if they are transported without a valid e-way bill or invoice.
   • The transporter will have to pay a penalty equal to 100% of the tax payable on the goods if they are found without an e-way bill, in addition to the applicable tax.
3. Obstruction in the Movement of Goods:
   • In the absence of a valid e-way bill, the authorities may block the movement of goods, leading to delays in the delivery and possible legal complications for the business.

Provisions and Acts under the Indian Constitution

The Constitution of India does not specifically mention e-way bills but provides the legal framework for indirect taxation, within which GST and e-way bills are regulated. The relevant provisions are:

1. Article 246: This article divides the legislative powers between the Union and the States and includes provisions for taxation under the GST framework.
2. Article 265: This article prohibits the imposition of taxes without the authority of law, establishing the basis for GST and e-way bill rules.

The e-way bill is regulated through the following laws:

1. Central Goods and Services Tax (CGST) Act, 2017: Section 68 of the CGST Act specifically empowers the government to prescribe the requirements for generating e-way bills.
2. State Goods and Services Tax (SGST) Act, 2017: Each state has its own SGST act, which also governs the implementation of e-way bills for intra-state movements of goods.
3. GST E-way Bill Rules, 2018: These rules govern the procedure for generating e-way bills, the information required, and the penalties for non-compliance.

Landmark Cases Related to E-Way Bills

Several landmark cases have shaped the interpretation of e-way bill provisions under GST:

1. M/s. Bansal Parivahan Pvt Ltd v. Union of India (2018):
   • This case dealt with the issue of detention of goods due to lack of a proper e-way bill. The Delhi High Court ruled that if goods are being transported without an e-way bill, the authorities are within their rights to seize and detain the goods.
2. M/s. Saurabh Kumar v. Union of India (2020):
   • The Allahabad High Court ruled that detention of goods in transit due to an incomplete or improper e-way bill is lawful. The case emphasized that the non-generation of an e-way bill could lead to serious penalties and legal actions under the GST laws.
3. Union of India v. M/s. Bhagwati Traders (2019):
   • In this case, the Gujarat High Court upheld the penalties and detention of goods for not generating a proper e-way bill. The court noted that the intent of the law was to prevent tax evasion, and non-compliance with e-way bill requirements could not be condoned.

When is an E-Way Bill Required?

An e-way bill is mandatory when the following conditions are met:

• The consignment value exceeds ₹50,000.
• The movement is of goods either in transit (from the supplier to the recipient) or for sale, or it involves imports/exports.
• Goods are being transported by road, air, rail, or vessel.

Conclusion

If an e-way bill is not generated when required, it can lead to penalties, seizure of goods, and legal complications. The government has provided a robust mechanism under the GST Act to ensure that the e-way bill is generated for the smooth and compliant movement of goods across India. Non-compliance with these provisions can result in serious financial and legal consequences.