What are the penalties for e-way bill violations?

In India, e-way bill violations are penalized under the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act) and the Integrated Goods and Services Tax Act, 2017 (IGST Act). Here are the details:

1. Relevant Provisions and Penalties

Under the CGST Act, 2017:

• Section 68: Mandates that a person in charge of a conveyance carrying taxable goods should carry an invoice or bill of supply and an e-way bill. Non-compliance attracts penalties.
• Section 129: Governs penalties for e-way bill violations, such as failure to carry a valid e-way bill.
  • Penalty Details:
    • 100% of the tax amount (if tax is paid).
    • 50% of the value of goods (if tax is unpaid).
    • For exempted goods: ₹25,000 penalty.
  • Additionally, the vehicle and goods can be detained or seized until the penalty is paid.

Section 122:

Lists general offenses, including transporting goods without documents like an e-way bill. Penalty:

• ₹10,000 or the amount of tax evaded, whichever is higher.

Section 130:

Deals with confiscation of goods or conveyances in cases of deliberate fraud or intent to evade tax.

2. E-Way Bill Rules

The E-Way Bill Rules, 2018 prescribe:

• Mandatory generation of an e-way bill for inter/intra-state movement of goods worth ₹50,000 or more.
• E-way bills must be valid and match the goods being transported.

Violations include:

• Absence of an e-way bill.
• Expired e-way bill.
• Mismatch between the goods and the e-way bill.

3. Landmark Cases

1. Case: M/s Satyam Shivam Papers Pvt. Ltd. v. State of U.P. (2019)
   • Issue: Goods detained due to a minor clerical error in the e-way bill.
   • Judgment: The Allahabad High Court ruled that a minor clerical error (e.g., wrong vehicle number) does not warrant a penalty under Section 129 of the CGST Act. It emphasized that penalties should be proportionate and not unduly harsh.
2. Case: D.K. Enterprises v. State of Haryana (2021)
   • Issue: Vehicle and goods detained due to invalid e-way bill.
   • Judgment: The Punjab and Haryana High Court upheld detention and penalty, stating that compliance with e-way bill rules is mandatory to prevent tax evasion.
3. Case: Govind Tobacco Manufacturing Co. v. Union of India (2022)
   • Issue: Transported goods without an e-way bill.
   • Judgment: The Delhi High Court clarified that even for genuine errors, non-compliance with e-way bill provisions attracts penalties unless procedural lapses are rectified promptly.

4. Steps for Penalty Mitigation

• Voluntary Disclosure: If errors are detected, voluntary correction and tax payment can help mitigate penalties.
• Appeals: Taxpayers can appeal penalty orders before appellate authorities as per Section 107 of the CGST Act.

Summary of Penalties

Compliance with e-way bill rules ensures smooth transport and avoids legal consequences.