Importance of filling Part B of Eway Bill

Goods and Service Tax

May 13, 2019

In the recent order passed by the High court of Madhya Pradesh in their order dated 05-07-2018, demand and penalties imposed Rs. 1,32,13,683 on M/s Gati Kintetsu Express Pvt Ltd by GST Appellate Authority & Joint commissioner of State Tax, Indore and Assistant Commissioner of State Tax, Indore has been confirmed due to negligence of Part B of Eway Bill portal.

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Facts of cases related to Part B of Eway Bill portal:

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The vehicle of M/s Gati Kintetsu Express Pvt Ltd was carrying goods from Pune(Wadki), Maharashtra to Noida via Indore and other different places.
The inspection was carried out of their vehicle on 27.04.2018.
On inquiry, the driver (person in charge of a conveyance) of the vehicle produced the bill and challan.
E-way bill on inquiry, it was found that the petitioner Transporter company who was transporting the goods has not uploaded/updated the part-B of the e-way bill which is a required. Such an act violated the provision of Sec 68 of CGST Act 2017 and Rule 138 of CGST Act 2017.
Consequently, the proceeding was initiated under Section 129 of the Act, and a penalty was imposed under Section 122 of the Act since he was transporting the taxable goods without the cover of documents.

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Ground by M/s Gati Kintetsu Express Pvt Ltd

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M/s Gati Kintetsu Express Pvt Ltd took the ground that there was no intention on the part of the petitioner to evade payment of tax during Inter and Intra State Supply of Goods or services and due to technical error, part B of the Eway bill cannot be updated.
This ground got rejected with the view that the portal of the GST provides for an option of grievance in case the petitioner was having any problem in updating the Part-B of the e-way bill. No such grievance has been raised by the petitioner and no written grievance has been raised with regard to the updating the technical error could not have been considered.
In case Part-B is not updated, the e-way bill is not genuine/legal, and therefore, not filing out Part B of Eway Bill portal, not a minor mistake or cannot be treated as a technical error when there is an option of raising a grievance on the GST portal itself.

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As per the provision of Rule 138 read with section 68 of CGST, every registered person carrying goods value more than Rs. 50000 needs to furnish detail of goods in Part A of e-way bill and needs to provide detail of conveyance in Part B of Eway Bill portal on the common portal before the commencement of movements of goods.

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In case of failure to furnish Part B of Eway Bill portal details, penalties proceeding under sections 122, 129, and 130 of the CGST Act will be carried out.

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Section	Penalties for not carrying E-Way Bill
Sec 122(xiv)	Penalty for a certain offense: A taxable person, registered person, or any person who transports taxable goods without valid documents (i.e., E-Way Bill), shall be liable to a penalty of ₹10,000 or the tax sought to be evaded, whichever is higher.
Sec 129	Detention, seizure, and release of goods and conveyance in transit When goods are transported or stored in contravention of GST rules, they may be detained/seized. Release is subject to the following conditions: If the owner comes forward to pay: Taxable goods: 100% of tax + penalty Exempt goods: 2% of value or ₹25,000 (whichever is less) OR furnish security equivalent to above If the owner does NOT come forward: Taxable goods: 50% of value reduced by tax paid Exempt goods: 5% of value or ₹25,000 (whichever is less) OR furnish security equivalent to above Additional safeguards: Order of detention/seizure must be served Opportunity of being heard is mandatory Provisional release possible upon execution of bond/security (Section 67(6)) Payment of tax & penalty concludes proceedings Non-payment leads to action under Section 130
Sec 130	Confiscation of goods and conveyance and levy of penalties If tax and penalties are not paid within 7 days of detention/seizure: Goods and conveyance may be confiscated Penalty up to market value of goods (excluding tax) Penalty must be at least as much as in Sec 129(1) Opportunity of being heard must be given before confiscation Reference: Interception of Conveyances

Section

Penalties for not carrying E-Way Bill

Sec 122(xiv)

Penalty for a certain offense:
A taxable person, registered person, or any person who transports taxable goods without valid documents (i.e., E-Way Bill), shall be liable to a penalty of ₹10,000 or the tax sought to be evaded, whichever is higher.

Sec 129

Detention, seizure, and release of goods and conveyance in transit
When goods are transported or stored in contravention of GST rules, they may be detained/seized. Release is subject to the following conditions:

If the owner comes forward to pay: