e-Way Bills are mandatory documents for Businesses in Transportation of Goods & Supplies. Non-Compliance with the e-Way Bill Rule can affect you in the form of Penalties, Seizure of Goods, Detention & even Confiscation.
Mistakes in e-Way Bill or failure to present an e-Way Bill when intercepted while in-transit can cause heavily to you & your Business. Both monetary losses & non-monetary losses can be caused as a result of carelessness in dealing with these documents.
15 Critical e-Way Bill Problems
The minimum Penalties for such mistakes (suspicious intent to evade tax) or failure in providing an e-Way Bill is Rs. 10,000. The penalty can also increase upon an investigation or depending upon the Tax official.
You may have to pay the total amount of Tax liability of the goods immediately, & in extreme cases, even half the value of the goods needs to be paid
The interception can also create scenes of unproductivity & utter embarrassment apart from the goods being Seized, Detained & confiscated.
We have drafted down the most common yet fatal e-Way Bill Problems Taxpayers face & their solutions-
Errors in e-Way Bill Generation- Data Entry Complications
- Entering wrong Taxable values- Minor mistakes in the taxable value shall not levy any penalties on the Taxpayer. Considered that the tax amount paid on such goods is correct & accurate. This shows that the mistake was genuine & was not intended to evade any taxes.
- Entering wrong HSN Codes- HSN Code error again can be major, given that the entire code is completely different. But if the first two digits of the HSN code are correct and even later only one or two digits are wrong (maybe as a result of a typo) then there shall be no penalty on the Taxpayer.
- Incorrect Invoice Number- In case the Invoice Number entered is incorrect then there shall be no penalty or seizure of goods, again given that the GST on the goods is paid accurately.
- Minor errors in any data entry of the e-Way Bill- For any such minor errors that are clearly unintended & are genuine, there shall be no strict action such as seizure or penalty. However, on suspicion, the Tax officer can start an investigation on the matter.
- Visible entry of wrong details with the intent of Tax evasion- This is where the problem begins, if there are any visible tampering of the entered data with the intent of Tax evasion, such as entering different HSN Codes to reduce the tax slab or entering a completely different taxable value or value of goods with the intent of dodging or reducing the Tax amount, then the Taxpayer shall be exposed to Seizures, Penalties & even Confiscation of the Goods.
Detention, Seizure & Confiscation – Heavy Losses for Businesses
For Not having an e-Way Bill- If your goods are caught in-transit & the transporter fails to present both the hard copy & the soft copy of an e-Way Bill, then there can be a risk of heavy Penalties, minimum- Rs. 10,000 as well as Seizure & Detention of the Goods.
Hence it is better to be well prepared & keep rich compliance with e-Way Bills.
- For suspicion of tax evasion intent- This situation is rather complicated. The authority cannot take any severe actions based on mere suspicion.
Without solid evidence, the authority cannot confiscate the goods.
An inquiry & short investigation (audit) can be initiated, it will be decided after this if there have been any violations or not.
If it is found that although the taxes have been paid correctly the transaction was bogus & being used for a say in a conspiracy to evade tax then there can be harsh consequences & strict actions can be taken.
The case could go beyond just violation of the GST Rule & various charges could be pressed against the Taxpayer depending on the severity of the situation, tax amount, prior or other involvement in such activities.
- Wrong classification of goods- The wrong classification of goods is again not considered as big an offense & thus levies no specified Penalties or Seizure of goods.
- For changing the route for delivering the goods- Due to various reasons, such as road under construction, the change in route also is not considered a violation of the CGST Rule & does not attract any Penalties or Seizure.
As it does not provide a solid ground to the fact that there was intent of Tax evasion.
- For moving goods from billing address to shipping address- You cannot move your goods to an address different from what is originally mentioned in the Invoice & the e-Way Bill. Although the offloading of goods can take a place to a slightly different location in special cases.
But to this, the Taxpayer shall have to pay an amount of Penalty as mentioned by the Tax official.
Penalization of Goods – Monetary Losses for Businesses
- Penalties levied on goods without e-Way Bills- For any goods intercepted & found without an e-Way Bill there will be a minimum penalty of Rs. 10,000 or the amount of tax sought to be evaded. In special cases, the penalty also rises to half the cost of the goods.
- Penalties & actions on incomplete details furnished in the e-Way Bill to evade taxes- In case there was an incomplete or improperly generated e-Way Bill but there was no sign of Tax evasion, the GST was paid correctly & the invoices were in order, then the maximum penalty can be of Rs. 25,000.
But if so is not the case & there was an attempt to tax evasion, then there can be high penalties, scrutiny, & even detention of Goods.
Expiration of e-Way Bills- Expiration of e-Way Bill is a potential problem if you don’t keep a keen eye on the details. Expiring e-Way Bills is a problem with no specific solution except precaution.
You must extend the validity of your e-Way Bill at least 4 hours prior to the actual date & time of expiry. Even if you have a doubt that it may take longer than the calculated time, you must extend the validity of your e-Way Bill.
2. Blocking of the e-way bill generation process- As per the new Rule given by CBIC, you will not be able to generate any further e-Way Bills if you have two or more than two pending GSTR-1 & GSTR-3B.
Your GSTIN will only be unblocked from the e-Way Bill Portal, when you reduce the number of pending GST Returns, to less than two, by filing the pending Returns.
This rule was implemented to enhance the GST compliance & has been effective so far. In order to continue the smooth flow of Businesses, you must comply with the GST regime & file your GST Returns regularly.
3. No single e-Way Bills for multiple invoices – Consolidation of e-Way Bills- Many people confuse this feature of e-Way Bill with Transshipment or other features of e-Way Bill.
But, consolidation of e-Way Bills actually means, clubbing of e-Way Bills of Goods that are going to the same destination carried in the same vehicle.
This helps the transporter, as they do not have to carry different e-Way Bills for multiple consignments.
These were the most basic & recurring problems Businesses face with e-Way Bills. One thing common in all these problems is Compliance & its importance.
Complying with the e-Way Bill system is highly critical and essential for Businesses to avoid penalties & wastage of time & energy.
Compliance- A potential solution for all e-Way Bill generation issues
With the help of APIs, the eway bill generation process can be made automated & precise.
GSTHero, a Government-authorized GST Suvidha Provider, has aced in the domain with its state of the art e-Way Bill Solutions.
The solution provides a site-to-site integration or plugin to merge the ERP with the e-Way Bill Portal so you can perform all the e-Way Bill operations within your ERP itself.
From generating to canceling to consolidating e-Way Bills all operations under one roof & automated. No human data entry means no errors.
Following are the key features of GSTHero e-Way Bill Solution-
- Generate, Consolidate, Edit, Cancel, & Print e-Way Bills in 1 click form the ERP.
- GSTHero Site-to-site Integration & plug-ins merge the ERPs to the e-Way Bill Portal, so all the e-Way Bill operations can be performed from within the ERP itself. No need for constant juggling between the ERP & the Portal.
- Bulk Generate e-Way Bills in fewer steps without using JSON File.
- Saves time & Manpower.
- Ruling out of manual entry errors since the process is automated & more accurate. Even the smallest detail shall be auto fetched from the Invoice data.
- GSTHero is ISO Certified, is safe & ensures maximum data security.
- GSTHero’s dedicated Support Team delivers prompt support to the users, & provides excellent after-sales support & training, guaranteeing a smooth user experience.
About the Author– GSTHero– Making Life Simple! GSTHero is the best GST filing, e-Way Bill Generation & E-Invoicing Software in India. GSTHero is a government authorized GST Suvidha Provider. Both Businesses and Tax Practitioners can file GSTR 1, GSTR 3B, GSTR 9 and GSTR 9C with all supporting reports. 1 Click Auto Reconciliation & report-matching feature helps you in claiming up to 100% ITC and finds your GST Defaulting Suppliers. GSTR2A vs GSTR-3B, GSTR-1 vs GSTR-3B, ‘GSTR-1, GSTR-2A & GSTR-3B’ annual report matching is also provided by GSTHero.
GSTHero ERP Plugins provide 1 Click e-Way Bill & E-Invoice, Generation, Operation & Printing from your own ERP like Tally, SAP, Marg, Busy, Microsoft Dynamics, Oracle & others itself with high data security.