As we are aware eway bill has been made mandatory to be accompanied with the conveyance for movement w.e.f. 01-04-2018, for any goods from one location to another in normal circumstances, except a small list and situations which are exempted from such compliance.

Rule 138 speaks about the procedural aspects of the e-way bill.

There are a lot of teething troubles for this procedure to settle down. Some minor mistakes listed below can turn out to a concern.

  1. Not updating the part ‘B’ invalidating the eway bill.
  2. Erroneous cancellation of eway bill by the recipient while the material is already in transit.
  3. Carrying goods without E-Way bill.

Large volumes of transactions, unaware transporters, manual tracking, etc, are prime reasons why the lapse occurs. Most of the cases we are coming across has no intention to avoid any tax.

A lot of vehicles & documents are being verified vide sub rule138B and a few are being detained u/s 129 of CGST Act 2017. This is resulting into delays in fulfilling the commitments and impacting the direct business.

With vast experience of clients business suffering due to these small mistakes, here is stuff worth knowing, to handle such situation.

What is the process of detention of the vehicle and charging the penalty?

  • In case person fails to produce any document or where the officer intends to undertake inspection, he shall record statement of the person in-charge of conveyance in FORM GST MOV-01.
  • If officer want to do physical verification/inspection of conveyance, goods so he should issue order for same via FORM GST MOV-02 & after that he will issue report of inspection vide FORM GST MOV-04.
  • Where no discrepancies have been found the officer shall issue a release order in FORM GST MOV-05 and allow conveyance to move further.
  • In case detained under section 129 of CGST Act, officer shall issue detention order in FORM GST MOV-06 and notice in FORM GST MOV-07 specifying the tax and penalty payable.
  • After payment of taxes and penalty, the officer shall release the goods by order FORM GST MOV-05.Further order in FORM GST MOV-09 shall be uploaded on common portal and demand accrued shall be added in the electronic cash/credit ledger.
  • Where the owner of the goods comes forward to get the goods and conveyance released by furnishing a security ,the goods shall be released by an order in GST MOV-05 after obtaining a bond in FORM GST MOV-08 along with a security in the form of bank guarantee.
  • In case the proposed tax and penalty has not been paid within seven days from the date of issue of order of detention in FORM GST MOV-06 action shall be initiated by serving a notice in FORM GST MOV-10 proposing confiscation of goods and imposition of penalty.
  • An order of confiscation of goods shall be passed in FORM GST MOV-11 after taking into considerations the objections filed by person in charge of the goods.
  • Where the physical verification of goods being transported on any conveyance has been done during transit at one place within a State or Union territory or in any other State or Union territory, no further physical verification of the said conveyance shall be carried out again in the State or Union territory.
  • No order for confiscation of goods or conveyance, or for imposition of penalty, shall be issued without giving the person an opportunity of being heard.

Tips for not getting into the trap of the moving squad:

  1. Get your Logistics team trained with a good team of professionals. Identify a senior team member or a consultant to handle the day to day queries.
  2. Make sure that part B is updated by your own Logistics team. If the Transporter is contracted to do it, make sure he does it, sends it over the email and then starts off with the same.
  3. Keep track of changes in eway bill if there is a chance of transshipment. i.e., change of vehicle on the way so in that case before such transfer update the details of conveyance in the eway bills in Part B of FORM GST EWB-01
  4. Share the eway bill vide email to the counter party.
  5. Make sure that the eway bill is valid while the vehicle is on the move.
  6. In case of imported goods person incharge of a conveyance shall also carry a copy of the bill of entry filed by the importer of such goods and shall indicate the number and date of the bill of entry in Part A of FORM GST EWB-01.

Things to take care of from transporter’s perspective:

  1. Person in charge of conveyance shall carry a) the invoice or bill of supply or delivery challan, as the case may be b) a copy of the e-way bill in physical form or the e-way bill number in electronic form. Provided copy of eway bill not require in case of movement of goods by rail or by air or vessel
  2. Where a vehicle has been intercepted and detained for a period exceeding thirty minutes, the transporter may upload the said information in FORM GST EWB-04 on the common portal.
  3. Instead of carrying all the eway bills for multiple consignments, the transporter can generate consolidated e-way bill in FORM GST EWB-02.
  4. If the aggregate of the consignment value of goods carried in the conveyance is more than fifty thousand rupees, the transporter shall, in respect of inter-State supply, generate the e-way bill in FORM GST EWB-01.

Tip: Once you have got into the trap of a squad with your procedural lapse:

  • Politely confirm the identity of the officer. He should be either commissioner or officer empowered by him or proper officer authorized by them, as per the rule with powers to inspect the vehicles.
  • Instruct the Transporter, Driver and logistic team to alarm the owners or the seniors immediately without hiding out on the matter. While providing the clarification and making available the data required, make sure that you talk that “there is no intention to evade tax”.
  • If the detention is made wide FORM GST Mov-06 arrange for submitting a formal reply drafted professionally. Make sure that you reserve the right to go in appeal on need basis.
  • Make the payment of taxes and penalties in correct cash ledger account and formally submit the challans.
  • The inspector will upload and debit the cash ledger for the tax and penalty recovery. We have seen many handling the situation positively & timely, and saving on the upfront tax and penalties, backed by a good professional support. If you are stuck now, approach an expert immediately.

Please feel free to write to us on mitesh@apmh / for ay further queries on the above blog.