Arjuna (Fictional Character): Krishna, When and How E-Way bill is applicable?
Krishna (Fictional Character): Arjuna, E-Way bill was made compulsory for interstate supplies from 01st April 2018, however for intra state supplies E-Way has been enabled in various states at respective dates. In Maharashtra E-Way bill was applicable from 25th May 2018, E-Way bill has to be given for inter as well as intra state supplies exceeding Rs. 50,000.
Arjuna: Krishna, what will happen if goods are transported without the cover of Invoice or E-Way bill?
Krishna: Arjuna, if transport of goods commences without invoice or E-Way bill then penalty would be charged. Penalty amounting to Tax payable or Rs 10,000 whichever is more would be payable in case of default. Example-If a cement dealer transports goods worth Rs 2 Lakhs taxable at rate of 28% i.e Rs 56,000 is tax amount, without the cover of invoice or E-Way bill, then the penalty will be higher of- Rs 10,000 or Tax payable on such goods here Rs 56,000. Hence penalty will be charged here Rs 56,000.
Arjuna: Krishna, what if goods are transported without cover of the invoice and E-Way bill and the goods are detained/seized by inspector/Tax officer?
- If the tax officer detains such goods, then for releasing such goods and conveyance the owner of the goods needs to pay penalty. When the owner of the goods comes forward to pay penalty and tax amount penalty will be equal to 100% of tax payable on such goods also the owner needs to pay tax on such goods at the same time. If in case of Exempted goods, the penalty will be 2 % of the value of goods or Rs 25,000 whichever is less.
- When the owner of the goods do not come forward to pay penalty and tax amount then the penalty will be equivalent to 50% of the value of goods as reduced by tax paid also the owner needs to pay tax on such goods at the same time. If in case of Exempted goods, the penalty will be 5% of the value of the goods or 25,000 whichever is less.
- The taxpayer can also require to give security for an amount equivalent to amount 1 or 2 above, in the way prescribed by the officer. For example,
If cement worth Rs 2,00,000 has been detained, taxpayer has to pay Tax (Rs 56,000) as well as penalty (Rs 56,000) Tax on goods transported i.e., Rs 56,000 as well as Penalty i.e., Rs 44,000 (50% of the value of goods (2,00,000*50%=1,00,000)-tax Paid (Rs.56,000/-)) The taxpayer also requires to give security worth the penalty amount.
Arjun: Krishna, what actions can be taken by the tax officer?
Krishna: Arjuna, appointed officer may check goods at check posts. He can also check various documents that are required to be carried along with E-Way bill. If the officer is notices that tax has been evaded then goods can be confiscated by the officer after giving an order for the same. Once the goods are checked at one check post then such goods would not be checked at any other post.
Arjuna: Krishna, what lesson the taxpayer should take from this?
Krishna: Arjuna, Taxpayers must ensure that the goods transported should be issued with E-Way bill if the consignment value exceeds Rs 50,000 and while transporting the goods taxpayer must know the value of the goods, total tax on such goods, and it must be transported with invoice copy and e-way bill. E-Way bill is just like 26AS, entries reflected in 26AS must be taken in books of account, in the same way, transactions in E-Way bill must be taken in the books. This might be cross-checked by the department. Hence taxpayers must need to check all the details and then only issue E-Way bill.