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E-way bill is not a new phenomenon. It was prevalent in most States under the erstwhile VAT regime in the name of road permit, waybill, etc. It was used to monitor the movement of goods to/from a State in order to check tax evasion. A way bill is typically required to accompany goods on their movement from the consignor to consignee. Under GST regime, where the goods are moved for any reason relating to supply or other than supply or due to inward supply from unregistered person and if the value of goods is more than Rs.50,000 then rule 138A of CGST Rules, 2017 (hereinafter referred to as 'Rules') requires that such movement shall be accompanied by e-way bill (hereinafter referred to as 'EWB') in physical or EWB number in electronic form. Further, the person in charge of the vehicle is also required to carry invoice/bill of supply/ delivery challan.

This is what the law requires us to do. Let us check what the consequences are in case the above provisions are contravened i.e. if the EWB is not generated or if EWB is not carried while goods are moved.

1. One of the consequence is provided in section 129 of the Central Goods and Services Tax Act, 2017(hereinafter referred to as Act).

As per section 129(1) of the Act, any person transports any goods or stores any goods while they are in transit in contravention of provisions made thereunder then

  • Such goods and
  • Conveyance used as a means of transport for carrying the said goods and
  • Documents relating to such goods and conveyance

Shall be liable to detention or seizure.

As seen above, the goods or conveyance would be liable to detention or seizure. Let us first understand what these terms mean:


Where the owner of the goods is not allowed to access his goods vide issuance of a legal order/notice is called Detention. However, the ownership of goods still lies with the owner. It is issued when it is suspected that the goods are liable to confiscation. Further, detention is only by verbal instructions and goods can be released without any formality, if the documents etc. are found to be in order.


The seizure is taking over of actual possession of the goods by the department. A seizure can be made only after inquiry/investigation of the fact that the goods are actually liable to confiscation.


This is the ultimate act after proper adjudication. Once confiscation takes place, the ownership, as well as the possession, goes out of the hands of the original owner and into the hands of the Government Authority.

Further, such goods and conveyance shall be released if the


The proper officer detaining or seizing the goods and/or conveyance shall issue an order for detention or seizure and a notice specifying the tax and penalty and thereafter pass an order for payment of tax and penalty under clause (a) or clause (b) or clause (c) under section 129(3) of the Act.

No tax or interest or penalty shall be levied in terms of section 129(3) of the Act without giving an opportunity of being heard to the transporter.

On payment of such tax and penalty, all proceedings in respect of the notice as specified in section 129(3) of the Act shall be deemed to be concluded.

Where the transporter or owner of the goods fail to pay such tax and penalty within 14 days of such detention, search or seizure, further proceedings shall be initiated in terms of section 130 of the Act.

Where the goods are perishable or hazardous in nature or likely to depreciate in value with the passage of time, the period of 14 days to pay tax and penalty may be reduced by the proper officer. 

No detention in the following cases as per circular No.64/38/2018 - GST dated 14.09.2018

  • Non-furnishing of information in Part B in the case where
  • The goods are moved within the State from place of business of transporter to place of business of consignor or consignee and
  • Distance between such places is up to 50 Kms
  • Spelling mistakes in the name of the consignor or the consignee but GSTIN is correct;
  • Error in the pin-code but the address is correct, subject to the condition that the error should result in increasing the validity period;
  • Error in the address of the consignee to the extent that the locality and other details of the consignee are correct
  • Error in one or two digits of the document number;
  • Error in 4 or 6 digit level of HSN (2 digits & rate of tax is correct);
  • Error in one or two digits/characters of the vehicle number.   
  • The penalty of Rs.500/- each under CGST/SGST can be levied in the above circumstances

Writ petitions filed in case of detention or seizure of goods:

1. Wrong declaration of date in E-way Bill due to inadvertence

Held: Goods and vehicle to be released subject to deposit of security other than cash or bank guarantee equal to the tax.

2. Goods transported without transit declaration form

Held:  Goods and vehicle to be released subject to providing of indemnity bond

3. Mistake of interchanging last two digits of vehicle number in E-way Bill due to human error

Held: Goods and vehicle directed to be released forthwith

Non-availment of ITC

If any taxes are paid in accordance with the provisions of section 129 of the Act, the recipient of such goods shall not be eligible to claim ITC on such goods, as it is specifically restricted under section 17(5) of the Act. Further as per rule 53(3) of the Rules; the invoice issued by the supplier shall contain the words 'Input tax credit not admissible'.

2. Further, another consequence would be a levy of general penalty which may extend to twenty-five thousand rupees in terms of section 125 of the Act for contravening the provisions of rule 138 of the Rules.

Thus, from the above discussion, it can be said that the issuance of the E-way bill is mandatory if the consignment value of goods exceeds Rs.50,000.


Published by

Monika Motta
Category GST   Report

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