Ewaybill data vs GSTR 1 - GST audit case

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48 Points Joined February 2011

Recently during the course of GST audit, cases have been pointed out wherein RTP has issued less ewaybills compare to invoices uploaded in GSTR1. Tax invoices which were of value more than the limit in which ewaybills should have been issued where not issued. There was no problem in movement of goods. But during GST audit, AO is going towards the direction of penalty for not issuing e-way bill and talking about reversing input credit against purchases in which ewaybill is not issued. 

Whats your take on this ? RTP is not evading any tax as liability is declared in GSTR 1. 

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On 06 December 2024 at 12:54 Report
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Master in Accounts & high court Advocate
9123 Points Joined December 2011

 Non-Issuance of E-Way Bills The GST audit findings indicate that the Registered Taxpayer (RTP) did not issue e-way bills for invoices with values exceeding the threshold limit.

Although there were no issues with the movement of goods, the AO is considering imposing penalties and reversing input credit.

Penalty for Non-Issuance of E-Way Bills As per Section 122(1) of the CGST Act, 2017, a penalty of ₹10,000 or an amount equivalent to the tax evaded, whichever is greater, can be imposed for non-issuance of e-way bills.

 However, in this case, since the RTP has declared the liability in GSTR-1 and is not evading tax, the penalty might not be applicable.

Reversal of Input Credit Regarding the reversal of input credit, Section 16(2) of the CGST Act, 2017, states that input credit can be availed only if the supplier has complied with the provisions of the Act, including the issuance of e-way bills.

However, in this case, since the RTP has declared the liability in GSTR-1 and has paid the tax, the reversal of input credit might not be justified. RTP's Possible Course of Action 1. _Reply to the GST audit findings_: The RTP should respond to the audit findings, explaining the circumstances and providing evidence that the liability was declared in GSTR-1 and tax was paid. 2. _Seek clarification on penalty and input credit reversal_: The RTP should seek clarification from the AO on the penalty and input credit reversal, citing the relevant provisions of the CGST Act, 2017. 3. _Consult a tax professional_: It is recommended that the RTP consults a tax professional or chartered accountant to ensure they are in compliance with GST regulations and to represent them in the GST audit proceedings.

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On 06 December 2024 at 13:27


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