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Non compliance of eway bill by supplier

mangesh chitnis (Accountant) (97 Points)

11 January 2021

One of our supplier had supplied material of around Rs. 3 Lakhs in last month but didn't generate Eway Bill. What will be the consequences on either part...

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CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 11 January 2021

The consequences of not generating & carrying the EWay bill can result in both monetary and non-monetary losses to the taxpayer.

Goods being moved in the contravention of Law are liable for:

Monetary Penalty
Moving goods without the cover of an invoice and Eway bill constitutes an offence and attracts a penalty of Rs.10,000 or the tax sought to be evaded (whichever is greater).

Hence, the bare minimum penalty that is levied for not complying the rules is Rs. 10,000.

Detention and Seizure
The vehicle that is found to be transporting the goods without an Eway bill can be detained or seized and would be released only on payment of appropriate tax and penalty as specified by the officer. Under this, there could be two situations:

If the owner wishes to pay the penalty, he must pay 100% of the tax payable.
If not, the penalty will be equal to 50% of the value of goods.

Apart from the legal consequences mentioned above, it is also important to note that the vehicle, as well as the goods of the taxpayer, can be detained. This would mean that the taxpayer’s supply chain would get affected due to the long delays at the check posts.