GST-Kt’Qs: GST e-Way Bill – e-Way Bill Expired - Whether taxpayer bemused or amused? If the e-way bill is expired, in such case whether taxpayer has to surrender his tittle of the goods with “No GO” if he is otherwise unwillingness to penalty? Whether challenges of expiry of e-way Bill is technical or procedural? Issues with e-way Bill on its extension?

[AdvocateNarendraKumar ThotamsettyFCA]

Query: M/s A & Co is a registered taxable person in the State of Telangana procured materials from a PSU Ltd located in the State of Haryana in which the PSU not only issued a GST e-invoice, but also issued GST e-way Bill as per the provisions of the GST Act.

During the transit in the State of the Telangana the validity of the e-way bill got expired in the previous mid night @12:00 A.M but either the recipient or GTA or driver unable to extend the e-way bill in the wee hours on or before 8:00 AM in the early morning due to persisting challenges and stopped the vehicle immediately upon notice of the fact of the factual situation, but the GST Officer interrupted the vehicle and alleges it’s  suppression and wanted to levy the taxes on penalties due to non-availability of the validity of the e-way bill. In such case whether the allegation of such GST Tax Officer is tenable?

Answer:  The answer is the “Highly No” especially in the given case if the invoice is a e-invoice and accompanied with e-way Bill, and goods is on enroute its destination as per the invoice and  already pre-intimated to  the department through with its e-way bill with e-invoice and if the GST department aware of such facts before its moment of goods; then in such case the allegation of suppression and levy of taxes and penalties over and above invoice is not tenable and the same is liable to be set aside.

Further the author of the Kt’Qs submits his Queries in light with the Hon’ble Supreme Court Judgment in the case of ASSISTANT COMMISSIONER (ST) & ORS. VERSUS M/S. SATYAM SHIVAM PAPERS PVT. LIMITED & ANR. [2022 (1) TMI 954 - SC ORDER], in relation to expiry of the e-way bill and allegation on suppression as below:

• What are the objects of the e-way Bill and what are the benefits of the e-way bill?
• What are the objects of the e- invoice under GST? Is there any exemption of e-way bill is exits if the invoice is a e-invoice?
• What if, if the e-way bill is expired, whether the e-way bill can be extended? if yes, who can extend such e-way bill? If the e-way bill can be extended, is there any limitation of time is exits for the extension of e-way bill is the question?
• What if, if the e-way bill can’t be extended after notified time, whether a supplier can issue second set of e-way bill for the same invoice number with its same characters?
• During the transit, if the goods with its e-way bill and its e-invoice already verified by the tax officer in the previous occasion, can the other officer re-verify the e-way bill once again and allege for the suppression?
•  If the e-way bill expires, can the department allege as suppression even if the moment of goods is already aware by the department through its e-way bill and e-invoice is the question?

Q1: What is the object of the e-way Bill and what are the benefits of the e-way Bill?

The very object of the e-way bill is not new in the GST, but exits under the earlier VAT Regime, where many state governments introduced such concept of e-way bill in the VAT Regime for the purpose to track the moment of goods specially in relation to notified goods where it helps the assessing authority

• To distinguish legitimate sale and purchases during the moment of the goods

• To prevent the tax evasion
• To facilitate the faster moment of goods
• To promote tax compliance and ease of doing business for the legitimate sales and purchases.

And the such concept has been introduced in the GST due to owing benefits to the industry as below:

• Less Documentation: A whole lot of state-wise documentation would not be required for goods movement ever again. Another benefit available for transporters is the RGID device in the vehicle carrying consignments on a regular premise. The person responsible for the vehicle does not need to carry physical copies of the e-way bill as the same can now be mapped and verified through the RGIC device installed in the vehicle. It helped in doing away with the hassles of carrying and safe-keeping the physical papers.

• Cost Reduction: Electronic waybill reduces logistics cost by reinforcing proper invoicing and reducing tax avoidance. Also, subsequently, the proportion of logistics cost to GDP is expected to come down, which is currently pretty high when put against other countries.
• Fast and Efficient Transportation: The introduction of e-way bill has made the whole transportation system faster and much more efficient. It reduced the “n” number of check posts crosswise over state borders and national highways. It narrowed down the gap between 85000 annual average km travelled by Indian trucks and 1,50,000 to 2,50,000kms in developed countries.  
• Simple and quick generation of e-way bill: The generation of e-way bill happens through the government set online portal. The portal and e-way bill system are, however, very simple and user friendly. With the system, it possible for taxpayers to self-generate e-way bills and it is considered  as easy task these days and even a laymen can generate an e-way bill and facilitate the movement of goods.

• Seamless Credit: Upon receipt of the Goods, a taxpayer is fulfilling the condition of input in relation to Sec 16(2) (b) of the CGST Act 2017 and evidencing the receipt of the goods for the availment of input.

And; in GST before commencement of the goods that the e-way bill can be issued either by the supplier or the recipient or Goods transport agency; and upon updating the Part A & Part B of the e-way bill as the case may be, every e-way bill has a validity period  for 1 day for every 200 Kms or its part.

Q2: What is the object of the e- invoice under GST? Is there any exemption of e-way bill is exits if the invoice is a e-invoice?

The very object of the e-invoice under the GST Act is also akin to the objects of e-Way Bill, but it has greater objectives, where such e-invoice automates the multi-purpose reporting with a one-time input of invoice details; and plugs a major gap in data reconciliation under GST. Also it reduce the mismatch errors even for the GST Department during their assessments or verifications etc. However the e-invoice provisions are applicable to the only registered persons as notified by the Government on recommendation of the GST Council, where in such case such notified taxpayers has to submit such invoice details to the e-invoice portal and obtain such QR Code and IRN Code with unique 64 charters of hash letters. Hence, the e-invoice is applicable only notified taxpayer and not all.

Further as per the opinion of the author the e-way bill is a duplicate procedure to e-invoice, but due to non-availability of exemption for the e-way bill  for e-invoice as intimated by the Government in its introduction, the taxpayer obligated to generate e-way bill with no go through there is a e-invoice is exits.

Q3: What if, if the e-way bill is expired, whether the e-way bill can be extended? if yes, who can extend such e-way bill? If the e-way bill can be extended, is there any limitation of time is exits for the extension of e-way bill is the question?

If the e-way bill is expired and consignment not reached the destination, one can extend the validity of the e-way bill on exception circumstances, but it may be extended before 4 hours and 8 hours from the time of its expiry (i.e.; generally the way bill will expire end of the schedule day @ 12.00 AM irrespective of time of its generation of such e-way bill, and if is to be extended, then its to be extended in a particular schedule time of non-workings hours i.e.; after 8.00 PM but on before 8.00 in the morning); and also its to be extended only a person who has generated such e-way bill but no other person can extend such e-way bill irrespective of fact if the other person is a supplier or recipient or GTA or driver as the case may be.

Q4: What if, if the e-way bill can’t be extended after notified time, whether a supplier can issue second set of e-way bill for the same invoice number?

The answer is Highly No. If the e-way bill is expired and not extended within the specific time i.e.; Post 8:00 AM of the following day, no one can extend such e-way bill, since its be extended only issuer of such e-way bill and not by the other person, since the e-way bill website not only decay such extensions but also decay to issue another e-way bill for the same invoice with same GSTN ID’s.

Hence, the author of this Kt’Qs submits, if such issue of trade and industry is resolved, it’s not only benefited to the trade and industry, but also saves the time of the lower officers as well as the judiciary proceedings and ultimately leads ease of doing business by minimising cost of litigation.  

Q5: During the transit, if the goods with its e-way bill and its e-invoice already verified by the tax officer in the previous occasion, can the other officer re-verify the e-way bill once again and allege for the suppression?

During the introduction of the GST e-way bill, if the e-way bill is already verified by the tax officer, Government has provided an assurance to the suppliers or recipients for the hassle free moment of goods across PAN India basis without interruption provided if the goods are enroute its  destination and at the same time imposes a restriction that a tax payer can’t cancel e-waybill if the e-way bill already verified by the GST officer during its transit.

Hence in such case the author of the Kt’Qs is in the opinion if the conveyance with its e-way bill and invoice is already verified by the earlier officer and allowed its further moment of goods after satisfying the Genunity of the transactions, then then the allegation of a suppression at a later point  for mere lapse of e-way bill is not tenable and in such case the demand of tax and penalties over and above invoice values not tenable.

Q6:  If the e-way bill expires, can the department allege as suppression even if the moment of goods is already aware by the department through its e-way bill and e-invoice is the question?

Considering submissions as above read with the e-invoice & e-way bill and e-way bill limitation as enumerate as above, the allegation of suppression on mere lapse of e-way bill is not tenable and in this regard the author of the Kt’Qs relay the following pronouncement of Hon’ble Supreme Court, where the Hon’ble Supreme pronounced the judgment in case ASSISTANT COMMISSIONER (ST) & ORS. VERSUS M/S. SATYAM SHIVAM PAPERS PVT. LIMITED & ANR. [2022 (1) TMI 954 - SC ORDER], as below

Aggrieved by the unreasonable detention and penalty order of a GST officer, a taxpayer had approached the High Court highlighting the illegality in exercise of powers by the officer. Concurring with the taxpayer, the High Court passed a detailed order enlisting the extent of violations. It directed unconditional release of goods, refund of penalty and costs to be paid to the taxpayer.

Hassled by the High Court directions, the tax administration approached the Supreme Court but its submissions failed to cut ice. Noting the meticulous adjudication of the High Court which crystalised the violations by the officer, the Supreme Court not only rejected the petition of the tax administration but in fact increased the costs to be paid by it to the taxpayer and directed the tax administration to recover from the responsible officer.

Interestingly, declaring that the petition was 'misconceived' and was an instance of 'unnecessary litigation', the Supreme Court has even permitted the tax administration to recover the costs from the responsible officer.

It has precisely been found that there was no intent on the part of the writ petitioner to evade tax and rather, the goods in question could not be taken to the destination within time for the reasons beyond the control of the writ petitioner. When the undeniable facts, including the traffic blockage due to agitation, are taken into consideration, the State alone remains responsible for not providing smooth passage of traffic.

Note: That this Kt’Qs provided by the author only on the advisory and educational basis applicable on 28.01.2021 and user of the Kt’Qs advised to proceed accordingly with further detailed analysis