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Posted on January 13, 2022
Changes Applicable in E-Way Bill since From 1st January 2022
This article has been put together to address a significant shift in the GST Regulatory Framework 0f E-Way Bill.The relevance of this article is high because of the nature of this change in the E-Way Bill, and considering how even a small a modification can have a large impact on every business sector.
The Norm as of Now
Before we go into detail about the anticipated change in the E-Way Bill, it’s vital to understand the current rules and the legal process that occurs anytime when a truck is stopped by an official or officer of the GST.
In such situation, the products and the truck are confiscated on the spot if an official notices a discrepancy with regard to the documents or the paperwork provided by the truck driver to such officer of the GST, such as the E-Way Bill or Tax Invoice, or if there is a mismatch with respect to the description of products or the quantity at the time of interception.
The officer can then make a demand for payment of the tax which is not paid as well as the penalty in order to release the items or the products in the custody. However, if someone other than the owner comes to collect the seized things, the situation is different. If it is the case, the penalty is equivalent to the value of the goods in possession of the GST Authority less the Amount of tax that is chargeable on such goods or the products in question.
The concerned company might potentially get a preliminary release of products by paying the required amount in bonds and securities also. The businesses or the owner’s explanation at the time of interception and even after or in the later period of interception also plays a significant role in determining such tax and payment.
In most of these cases we can see that, the owner of the business or in short, the businessman files an appeal after the goods have been released against the order, on payment of tax and penalty to have such tax and penalty paid by the Department released.
The standard reasoning which is made by the business owner is that the same transaction cannot be taxed twice. And this would basically aid them in receiving tax refund. however, the refund or returning of the amount of the penalty paid by the business owner, is contingent on the
- response to the show cause notice,
- along with other factors like how well and with what quality the appeal was drafted, and
- the explanation offered during the personal hearing to the GST Authority and its officials.
In the event where the liability is discharged by paying using bond and security, an appeal will be filed against a 10% pre-deposit for the stay of demand. The Department initiates the process of Confiscation in cases of non-payment or failure to provide security, and in some cases, the Department may also collect the necessary amount by auctioning the products or the goods in customer and also the truck(s)
Changes to Take Place from 1st of January 2022
Rather of paying the tax and penalty as is the case now, the accused will be required to pay a fine equal to twice the amount of the tax. The entire sum will be classified as a penalty, and nothing will be classified as a tax amount here.
This means that if you seek for a refund, you will either receive the entire amount or nothing at all, as opposed to receiving the tax amount in most cases stipulated before. Section 129 has been delinked from section 67 of the GST Laws, hence the provision for granting bonds for the release of goods will be deleted as well. If anybody other than the owner comes to recover the seized items and truck, the penalty will become equal to the value of the products or goods that is in the custody of the GST Authorities.
If the business owner or any other person for that matter fails to come forward and pay a fine for the items and the truck taken into custody by the GST Authorities or Officials, then the truck driver will be required to pay a tax on such commodities. And this amount shall come up to a maximum punishment of INR 1 lakh, in order to have his or her truck released.
The interception-verification-detention process must be completed within a regular time limit of 22 days to the maximum. The pre-deposit for a penalty stay has also been enhanced to 25% from the previous 10% before the Commissioner.
What Does this Hold for the Business Sector?
One thing we can take away from this article and its content as a business owner is that we need to treat the e-way bill seriously and verify that the company is following all of the laws, rules and regulations as it is applicable.
We should also be aware that the agency has just begun to require E-Way Bill matching. By exercising caution all GST rules and regulations, we can avoid a lot of stress and ending up paying large amount of penalty which would increase the legal costs expended by the entity.
The E-way bill has shown to be a useful tool for preventing tax evasion. It also aids in keeping track of the commodities or goods that are actually being transported and specified in the invoice and E-Way Bill by the company and its owners.
It would always be recommended to stay up and in adherence to all the rules, regulations and laws that are enforced by the Government such that, we are not only able to become better responsible citizens but also keep at bay the legal costs which would add up the total costs of the business.
It also holds the power to bring us under the radar of the GST Authority and all other allied authorities or departments of the Government. And on an eventual basis this will affect the credibility of our business as a brand.