E waybill - Beware

E waybill - Beware

Consequences of Incorrect E-Way Bill

While the paramount reason to generate e-way bills correctly for a business entity is to avoid paying e-way bill penalties, there are many other reasons why having a streamlined e-way bill system in place becomes essential. Here are the significant consequences of incorrect e-way bill generation:

1. Confiscation of Goods and Vehicle

An e-way bill is a mandatory document that a transporter must carry while the movement of goods happens across the country, whether interstate or intrastate. The enforcement authorised officers can stop any vehicle for e-way bill document verification at any check post. And, if they get any tax evasion information, they can even carry on the vehicle’s physical verification.

In case the transporter is found sans e-way bill during travel, the inspection officer has the right to confiscate or detain the goods along with the vehicle.

2. Unnecessary Delays

There is a legal validity period for an e-way bill after the vehicle starts the journey. If the journey incurs delays, one must pay a penalty for the wrong e-way bill due to the bill expiry.

A mistake in the e-way bill is bound to cause these delays and slow the process.

3. Loss of Input Tax Credit (ITC)

If e-way bill compliance is not managed correctly, there may be a risk of losing eligibility for claiming Input Tax Credit. This can lead to increased costs for the business, impacting profitability.

4. Penalties and Fines

One of the immediate consequences of e-way bill errors is the imposition of e-way bill penalties and fines by tax authorities. The amount of the GST e-way bill penalty can vary based on the nature and severity of the e-way bill non-compliance.

Year Percentage of Error Descriptions

2018 30% Errors in the initial period of e-way bill rollout

2019 25% Multiple reports stated 1 in 4 e-way bills had compliance issues

2020 20% Errors improve as the system stabilized

2021 18% 1 in 5 e-way bills still contain errors

2022 15% Gradual improvement with time

2023 12% Projected improvement with enhanced digitisation

Common Errors in E-Way Bill

Several common errors can occur during the generation and management of e-way bill. Businesses need to be aware of these errors to avoid potential consequences. So, the question is – how to avoid an e-way bill penalty? Here are some common e-way bill errors to avoid:

1. Incorrect Invoice Details

• A mismatch between the details on the e-way bill and the actual invoice.

• Incorrect invoice number, date, or value.

2. Mismatch in Goods Description

• There are discrepancies between the description of goods on the e-way bill and the actual goods being transported.

• Incomplete or inaccurate information about the goods.

3. Incorrect Vehicle Details

• Errors in providing the vehicle number, mode of transport, or transporter details.

• Failure to update vehicle details in case of a change.

4. Invalid GSTIN

Providing a correct Goods and Services Tax Identification Number (GSTIN) for the supplier, recipient, or transporter is essential information for e-way bill compliance.

5. Mismatch in the HSN Code

Incorrect Harmonized System of Nomenclature (HSN) code for goods transported causes e-way bill penalties.

6. Inconsistent Unit of Measurement

When there are inconsistencies in the unit of measurement used for quantity, weight, or volume on the e-way bill, causing penalties.

7. Late Generation of E-Way Bill

Failure to generate the e-way bill within the prescribed timeframe leads to delays and potential penalties.

8. Multiple E-Way Bills for the Same Shipment

If one generates multiple e-way bills for the same consignment, it causes confusion and potential legal issues.

9. Failure to Update E-Way Bill

Only update the e-way bill with relevant information if there are changes during transit, such as a change in the mode of transport or vehicle.

10. Non-Compliance with Distance Rules

Not adhering to the distance rules for e-way bill generation, especially for over-dimensional cargo. You hence need to calculate e-way bill validity period carefully.

How to Prevent Paying Penalty for E Waybill?

There is always a solution for any adverse situation, and an E-way bill is no exception. You need to adopt these precautions while filling Part B of the E-way Bill, which we have mentioned below, and you will be saved from the unnecessary burden of GST penalty for the e-way bill mistake.

5 Precautions that You Must Follow to Bar the Penalties

1. Never Skip Your E-Way Bill Generation

E-way bills are compulsory to be created by either the supplier or transporter of goods. They will face heavy penalties and fines for e-way bill errors if none of them generates it. Quickly generate e-way bills in compliance with regulations via various, e-way bill software that ensures seamless and penalty-free transactions.

2. Real-time Updates for Unforeseen Circumstances

If, within the valid time period mentioned in the Eway bill, the goods do not get transported because of unforeseen circumstances, then the concerned person can update the transportation details by generating a new Eway bill. Do real-time and hassle-free transportation updates of Part-B of e-way bill through e-way bill software, adapting to unforeseen circumstances and avoiding GST penalties for e-way bill mistakes.

3. Efficient Management of Multiple Vehicles Invoicing

If multiple vehicles are involved in goods transportation, then before the first consignment gets completed, the supplier must issue the invoice. Plus, there must be an invoice copy and delivery challans copies for further consignments. An original invoice will only be forwarded along with the last consignment.

Use software to streamline multi-vehicle invoicing and ensure each consignment meets e-way bill compliance.

Tip- If you change the mode of conveyance between transportation, you do not need to generate several e-way bills for each mode. Simply update the details on the existing e-way bill, and the process is complete. You can easily do it on E-Way Bill Software. No need for multiple e-way bills; simply update the information on a single e-way bill online and stay penalty-free. 

4. Consolidation of Multiple E-Way Bills

You must generate separate e-way bills for multiple consignments. Each invoice requires its own individual e-way bill for compliance. However, if all consignments are going in one vehicle, then after generating multiple e-way bills, you can consolidate those into one final e-way bill.  

Effortlessly consolidate multiple e-way bills into one final bill using our e-way bill software, simplifying the process for consignments in a single vehicle.

5. Document Verification and Validity Check

Verify that all required e-way bill documents are accurate and valid before transportation. Any errors can void the transaction and make you liable to pay a GST e-way bill penalty.

Mitigate risks of void transactions by utilising e-way bill software’s document management and validation tools, ensuring all necessary documents are accurate and valid.