The Madhya Pradesh High Court has upheld a hefty fine of Rs 1,32,13,683 imposed on a company for errors in the e-Way bill, triggering a nationwide transport strike from July 20 — interestingly just a day ahead of the GST Council meet. The state tax department had imposed a fine of Rs 1.32 crore, under Section 122 of SGST Act as the company failed to furnish full information in part B of the e-Way bill.
The company, Gati Kintetsu Express Pvt Ltd, challenged the penalty in MP High Court, stating that it failed to fully comply with the e-Way bill requirement “due to some technical glitch on e-waybill NIC portal”. However, the MP High Court dismissed the petition saying that the company’s explanation of technical error had no merit as it did not raise its grievance on the GST portal.
The decision has triggered a country-wide ‘Chakkajam’ (strike) by All India Motor Transport Congress from July 20 asking redressal of issues such as the e-Way bill, which has “crippled the transport operations”. The protest is also being launched to highlight other issues such as toll barriers and national permit for buses. The GST Council meeting will take place on July 21.
The e-Way bill was rolled out for inter-state movement of goods from April 1. It is being rolled-out in phases for intra-state movement of goods. The e-Way is required for goods with consignment value of Rs 50,000 or more. The bill contains two parts, in which part B is mandatory for goods being transported for more than 50 km.
“The GST implementation saw a lot of setbacks on technology and now strikes by trade unions, a looming standstill of transportation, ie, “Nation Wide Chakkajam” could paint a picture of civil unrest within India,” Jigar Doshi, Indirect Tax Partner at SKP Business Consulting told FE Online.
“The industry is not averse to the idea of e-way bill systems as it is not new in concept to many states but what is impacting the industry is the severe penalties for non-compliances/defaults of compliance which may or may not be system driven,” Jigar Doshi added.
But Pratik Jain, Indirect Tax Partner at PwC said to FE Online that the Madhya Pradesh HC judgement would “empower the authorities” across states to be more vigilant to scrutinize the consignments.
“Currently, in many companies, there is a confusion as to whether these compliances should be undertaken by the supply chain team or the finance/ tax teams and in the process, chances of error is high. Given these developments, treating the e-way bills as merely a ‘procedural’ requirement would be fraught with risk,” Pratik Jain said.
The e-Way bill was rolled-out with an aim to plug tax evasion and increase compliance under the new indirect tax regime of the GST. However, the technical glitches seem to be a big problem. The initial roll-out of the e-Way on February 1 was withdrawn on the very first day due to the massive level of technical errors.