GST EWay Bill non-compliance

☰  GST E-Way Bill and Provisions of Non- compliance

Arjun (Fictional Character): Krishna, When and How  E-Way bill is applicable?

Krishna (Fictional Character): Arjuna, E-Way was made compulsory for interstate supplies from 01st April 2018, however for intra state supplies E-Way has been enabled in various states at respective dates. In Maharashtra E-Way bill was applicable from 25Th May 2018, E-Way bill has to be given for inter as well as intra state supplies exceeding Rs 50,000.

Arjun: Krishna, What will happen if goods are transported without the cover of Invoice or E-Way bill?

Krishna: Arjuna, If transport of goods commences without invoice or E-Way bill then penal provisions would be charged. Penalty amounting to Tax payable or Rs 10,000 whichever is more would be payable in case of default. Example-If a cement dealer transports goods worth Rs 2 Lakhs taxable at rate of 28% i.e Rs 56,000 is tax amount, without the cover of invoice or E-Way bill,then the penalty will be higher of- Rs 10,000 or Tax payable on such goods here Rs 56,000 Hence penalty here will be Rs 56,000.

Arjun: Krishna, What if goods are transported without cover of the invoice and E-Way bill and the goods are detained /seized by inspector/Tax officer?

Krishna: Arjuna, If the tax officer detains such goods then for releasing such goods and conveyance the owner of the goods needs to pay penalty as under- 1. When the owner of the goods comes forward to pay penalty and tax amount penalty will be equal to 100% of tax payable on such goods also the owner needs to pay tax on such goods at the same time. In case of exempted goods the penalty will be 2 % of the value of goods or Rs 25,000 whichever is less. 2. When the owner of the goods do not come forward to pay penalty and tax amount- penalty will be equivalent to 50% of the value of goods as reduced by tax paid also the owner needs to pay tax on such goods at the same time. In case Exempted goods, the penalty will be 5% of the value of the goods or 25,000 whichever is less. The taxpayer can also give security for an amount equivalent to amount 1 or 2 above, in the way prescribed by the officer. For example- If cement worth Rs 2,00,000 has been detained, taxpayer has to pay Tax (Rs 56,000) as well as penalty ( Rs 56,000) Tax on goods transported i.e Rs 56,000 as well as Penalty i.e Rs 44,000 (50% of the value of goods (2,00,000*50%=1,00,000)-tax Paid( Rs.56,000/-)) The taxpayer can also give security worth the penalty amount.

Arjun: Krishna, What actions can be taken by the tax officer?

Krishna: Arjuna, appointed officer may check goods at check posts. He can also check various documents that are required to be carried along with E-Way bill. If the officer is satisfied that tax has been evaded then goods can be confiscated by the officer after giving an order for the same. Once the goods are checked at one check post then such goods would not be checked at any other post.

Arjun: Krishna, what lesson the taxpayer should take from this?

Krishna: Arjuna, Taxpayers must ensure that the goods transported should be issued with E-Way bill if the consignment value exceeds Rs 50,000 and while transporting the goods taxpayer must know the value of the goods, total tax on such goods, and it must be transported with invoice copy and e-way bill .E-Way bill is just like 26AS, entries reflected in 26AS must be taken in books of account, in the same way, transactions in E-Way bill must be taken in the books. This might be cross-checked by the department. Hence taxpayers must check all the details and then only issue E-Way bill

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Lord Krishna to Arjun on GST on Immovable property Issues.


Lease, Rent, Pagadi etc on Immovable Property and issues in GST !

Arjun (Fictional Character): Krishna, recently Government have issued a circular in relation to tenancy right what exactly has been mentioned in this in this Circular? 

Krishna (Fictional Character): Arjuna, as you know, the sale of immovable property like land and building is not chargeable to Tax under GST. Also renting of residential property is exempt from the levy of tax. But renting of commercial properties like shops, offices, etc, are taxable. Taxpayers were in a confusion that transfer of tenancy rights against premium should be liable to GST or not. Hence, to clarify this issue the department has come up with this circular. 

Arjun: Krishna, what is taxability of the transfer of tenancy rights against tenancy premium? 

Krishna: Arjuna, the transfer of tenancy rights against tenancy premium popularly known as “pagadai system” wherein the landlord is the owner of the property but the possession of the property is with the tenant for which he gives periodic rent to the landlord but the tenant also has an option to sell the tenancy rights of the said property. The consideration received for the transfer of such right is taxable under GST. 

Arjun: Krishna, are there any exceptions for the above 

Krishna: Arjuna, there are two exceptions for the above consideration taxability 1. When rights are transferred in relation to residential property then no GST is charged on it which means only commercial properties right transferred are chargeable to GST 2. Upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable in respect of service by way of granting of long-term lease of thirty years, or more) of industrial plots or plots for development of infrastructure for financial business, provided by the State Government Industrial Development Corporations or Undertakings or by any other entity having 50 percent. or more ownership of Central Government, State Government, Union territory to the industrial units or the developers in any industrial or financial business area. Then amount received against the transfer of tenancy rights, would not be liable to GST as it is exempt. 

Arjun: Krishna, can you elaborate the same? 

Krishna: Arjuna, for example, CIDCO gives a plot on the lease for 99 years to Mr ‘A’, then no GST would be leviable on the tenancy premium received by CIDCO, being a government body. But when same rights are transferred by Mr. ‘A’ to Mr. ‘B’ against tenancy premium/ amount, GST would be leviable on such consideration received by Mr. ‘A’, as namely- Mr. ‘A’ is non government body. The property is not a residential property. The tenancy rights/ possession are being transferred and not the ownership of the immovable property which lies with CIDCO. 

 Arjun: Krishna, What lesson the taxpayer should take from this? 

Krishna: Arjuna, while renting or transferring the rights of the property, the taxpayer should take due diligence that to whom the tenancy right is being transferred, type of property for which rights are being transferred (Commercial and residential) and applicability of the GST on the Same.


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