Penalty quantum for E-Way Bill violation

With effect from 01.01.2022, penalty under Section 129 ibid is as follows:

• where the owner of the goods agrees to pays the penalty:
  • 200% of tax payable on such goods;
  • 2% of value of such goods (or) ₹ 50,000, whichever is less (in case of exempt goods).
• where the owner of the goods does not agree to pays the penalty:
  • 50% of value of such goods (or) 200% of tax payable on such goods, whichever is higher;
  • 5% of value of such goods (or) ₹ 50,000, whichever is less (in case of exempt goods).

It is important to note that Section 129 ibid does not impose the existence of mens rea, viz., intent to evade tax, as a condition to impose penalty. This has been watered-down, to an extent, with the issue of Circular No.64/38/2018-GST dated 14.09.2018, which specifies minimum penalty for minor offences. Yet, roving squad officers have been imposing the maximum penalty for any violation under Section 129 ibid. Therefore, the judiciary has come to the rescue of innocent taxpayers from the clutches of Section 129 ibid.