E-way bill not updated in toll plaza

[Shri Sasikumar]

Dear Experts, We are having a business in Andhra Pradesh, Recently we are served with a notice by the GST department listing the transactions related to FY 2020-2021, listing some of the purchase invoices whose vehicles carrying eway bill had not crossed the Andhra Toll plaza. Kindly suggest your views for drafting a suitable reply. Thanks.

[Shilpi Jain]

Did the movement happen inter-State or whether the vendor had got it delivered from your own State?

This is a factual matter and suggest you approach a professional who can look at the documents, etc. and then decide what has to be replied.

[KASTURI SETHI]

Although the records of toll plaza is a documentary evidence with the department yet you can fight the issue with so many other documentary evidences you have in your possession. Only one evidence of toll plaza cannot negate all other documentary evidences.

Case law can be useful.

[Padmanathan KV]

A1. Whether the transport vehicle was yours or Third party? If its third party transporter, try getting the details as to vehicle log book, toll receipt if paid in cash, Fasttag statement etc. 

A2. Also check whether the invoice/ e-way bill has been manually sealed by State Motor vehicle/ Transport Department (check-post). That is also a proof of movement through check-post.

B1. Ask for the RFID report from the GST department, which is the relied upon document for issue of show cause notice.

B2. Try to verify the accuracy of the RFID report with the Toll plaza (most toll plazas have details with them only for 2 years, after which it is with Third Party data management). However, preempt the option of verifying the accuracy of Department report.

C1. Try to provide other evidences of movement such as loading/ unloading charges (if paid to union welfare board), stock register, transportation charge reciepts, etc...

C2. Keep in mind the recent Supreme Court ruling in Ecom Gills.

[Padmanathan KV]

Whether the goods in question is iron/ steel or scrap etc.? if so, it is a common practice which happens like this:-

Buyer gives order for goods to the seller (Mostly through some agent)

Seller issues invoice and e-way bill (from his location)

Actually, the goods comes from some other locations (arranged by the agent)

The buyer (who doesn't know the background) is under the impression that the transport is geniune as per the document.(and he has all the rights to believe so too!!!)

[Padmanathan KV]

In continuation to above,

Even in such cases, the Buyer cannot be denied ITC under section 16(2) as fulfilled all the conditions, including (b) he has received the goods or services or both.

Even transaction such as the one that I have mentioned above should be covered under the larger ambit of Explanation (i) "where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;"

And therefore, be considered as deemed to be received by the buyer.

If at all there is any violation of provisions (attracting section 122), it is on part of the seller/agent and not the buyer in my opinion.

[Sadanand Bulbule]

Dear querist

Legally speaking, it is not mandatory pass through  " Toll gates". But if toll gate is en route, and the vehicle does not pass through it, the officers normally suspect the credibility of such transportation of goods. Many a times, the drivers adopt deviation routes to save " toll fees" even in genuine cases. Here facts speak louder than the law.

[KASTURI SETHI]

Sh. Sadanand Bulbule Ji,

Sir, Your one sentence conveys one thousand words. This is the art of precis writing. Thus reader's time and energy is saved.

AI Summary

Input Tax Credit may survive despite missing toll plaza records; secure carrier, toll and RFID evidence to reconcile movement. Advisers recommend assembling alternative documentary proof of movement-vehicle logbooks, toll/Fastag receipts, loading/unloading or transportation receipts, stock registers, and manual check post seals-and obtaining the RFID report relied upon by the department to verify and reconcile toll plaza data. Where transport is arranged by an agent or third party, buyers who have met statutory receipt conditions should consider entitlement to Input Tax Credit under section 16(2) and Explanation (i); alleged non passage through a toll plaza is not conclusive and misconduct may lie with the seller or agent.