Detention on the ground that ship to invoice is not accompanying the truck

[haribabu koduri]

Any judgements holding that invoice of the customer need not accompany the truck, in case of sale in transit. The truck is accompanied by invoice of the original supplier. Material is despatched to Kerala, based on the order of the customer in Tamil Nadu. There is no requirement that the invoice of the customer in Tamil Nadu to consignee (final customer) in Kerala. Any specific judgements on the subject. Please update

[KASTURI SETHI]

What is the status of E-way bill ?  Are all details (including invoice)  available  in E-way bill ? Such transaction is deemed supply. to the ultimate buyer. 

[haribabu koduri]

Yes. All details are available in E-way bill. No defect in tax invoice or e-way bill or LR. Department's contention is that 2nd invoice of the buyer to the consignee shall also accompany the truck.

[KASTURI SETHI]

In a  "bill to-ship to  mode''  there are two transactions. and three persons are involved. Suppose X, Y & Z .

Suppose  X  (customer) is registered  in Tamil Nadu , Y (seller) is also  in Tamil Nadu  and  X orders  Y to deliver  the goods direct to  Z in  Kerala.  Y will issue invoice to X charging CGST & SGST  and X (Tamil Nadu) will issue invoice to Z (in Kerala) charging IGST..

[KASTURI SETHI]

It is a technical as well as procedural lapse without involving revenue loss. You can contest the issue on the following grounds :

 (i) In this transaction no revenue loss has been caused to Govt.

 (ii) The concept of 'deemed supply' to the ultimate buyer.

 (iii) E-way bill (It covers all the details proving that it is a genuine transaction and hence bona fide mistake.

You can easily find out case laws on the above grounds. Here is one case law on the ground of E-way bill as solid proof of no loss of revenue caused and there was no possibility of evasion of tax.

2019 (12) TMI 160 - KERALA HIGH COURT POLYCAB INDIA LTD. Versus STATE OF KERALA

[Shilpi Jain]

There is no circular but an advisory which states that in bill to ship to model one ewb relating to only one side of the transaction is also sufficient.

Issues regarding Bill To Ship To for e-Way Bill under CGST Rules 2017

[haribabu koduri]

E-way bill is issued by the tax payer. No dispute is raised by the department.

Department is arguing that invoice issued by the buyer to the consignee (ultimate customer) is also to accompany the truck.

Buyer need not issue invoice as soon as the material is despatched by the supplier. Buyer can issue invoice before physical delivey of the goods of the to the ultimate consignee. If this position is clarified by any circular or in any judgement, that may help. Otherwise, department as  per the practice, simply levy penalty in detention cases.

[KASTURI SETHI]

As per Section 129 (1) (a), penalty equal to two hundred percent of tax payable is imposable. If tax is not payable (no evasion/no revenue loss), then penalty on what basis ? The issue is worth fighting.

Since offence has been committed regarding non-issuance of invoice to the ultimate buyer, you will have to face the rigours of litigation. However, you can expect fair justice from the Appellate Authority on the basis of your bona fides.

AI Summary

Truck Detained for Missing Customer Invoice Despite Complete E-way Bill; Debate on Revenue Loss and Deemed Supply A discussion in a forum revolves around the detention of a truck due to the absence of a customer invoice during a sale in transit. The truck carried the original supplier's invoice, while the department argued that the buyer's invoice to the consignee should also accompany the truck. Participants in the discussion highlight that all details were covered in the E-way bill, and no tax evasion occurred. They suggest contesting the issue based on the absence of revenue loss and the concept of deemed supply. A referenced case supports the argument that the E-way bill suffices for such transactions.