Remedy for GST Scrutiny Notice – Single EWB Mismatch with GSTR-1 Due to Part-B Not Updated

[Rajagopal K]

Dear Experts,

A GST Scrutiny Show Cause Notice has been received for FY 2021-22 due to a mismatch between the E-Way Bill (EWB) turnover and GSTR-1 turnover for the month of October 2021.

Issue in Brief:

• Only one E-Way Bill is involved in this case.
• The EWB was generated, but due to an oversight, Part-B (vehicle details) was not updated.
• However, the goods were successfully delivered to the recipient, and there was no interception or detention by the GST authorities.
• The corresponding invoice was correctly reported in both GSTR-1 and GSTR-3B, and tax was fully paid.
• Since Part-B was not updated, this EWB was excluded from the system-calculated EWB turnover, causing a mismatch with GSTR-1, leading to the issuance of a show cause notice.

Requesting expert guidance on the following:

1. What is the most appropriate remedy or defense in this case of a single EWB with Part-B not updated, where tax has been properly paid?
2. Can this be considered a procedural lapse without intent to evade tax, and thus not warranting a penalty?
3. What kind of justification or documentation should be provided in the reply to the SCN?
4. Are there any relevant CBIC circulars, case laws, or precedents that may be referred to in the reply?

Looking forward to your valuable insights.

Thank you.

[Shilpi Jain]

What is the allegation inthe notice? Non-compliance with raising a proper EWB as per S.129, the penalty can be levied during transportation. After transportation penalty cannot be levied thereunder.

Also as mentioned rightly by you, there is no evasion of tax. So you should consider asking for a waiver of penalty if any levied u/s 126

126. (1) No officer under this Act shall impose any penalty for minor breaches of tax regulations or procedural requirements and in particular, any omission or mistake in documentation which is easily rectifiable and made without fraudulent intent or gross negligence.

[Rajagopal K]

Respected Madam,

Thanks a lot for your help! Your answer really cleared things up for me.

AI Summary

E Way Bill procedural lapse: treat Part B omission as rectifiable error and seek penalty waiver after showing tax paid. The scrutiny notice stems from a single E Way Bill excluded from system turnover because Part B was not updated despite delivery occurring, invoices being reported in GSTR 1 and GSTR 3B, and tax being paid. The advised response is to treat the omission as a procedural lapse without intent to evade tax, submit delivery evidence, filed invoices and EWB Part A, and request waiver of any penalty as a minor, rectifiable documentation error.