Discussion Topic: E-Way Bill Applicability in Case of Invoice Splitting and Deferred Movement of Goods

[Fahiyaz Ahmmed]

A retailer issues two tax invoices of Rs. 40,000 (1 January) and Rs. 35,000 (5 January) even though the actual sale and movement of goods take place on 10 January. The goods remain at the retailer’s premises until 10 January, when the buyer purchases them, arranges transportation, and moves the entire consignment together in one vehicle.

The issue for discussion is whether an e-way bill is mandatory when multiple invoices (each below Rs. 50,000) are transported together and the aggregate consignment value exceeds Rs. 50,000. Further, whether invoice splitting prior to actual supply can be considered valid under Rule 138 of the CGST Rules, and who is responsible to generate the e-way bill when the buyer causes the movement of goods.

ACTUAL FACT- A retailer intentionally issues two tax invoices of Rs. 40,000 and Rs. 35,000 to keep each invoice value below Rs. 50,000 and thereby avoid generation of an e-way bill, though the goods are transported together in a single consignment. If the GST department detects this as a deliberate attempt to bypass e-way bill provisions, what penalty is leviable on the retailer?

[Sadanand Bulbule]

Section 9 of the CGST Act authorises levy of GST only on taxable supplies made in reality, and not on mere paper-engineered invoices. In the absence of proof of actual supply, real movement of goods or real provision of services, no tax can be charged under Section 9, since GST is a levy on substance of the transaction and not on form or book entries.

So follow the statute in letter & spirit.

[Shilpi Jain]

If caught by the officer on road, surely penalty would be levied. So better to not split or even if split let the EWB be issued.

AI Summary

E-way bill duty for goods moved under multiple invoices below ?50,000 but over ?50,000 total; splitting risks penalty Rule 138 of the CGST Rules is raised as requiring assessment of e-way bill applicability where goods are moved in one vehicle under multiple tax invoices, each below ?50,000, but with an aggregate consignment value exceeding ?50,000; the consequence discussed is that an e-way bill should be generated to avoid enforcement action during transit. The forum also questions whether intentional invoice splitting before actual movement constitutes a valid basis to avoid e-way bill compliance; the stated consequence is exposure to penalty if detected as deliberate bypassing. Responsibility for e-way bill generation is discussed where the buyer causes movement; the stated consequence is that non-generation can attract roadside detention and penalty. Section 9 of the CGST Act is cited to assert GST applies only to real taxable supplies and not to paper-only invoicing, implying tax cannot be sustained without actual supply/movement.