- Section 138(14)(d) of Punjab GST Rules, states that no e-way bill is required to be generated in respect of movement of such goods and within such areas in a State and for values exceeding such amount as the Commissioner of State Tax, in consultation with the Chief Commissioner of Central Tax, may notify.
- As per Rule 138(1), movement can be
a) In relation to supply or
b) For reason other than supply
Hence the word “movement” and “supply” can not be used interchangeably.
- As per section 7(1) of CGST read along section 143 of CGST, sending of goods for Job Work is not supply.
- It has been provided in Notification dated 29-01-2018 issued under Punjab GST Rules that no e-Way Bill will be required to be generated for a period of two months from 1st February, 2018 for intra-state supply of goods provided such goods do not cross the state boundary during transit.
- Hence movements otherwise than by way of supply like sending goods for Job Work , sending goods for sale on approval, sending goods to own establishment with in same state and covered by same registration number is not supply. Hence these movements ostensibly have not been exempted for 2 months and hence e way bill is applicable to such movements being not, supplies and hence also not intra state supplies.
- Further it has been held by Kerala High Court in Indus Towers that penalty u/s 129 for non issue of e way bill can be levied only if the goods are liable to confiscation u/s 130. Section 130 covers supplies only and hence Job work movements may not be covered by section 130.
- Further as per Kerala High Court in Age Industries (P.) Ltd. [2018] 89 taxmann.com 276 (Kerala), no penalty can be levied u/s 129 for mere infraction of Rule 138(2) [i.e. generation of E Way Bill by registered person] when goods were transported for job work on delivery challans and no taxable supply is involved so long as authenticity of delivery challan was not doubted , because no tax amount is involved and hence goods are not liable to confiscation u/s 130.
- Further held by Kerala High Court that merely because goods are supplied to unregistered firm, no tax evasion can be suspected.
- It is hence urged that confusions regarding Punjab Notification may be resolved and till then in the spirit of Kerala High Court Judgment no penalty can be levied on Job work movements.
- In this regard notification issued by Gujrat can be observed which exempts all movements and is no restricted to supply only.