Introduction

With effect from 01‑06‑2026, the Government of West Bengal has reduced the intra‑state e‑way bill threshold from ₹1,00,000 to ₹50,000 for movement of goods within the State (excluding job work movements). This change has significant compliance implications for traders, transporters, and logistics operators under GST.

Statutory Basis of the Amendment

The revised threshold has been notified under Notification No. 02/2026‑C.T./GST dated 22 May 2026, issued by the Commissioner of State Tax, West Bengal, exercising powers under sub‑rule (14) of Rule 138 of the West Bengal Goods and Services Tax Rules, 2017. The notification, published in the Kolkata Gazette, mandates e‑way bill generation for intra‑state consignments exceeding ₹50,000 (excluding job work movements).

  • Rule 138(14), WBGST Rules, 2017 — empowers the Commissioner to fix the consignment value threshold for mandatory e‑way bill generation.
  • Section 2(68), CGST Act, 2017 / WBGST Act — defines job work transactions, which remain exempt from this threshold requirement.

Facts of the E‑Way Bill Amendment

  • Prior limit for intra‑state consignments in West Bengal was ₹1,00,000.
  • From 1st June 2026, an e‑way bill must be generated where the value of goods exceeds ₹50,000 for transactions within the State.
  • The requirement does not apply to goods moved for job work purposes, regardless of value.

Issues Involved

  1. Does the reduced threshold increase compliance burden for small & medium businesses?
  2. What is the legal consequence of failure to generate an e‑way bill under the revised limit?
  3. How do Courts interpret penalty provisions under Section 129 where an e‑way bill exists?

Central Issue

Whether Section 129(1)(b) can be invoked when:

  • Goods are transported with a valid e‑way bill and tax invoice AND
  • There is no dispute on tax liability.

Petitioner’s Argument

The petitioner contended that:

  • Valid e‑way bill + tax invoice demonstrate statutory compliance;
  • Section 129(1)(b) applies only where there is attempted evasion of tax or clandestine movement of goods;
  • In such cases, penalty under Section 129(1)(a) — the lesser penalty — is appropriate.

Respondent’s Argument

The revenue argued that any non‑compliance or procedural defect could trigger penal consequences under Section 129(1)(b), given the statutory emphasis on compliance.

Court Findings

The Allahabad High Court held that:

  • Where goods are transported with valid invoice and valid e‑way bill, there is no intention to evade tax, and hence the harsher penalty under 129(1)(b) cannot be imposed.
  • Section 129(1)(a) must be applied, which imposes penalty limited to the tax involved rather than a higher punitive charge.

Important Clarification

The ratio clarifies that compliance with e‑way bill norms — especially valid generation even under reduced thresholds — significantly affects penalty classification and mitigates punitive exposure.

Compliance Takeaways for Businesses

  • Update internal SOPs for e‑way bill generation to reflect the revised ₹50,000 threshold within West Bengal.
  • Ensure timely generation of e‑way bills before commencement of movement.
  • Maintain accurate documentation (invoices & transport details) to leverage beneficial court interpretation on penalty classification (as in the Allahabad HC case).
  • Job work movements within the State remain exempt from e‑way bill requirement regardless of value.

Sections & Rules Involved

  • Section 2(68), CGST Act, 2017 — Definition of Job Work
  • Section 129, CGST Act, 2017 — Detention, Seizure & Release of Goods; Penalty classification
  • Rule 138(14), WBGST Rules, 2017 — Power to fix threshold for e‑way bill
  • Notification No. 02/2026‑C.T./GST — West Bengal intra‑state e‑way bill threshold reduction

Disclaimer

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