E-way bills is an electronic document generated for the specific movement of goods from one place to another and of value more than Rs. 50,000.
In the background of decrease in collection of GST revenue, Govt has implemented Rule 138E of CGST rules from 1st December 2019 as per which if taxpayer has not filed GSTR3B for 2 consecutive tax periods then he shall not be able to generate E-way bill both as consigner and consignee.
Rule 138E of CGST rules 2017 was inserted with effect from 31st December 2018 however its implementation was postponed till 1st of December 2019. The rule states that no person including a consignor, consignee, transporter, an e-commerce operator or a courier agency shall be allowed to furnish information in PART A of E Way Bill in respect of the registered person/tax payer if he has failed to
1. Furnish returns for 2 consecutive quarters if he has registered under Composition scheme under section 10 of CGST Act 2017
2. Any other person other than 1 above has not furnished returns for two consecutive months
Jurisdictional commissioner has the authority to allow for filing Part A of E way bill based on application by the tax payer and if sufficient cause being shown and reasons given is satisfied.
However, this is not a permanent blocking of the E way bill but temporarily till the returns filed falls within non filing less than 2 consecutive tax periods, the system automatically unblocks the GSTIN by next day.
If system still shows as blocked even after filing returns, then tax payer can update the block status by logging into E way bill portal →Search→Update Block status.
Further clarifications has been provided by CBIC in this regard:
1. Already generated E way bills will not be impacted while blocking the GSTINs
2. Already generated E way bills can be extended for validity though GSTIN is blocked subsequently
Without E way bills, goods movement stops completely which impacts the running of the business therefore taxpayers are ensuring to file the pending 3B returns and as a consequence GST collection in December has moved up. The impact of this rule is forcing taxpayers to file the 3B returns regularly.