The CBIC has inserted Rule 138E in the CGST Rules which restricts generation of E-way bill by the taxpayer if the returns for a consecutive period of two months has not been furnished. Similarly, in case of composition taxpayers have not furnished the statement in FORM GST CMP-08 for two consecutive quarters. This rule has been made effective from 21st November 2019 vide Notification No. 36/2019 – Central Tax dated 20th August 2019.

The Rule 138E is reproduced below for your ready reference:

“138E. Restriction on furnishing of information in PART A of FORM GST EWB-01:

Notwithstanding anything contained in sub-rule (1) of rule 138, no person (including a consignor, consignee, transporter, an e-commerce operator or a courier agency) shall be allowed to furnish the information in PART A of FORM GST EWB-01 in respect of a registered person, whether as a supplier or a recipient, who,-

a) being a person paying tax under section 10, or availing the benefit of notification of the Government of India, Ministry of Finance, Department of Revenue No. 02/2019– Central Tax (Rate), dated the 7th March, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 189, dated the 7th March, 2019, has not furnished the statement in FORM GST CMP-08 for two consecutive quarters; or

b) being a person other than a person specified in clause (a), has not furnished the returns for a consecutive period of two months:

Provided that the Commissioner may, on receipt of an application from a registered person in FORM GST EWB-05, on sufficient cause being shown and for reasons to be recorded in writing, by order in FORM GST EWB-06, allow furnishing of the said information in PART A of FORM GST EWB 01, subject to such conditions and restrictions as may be specified by him.

Provided further that no order rejecting the request of such person to furnish the information in PART A of FORM GST EWB 01 under the first proviso shall be passed without affording the said person a reasonable opportunity of being heard:

Provided also that the permission granted or rejected by the Commissioner of State tax or Commissioner of Union territory tax shall be deemed to be granted or, as the case may be, rejected by the Commissioner.”


A careful reading of Rule 138E states that if a taxpayer had not furnished returns for a consecutive period of two months then ONLY he is not allowed to generated the E-way Bill.

Hence, if a regular taxpayer has not furnished the GSTR-3B for the month of September 2019 (due date: 20th October 2019) and October 2019 (due date: 20th November 20190 then he should not be allowed to generate the E-way bill with effect from 21st November 2019.

In case, the regular taxpayer has not furnished GSTR-3B for the month of October 2019 (due date: 20th November 2019) and the due date for filing GSTR-3B for the month of November 2019 has not expired (since, it will be due date: 20th December 2019), should be allowed to generate the e-way bill. Since, in this case the return for only one month (October 2019) is pending and the return for the month of November 2019 has not still fallen due.

In the above-mentioned case also, the E-way Bill website is not allowing the taxpayers to generate the E-way Bill (although the return only for one month is pending – October 2019) which is contrary to the Rule 138E and legislative intent.

Further, as per FAQ No. 5 regarding Blocking and Unblocking of EWB generation facility in EWB Portal dated 1st December 2019, blocking of EWB generation facility will be implemented on EWB Portal, when the taxpayer does not file GSTR 3B return for two consecutive tax periods. Thus, taxpayers who are required to file Form GSTR-3B and have not filed it for the month of January and February, will be blocked from EWB generation facility form March onwards.

The above-mentioned FAQ is also shows that the GSTN has taken the extended interpretation of Rule 138E which is not written in the GST Law. It looks like there are two GST Laws, one is being made by legislature and other being made by GSTN.

Further, as per proviso to Rule 138E, the taxpayer can file an application in Form-EWB-05 to Commissioner to allow furnishing of E-way Bill. But this Form is still not available on the GST Website. Then how to fill the Form-EWB-05 online. In such a case, the taxpayer shall submit manual Form-EWB-05.


Given the blocking generation of E-way Bill, the following questions needs to be answered by the Government:

  • There is no synchronization between the Law and GST/ E-way Bill website as far as this rule 138E is concerned.
  • Whether filing of GSTR-3B is the absolute proof that the applicable taxes has been paid by the taxpayer? If yes, then wait for NIL filings to overcome this rule.
  • The Rule 138E has created a distinction between supplier of goods and supplier of services. As if supplier of goods do not file GSTR-3B for two consecutive months, his business come to stand still as he is unable to generate the E-way Bill. But, supplier of services is not required to generate e-way bill, therefore, he can carry on the business.
  • E-way Bill is not required for consignment value below Rs 50,000 /-. Hence, this provision may encourage invoicing below Rs 50,000 /-.
  • As per FAQ no. 15 regarding Blocking and Unblocking of EWB generation facility, the e-way bill system will block the updating of Transporter Id, if registered in GST and has not filed the GSTR 3B Return for last two successive tax periods. However, there will not be any problem in updating details of the enrolled transporter id (i.e. who don’t have GSTIN), while generating the e-way bills.
  • Thus, if the transporter is registered and has not filed GSTR-3B but Seller and buyer has filed the GSTR-3B, they are also not allowed to generate E-way bill. Most of transporter are exempted to get GST registration and if they have taken, most of them are not supposed to pay tax under forward charge.


This is leading the great hardship to the taxpayers as not allowing non generation of E-way Bill will result into the stoppage of business of the taxpayer as the goods can not move without the cover of E-way Bill. This is resulting into the loss of business to the taxpayer and the taxpayer would also be liable for the penalties for late supplies of material to their customers. Who will be responsible for such loss of business and penalties? Whether, the Government expects that the taxpayer should file a writ to challenge the every issue being faced on the GSTN/ E-way Bill website? Who will bear the cost of such writ petition?

It looks like that such kind of harsh changes are being implemented at the E-way Bill website without being testing, consulted and vetted by concerned CBIC officials.

If the provisions are implemented in this manner, the business would come into stand still and the agenda of the Government to get higher tax collection will also be jeopardize. If taxpayer has not filed the return due to some reason, the department can issue notice under various sections of the CGST Act. But blocking of E-Way bill will result in complete stoppage of business. This cannot be the intent of the Government also.

In case of any Clarification, do contact the Undersigned.

CA. Chitresh Gupta
FCA, LL.B, B. Com(H)
Co-Author of book “GST –Law, Analysis & Procedures”
Faculty on Goods & Services Tax by ICAIEmail :
CA. Shilpi Gupta
FCA, M.Com, B.Com(H) -SRCC
Co-Author of book “GST –Law, Analysis & Procedures”
Faculty on Goods & Services Tax by ICAIEmail :

DISCLAIMER: The views expressed in this article are personal views of the Authors. This article includes general information about legal issues and developments in the law of GST in India. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this article to the fullest extent permitted by law.

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January 2021