Impact on a transporter with the implementation of Rule 138E

Conclusion The Government's this move of linking GST returns to the generation of e way bill will surely help to keep a check and curb tax evasion. Govt. plans to stop the movement of goods which will in turn stop or disturb the business for the persons who don’t pay tax and file their returns regularly on time. This move of govt. is likely to compel the taxpayers to file returns and pay tax on time. 
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Impact on a transporter with the implementation of Rule 138E

After the rollout of the GST regime and E way bill system, transporters have been categorized into two categories.

  • GST registered transporters:- In terms of GST compliance, they will be similar to a regular taxpayer as per the GST regime providing the services of transportation.
  • E way bill enrolled transporters:- They are not GST registered taxpayer, they just provide the services of transportation. They have to enroll themselves on the E way bill portal in order to provide transportation of services after the rollout of the E way bill system.

What is Rule 138E?

If a taxpayer does not file GST Return (GSTR-3B) for two consecutive tax periods then the facility to generate e way bill will be blocked on the e way bill portal.

Click here to understand in detail > No GST Returns = No E way Bills


Can an e way bill enrolled transporter (i.e.Transporter without GSTIN) be blocked?

NO.

  • Rule 138E is applicable only to the taxpayers who have not furnished the GST return(GSTR 3B) for two consecutive months.
  • An e way bill enrolled transporter cannot be blocked as he is not registered under the GST regime So the question of filing/not filing GST returns does not arise.
  • He is just enrolled on the e way bill portal for the movement of goods. His details can be entered/updated as a transporter for the generation of e way bill.

Can a GST registered transporter (i.e.Transporter with GSTIN) be blocked?

YES

  • Rule 138E is applicable only to the taxpayers who have not furnished the GST return(GSTR 3B) for two consecutive months.
  • A GST registered transporter can be blocked if the GST returns(GSTR 3B) are not furnished for two consecutive months.
  • A blocked transporter cannot be a party for the generation of updation of e way bill.

What happens if the taxpayer is blocked after generation of e way bill?

Blocking of GSTIN will have not have any effect/impact on the already generated e-way bills as vehicle/goods are already in transit. Already generated e way bills will be considered as valid and the movement to the destination will not be affected as GSTIN is blocked for any of the parties concerned in the transaction.

A transporter/Consignor/Consignee whose GSTIN is blocked shall be permitted to make the following changes for the active e way bills if required:-

  • Details of the vehicle can be updated.
  • Details of the transporter can be updated. (eg. Transporter ID)
  • If the extension is required, the extension will be permitted.

Note: Even as e way bill enrolled transporter will be permitted to update the e way bill already generated.

Click here to understand the procedure of unblocking the blocked GSTIN


What happens if the taxpayer is blocked before the generation of e way bill?

A blocked GSTIN cannot generate/update an e way bill. A blocked GSTIN can neither be a Consignor nor a  Consignee nor a transporter for the generation/updation of e way bill

If GSTIN of anyone from the following

  • Supplier
  • Recipient
  • GST registered transporter

is blocked for non-compliance of Rule 138E then it will not be possible to generate e way bill.

Click here to understand the procedure of unblocking the blocked GSTIN


Conclusion

The non-compliant taxpayer should be ready to face the brunt. Blocking the GSTIN will result in non-movement of goods which is equivalent to no business in most of the cases. So file your GST returns and pay taxes within due dates to continue with businesses or be ready to face the consequences. 



 

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About CA Ankita Khetan 165 Articles
Ankita is a Chartered Accountant in practice and holds a Diploma in IFRS (from ACCA, UK). She is also a Commerce PG and Certified Independent Director (from IICA). She holds a certification in Forex and Treasury Management. Her area of expertise is GST and Income tax. She is passionate about reading, writing, and sharing knowledge on areas related to finance and taxation.

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