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Implementation of Rule 138E of CGST Rules deferred to 21st Nov 19

Implementation of Rule 138E of CGST Rules deferred to 21st Nov 19
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Implementation of Rule 138E of CGST Rules deferred to 21st Nov 19

With deferment in implementation of Rule 138E – Restriction on the generation of e way bill will be now effective from 21st November 2019 instead of 21st August 2019

Considering the hardships of the taxpayers and in the public interest, the Government has again extended the due date by 3 months for implementation of Rule 138E of the CGST Rules. Once the Rule 138E of the CGST Rules is brought in force it would block the generation of e way bill if the GST returns are not filed for two consecutive periods.

CBIC took the decision to extend the due date to 21st November 2019 from 21st August 2019 and a CGST Notification no. 36/2019 was issued on 20.08.2019.

Earlier the due date was extended to 21st August 2019 vide CGST Notification no. 25/2019  dated 21st June 2019.

 

Current Scenario

Until now, taxpayers in India have never seen businesses being impacted by non-filing / late-filing of returns.  Compliances like filing GST returns, income tax returns, tax audits, statutory audits, etc are merely a procedure in minds of the taxpayer, that needs to be changed. People feel even if returns are not filed on time, there is always a choice of filing them with late fees, interest, penalty, etc.

 

Expected Scenario

It is the first time in the history of India, where non-filing / late-filing of returns for two consecutive periods would lead to disturbance in movement/transportation of goods which in-turn may impact the businesses. As per CGST Notification no. 22/2019 dated 23rd April 2019, Once the Rule 138E of CGST Rules,2017 which restricts furnishing of information in PART A of FORM GST EWB-01 is made effective from  21st August 2019, 21st November 2019. The taxpayers of India will realize the importance of filing GST returns on time and regularly. If a taxpayer fails to furnish the GST return for two consecutive periods (month/quarter), will be barred from generating the e-way bills for transporting of goods.

 

Detailed Analysis of  Rule 138E of CGST Rules,2017

(It was inserted vide CGST Notification No. 74/2018 dated 31.12.18 in fourteenth amendment to CGST Rules,2018)

No registered person in the capacity of a supplier or a recipient (whether he is a consignor, consignee, transporter, e-commerce operator or courier agency) will be permitted to generate or furnish information in Part A of FORM GST EWB-01.

If the return is not filed for two consecutive periods

  • If the person is a composition dealer:- GSTR-4 is not filed for two consecutive quarters.
  • If the person is other than a composition dealer:- GSTR -3B/ GSTR-1 is not filed for two consecutive months.

 

Is it still possible to generate an e way bill, if there is a  lapse in filing GST returns for two consecutive periods?

Yes, If a request is made by a registered person and Commissioner after giving an opportunity of being heard to the person, believes that there were a sufficient cause and reasons for failing to comply with the returns. After recording the reasons in writing, the Commissioner may pass an Order with conditions and restrictions allowing generation of an e way bill (i.e furnishing of information in PART A of FORM GST EWB 01).

Note: Permission granted or rejected by the Commissioner of State tax or Commissioner of Union territory tax will be considered/deemed as it is granted or rejected (as the case may be) by the Commissioner.

 

How will the restriction on generating e way bill become effective?

  • If anyone from supplier or recipient has defaulted in furnishing GST return for two consecutive periods then e way bill cannot be generated.
  •  If a supplier/recipient tries to generate an e way bill on the e way bill portal, and either of the party has defaulted. E way bill portal will not let you move further and generate the Part A of FORM GST EWB 01.

 

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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