No GST Returns = No E way Bills

No GST Returns = No e way bills
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No GST Returns = No E way Bills

The Government is all set to roll on the restriction on the generation of e way bill. It is very likely that this will help the Government to crack down on non-filers and inturn answer the nation’s concern about GST collection which is dipping regularly on month by month basis. If sources are to be believed this time Government has no plan to again grant any extension in implementation of Rule 138E of CGST Rules, 2017.

Rule 59(4) of CGST Rules, 2017 – Form GSTR 1 will be blocked if Form GSTR 3B is not furnished


Let’s understand what is the need for implementation of Rule 138E of CGST rules

Current Scenario – before the implementation of Rule 138E

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 – after the implementation of Rule 138E

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 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.

Click here to read how transporter will get affected with the implementation of Rule 138E


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 regular taxpayer:- GSTR -3B is not filed for two consecutive periods.

Click here to download the CGST notification no. 36/2019 which was issued on 20.08.2019 to check the effective date of implementation.

If the person is a regular taxpayer:- GSTR -1 is not filed for two consecutive periods.

Click here to download the CGST notification no. 75/2019 which was issued on 26.12.2019 to check the effective date of implementation.

 


NIC has issued the following in respect of Rule 138E (E-way Bill System)


What is the due date for the implementation of Rule 138E of CGST Rules?

The due date for implementation of Rule 138E of CGST Rules is 21st November 2019.

Click here to download the CGST notification no. 36/2019 which was issued on 20.08.2019 to check the effective date of implementation.


What will happen if Rule 138E of CGST Rules are implemented?

Once Rule 138E is implemented,  if a taxpayer does not file GST Return for two consecutive tax periods then the facility to generate e way bill will be blocked on the e way bill portal.

Note: If anyone from supplier or recipient has defaulted in furnishing GST return for two consecutive periods then e way bill cannot be generated.

Note: 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.


Is it 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, he 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 the generation of an e waybill (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 can the facility to generate e way bill will be restored on the e way bill portal?

The facility to generate e way bill will be restored automatically on the e way bill portal, once the taxpayer complies with the filing of even one of the pending returns.

Click here to understand in detail how to unblock the GSTIN after the filing of GST returns?


Notifications issued so far regarding the implementation of Rule 138E

The effective date for implementation – 21st November 2019 vide a CGST Notification no. 36/2019 dated 20th August 2019.

The effective date for implementation – 21st August  2019 vide CGST Notification no. 25/2019  dated 21st June 2019.

The effective date for implementation – 21st June  2019 vide CGST Notification no. 22/2019  dated 23rd April 2019.


For your reference – Screenshot of Rule 138E of CGST Rules from the CGST Notification no. 74/2018  dated 31st December 2018

 

For your reference – Screenshot of Amendments to Rule 138E of CGST Rules from the CGST Notification no. 75/2019  dated 26th December 2019


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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CA Ankita Khetan