Non-Generation of E-way Bill after November 21, 2019, in case of non-filing of GST Return

Narendra Kumar

05 Sep, 2019

With deferment in implementation of Rule 138E and considering the hardships of the taxpayers and also in the public interest CBIC has extended the date from August 21, 2019, to November 21, 2019. After this, no person shall be allowed to generate an e-way bill, if he has not furnished the returns for two consecutive tax periods.

The GST notification No – 36/2019^[1] was issued on 20.08.2019 to extend the due date to 21^ST November 2019 from 21^st August 2019

Analysis of the notification No-36/2019^[2] i.e. Rule 138E of GST Rules, 2017

Any person registered in the capacity of a supplier or a recipient (whether he is a consignor, consignee, transporter, e-commerce operator or courier agency) will not be permitted to generate or furnish information in Part A of FORM GST EWB-01 i.e. E-way Bill If the return is not filed for two consecutive periods.

• In the case of composition dealer: – If the person has not filed GSTR-4 for two consecutive quarters.
• Cases other than a composition dealer: – If the person has not filed GSTR -3B/ GSTR-1 for two consecutive months

Comparative Analysis of Current and Expected scenario

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

After this notification, the expected scenario will change the way of thinking of taxpayer, for the very first time in India 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. 

The importance of filing GST returns will increase as the taxpayers of India will realize to file the GST returns timely and regularly. However, 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.

Also, Read: What is the E-Way Bill System under GST?.

Details required for generating E-WAY bill

• The invoice of the goods
• Document details of taxable supply of goods
• Details of the taxable value of the goods,
• Tax amounts and HSN code.

To track down non-compliant businesses who failed to deposit the tax dues, the above details are important for GST department. Additionally, there are strict penal provisions for transporting consignments without the record of e-way bill.

Under what circumstances it is possible to generate an e-way bill if there is a failure in filing GST returns for two consecutive periods?

If a request is made by a registered person and after giving an opportunity of being heard to the person if the commissioner believes that there were a sufficient cause and reasons for failing to comply with the returns. The Commissioner after recording the reasons in writing 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 E-WAY BILL 01).

Tax will be considered as it is deemed granted or rejected (as the case may be) if the permission is granted or rejected by the Commissioner of State tax or Commissioner of Union territory.

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

Conclusion

In case of defaults made by the taxpayers, the access of E-way bill will be blocked and the non-compliant taxpayer businesses will be left handicapped and will be required to file the GST returns. Under the new regime, the generation of e-way bill is expected to be automated for B2B invoices. In Goods and Services Tax Network (GSTN) the IT system has been put in place so that businesses which have not filed tax returns for the stipulated period would be barred from generating e-way bills.

Our Recommendation Rules Regarding e-Way Bill Under GST.