All About Blocking and Unblocking of E-Way Bills
Due to the increasing number of tax defaulters, the Government was forced to implement a system to block e-way bill generation for taxpayers who had not filed their GST returns for two consecutive months.
In this article, we will learn about the blocking of e-way bills and how you can get eway bill unblocked.
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Blocking of E-Way Bills
On 2nd December 2019, the Government implemented a system wherein if a taxpayer has neglected filing their GST returns over two consecutive months, then they are not allowed to generate E-Way bills through the GST Portal, or through any other method. Without a valid e-way bill, the taxpayer is unable to send or receive goods, and if he/she tries to send them without an e-way bill and gets caught, the tax authorities are able to impose a fine that is equivalent to the tax amount payable on the goods being transported.
Essentially, the taxpayer’s business operations reach a standstill due to the blocking of e-way bills, and he/she must file their GSTR-3B return for the pending period to unblock the e-way bill and also check e way bill update block status.
What is Blocking of E-way Bills?
The GST portal is required to notify the e-way bill system and block the GSTIN when a taxpayer fails to submit GSTR-3B for two or more consecutive months. Such prohibited taxpayers’ GSTINs cannot be utilised to create e-way bills as either the consignor or the consignee. If the taxpayer’s GSTIN is blocked, he won’t be able to send or receive goods.
Unblocking of E-way Bills
There are 3 ways you can get the e-way bill facility unblocked:
- Through Filing of GSTR-3B
- Through a Jurisdictional Officer (currently unavailable)
- Through an online application in EWB-05
Filing of GSTR-3B
The GSTIN of the taxpayer will be unblocked the day after the defaulting taxpayer submits GSTR-3B for the default period. A taxpayer can use the methods listed below to create the e-way bill shortly after filing his returns:
- Go to the EWB portal and select the “Search Update Block Status” option.
- Enter your GSTIN and CAPTCHA code, then click “Go.”
- The most recent filing status will display when you click “Update Unblock Status from GST Common Portal.”
- If none of these helps, a taxpayer can contact the GST Help Desk to have their issue rectified.
Also Know About: How To Update, Reject and Cancel an E-Way Bill
Unblocking of E-way Bills by a Jurisdictional Officer
If a taxpayer’s e-way bill generation has been blocked due to the non-filing of their GSTR-3B return, they can also request their Jurisdictional Officer to unblock their GSTIN online. The Jurisdictional Officer will manually verify the request and can unblock the GSTIN if they find the taxpayer’s reasons for non-filing to be valid. However, this facility is currently unavailable.
Unblocking of E-way Bills Through Online Application in EWB-05
If a taxpayer has a valid reason for not being able to file their GSTR-3B return, they can file an EWB-05 to request unblocking of their e-way bill generation. They will be given a chance to present their case and only after hearing their case will a decision be reached on whether or not their GSTIN should be unblocked.
How Does Blocking of E-way Bills Affect Taxpayers?
With this new system, taxpayers’ main concern is that they will need an e-way bill to send or receive goods. The authorities may impose a fine equal to the amount of tax due if the products are moved without an e-way bill.
Such products may even be impounded or seized and only released after paying the tax and a penalty. Business operations cannot be run smoothly without generating e-way bills as goods will consistently not be delivered, or be delivered late, leading to major problems. Therefore, the taxpayer must comply and submit returns on time to prevent such a problem. This will lead to an overall improvement in revenue collection, by ensuring that more taxpayers fall in line with the current regime.
Conclusion
Carrying a valid E-way bill is mandatory when transporting goods worth more than Rs 50,000 in India. Without the ability to generate e-way bills, taxpayers whose business revolves around sending and receiving physical goods will face major roadblocks in their business operations. The Government’s primary motive in implementing this system was to force defaulting taxpayers to get compliant sooner rather than later and start filing their GSTR-3B returns each month as required.
I am a chartered accountant with over 14 years of experience. I understand income tax, GST, and balancing financial records. I analyze financial statements and tax codes effectively. However, I also have a passion for writing, which is different from working with numbers. Recently, I started writing articles and blog posts. My goal is to make finance easier for everyday people to understand.
Frequently Asked Questions
- When an e-way bill was already generated but the GSTIN was blocked later, what will be the position of the goods in transit?If the e-way bill was generated before the GSTIN was blocked, the goods can still move with that bill. The blockage doesn’t impact goods already in transit, as the e-way bill remains valid until its expiration.
- Can a taxpayer update vehicle and transporter details and extend the validity of e-way bills with regards to the blocked GSTINs?No, taxpayers cannot update vehicle or transporter details, nor extend e-way bill validity if their GSTIN is blocked. Blocking restricts all e-way bill activities until the GSTIN is unblocked.
- What is the impact of blocking/unblocking on transporters?When a GSTIN is blocked, transporters cannot create new e-way bills for that taxpayer. Unblocking the GSTIN restores normal e-way bill operations for the transporter, allowing transactions to resume as usual.
- Can a transporter generate an e-way bill for a blocked supplier/recipient?No, transporters cannot generate e-way bills for a supplier or recipient with a blocked GSTIN. The blocking limits all e-way bill activities for that party until the GSTIN is unblocked.
