Blocking and Unblocking of E-way bills
If the taxpayers do not consistently file their GST returns for two tax periods, the government portal blocks the e-way bills. This article discusses what causes this and what may be done to make the generation of e-way bills possible.
Blocking of E-way bills
In 2019, the government devised a significant modification to the e-way bill portal's ability to generate e-way bills. For taxpayers who have yet to file their returns for the preceding two consecutive months/quarters, the generation of e-way bills is blocked.
The e-way bill-blocking system went into effect on December 2nd, 2019. The government took this essential action due to a significant increase in tax defaulters.
There will be a standstill if taxpayers fail to file GSTR-3B for two or more consecutive months since they cannot create e-way bills to dispatch and receive goods. Only after a taxpayer files GSTR-3B are the e-way bills released the following day.
For instance, a taxpayer's GSTIN will be barred on the e-way bill site starting in March if they still need to submit their GSTR-3B for January 2021 and February 2021. The government's major goal is to find non-filers of GST returns and bring them into compliance.
How is the e-way bill blocked?
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 receive products.
How is the e-way bill blocked?
Filing of GSTR-3B
His GSTIN will immediately become unblocked the next day once the defaulting taxpayer submits GSTR-3B for the defaulting period. A taxpayer can use the methods listed below to create the e-way bill shortly after filing his returns:
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Go to the EWB portal and select the "Search Update Block Status" option.
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Enter your GSTIN and CAPTCHA code, then click "Go."
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The most recent filing status will display when you click "Update Unblock Status from GST Common Portal."
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If none of these helps, a taxpayer can contact the GST Help Desk to have their issue rectified.
Unblocking by a Jurisdictional Officer
Based on the manual representation from the taxpayer, even a Jurisdictional Officer can unblock GSTIN online.
Unblocking through online application in EWB-05
You can file an EWB-05 if you can justify not filing a GSTR-3B. Such a request can only be turned down by providing a fair chance to be heard.
Effect on taxpayers of e-way bills being blocked
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. The business can only cease if the goods are delivered on time. Therefore, the taxpayer must comply and submit returns on time to prevent such a problem. As a result, the GST revenue will increase overall, making the system more profitable.