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 it unblocked.
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 get the e-way bill facility unblocked.
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.
There are 3 ways you can get the e-way bill facility unblocked:
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:
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.
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.
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.
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.