Need for blocking the e-way bills
Recently, the government has come up with a significant change with regards to the e-way bill generation facility on the e-way bill portal. E-way bill generation is blocked for taxpayers who have not filed their returns for the previous two consecutive months/quarters. Thus, if a taxpayer has not filed GSTR-3B for two or more consecutive months, then he/she cannot generate e-way bills to do dispatches and receive goods, resulting in a standstill. Only when a taxpayer files GSTR-3B, the e-way bills will get unblocked on the next day.
For example, if a taxpayer has not filed his GSTR-3B for January and February, then his GSTIN will get blocked in the e-way bill portal from March. The main intention of the government is to track down the non-filers of GST returns and make them compliant. Recently, there has been a considerable increase in the number of tax defaulters, which led the government to take this necessary step.
The system of e-way bill blocking was implemented from the 2nd of December 2019.
How is the e-way bill blocked?
As per the rule, when a taxpayer fails to file GSTR-3B for two or more consecutive months on the GST portal, the same will be communicated to the e-way bill system and block the GSTIN. The GSTIN of such blocked taxpayers cannot be used for generating e-way bills either as Consignor or Consignee. It means the taxpayer will not be able to receive goods if his GSTIN gets blocked.
How to unblock the e-way bill?
A. Filing of GSTR-3B
Once the defaulting taxpayer files GSTR-3B for the defaulting period, his GSTIN will get unblocked automatically by the next day.
A taxpayer can also generate the e-way bill soon after filing his returns by following the steps below :
- Visit the EWB portal and choose the option ‘Search Update Block Status’.
- Enter the GSTIN, CAPTCHA Code and click on ‘Go’.
- Click on ‘Update Unblock Status from GST Common Portal’; this will reflect the recent filing status.
- In case this doesn’t work, a taxpayer can reach out to the GST Help Desk and get the query resolved.
B.Unblocking by Jurisdictional Officer
Even a Jurisdictional Officer can unblock GSTIN online based on the manual representation from the taxpayer (This facility is not available as of now).
C. Unblocking through online application in EWB-05
EWB-05 can be filed by providing a sufficient cause for non-filing of GSTR-3B. Such a request cannot be rejected without giving an adequate opportunity of being heard (As of now, this facility of online application is not active).
Impact on taxpayer
The biggest concern for a taxpayer with this new system is that he/she cannot deliver/receive goods without an e-way bill. If the goods are transported without an e-way bill, the authorities can levy a fine equivalent to the tax amount payable. Such goods can even be seized or detained, and the goods may be released only on payment of the tax amount along with a penalty.
If the goods are not delivered on time, the business may come to a standstill. Thus, to avoid such a situation, the taxpayer has to be compliant and file returns on time. This will lead to an overall improvement in the GST revenue, and thus, the entire system will become more compliant.
1. When an e-way bill was already generated but the GSTIN was blocked later, what will be the position of the goods in transit?
There will be no impact on the already generated e-way bills of the blocked GSTINs. They are valid and can be used for movement of goods.
2. Can a taxpayer update vehicle and transporter details and extend the validity of e-way bills with regards to the blocked GSTINs?
As per the rule, the e-way bills which are already generated and valid can be updated with the vehicle and transporter details by the authorised taxpayer/transporter.
3. What is the impact of blocking/unblocking on transporters?
Transporters who are not registered on the GST portal but only enrolled on the EWB portal will not be impacted. But, those who are registered on the GST portal cannot use their GSTIN as Consignor, Consignee or transporter while generating an e-way bill once the GSTIN is blocked.
4. Can a transporter generate an e-way bill for a blocked supplier/recipient?
No, a transporter cannot generate an e-way bill for a blocked supplier/recipient.