The Goods and Services Tax Network (GSTN) has put in place the IT system so that businesses which have not filed tax returns for the stipulated period would be barred from generating e-way bills. GST Portal and E-way Bill Portal had been integrated in order to detect tax evasions. Next step is taken by Government to decrease tax evasions by stopping the generation of E-way bill for the defaulted GSTIN.
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The CBIC has issued notification no. 22/2019 – Central Tax, dated 23rd April, 2019, notified 21st June, 2019 as the date of applicability of Rule 138E. In 35th GST Council Meeting held on 21st June, 2019, GST Council extended the date to 21st August,2019.
As per Rule 138E, if an assesse, who is a composition dealer has not filed GST returns for two consecutive tax periods, e-way bill cannot be generated for making supply to him. In case of assesses other than composition dealers, if they do not file their GST returns for a consecutive period of two months, e-way bill can-not be generated for making supply to him.
Provisions of Rule 138E were notified on 31st Dec, 2018 vide notification no. 74/2018 – Central Tax.
Text of the provisions contained in Rule 138E is reproduced below:
“138E. Restriction on furnishing of information in PART A of FORM GST EWB-01.-
Notwithstanding anything contained in sub-rule (1) of rule 138, no person (including a consignor, consignee, transporter, an e-commerce operator or a courier agency) shall be allowed to furnish the information in PART A of FORM GST EWB-01 in respect of a registered person, whether as a supplier or a recipient, who,—
(a) being a person paying tax under section 10, has not furnished the returns for two consecutive tax periods; or
(b) being a person other than a person specified in clause (a), has not furnished the returns for a consecutive period of two months:
Provided that the Commissioner may, on sufficient cause being shown and for reasons to be recorded in writing, by order, allow furnishing of the said information in PART A of FORM GST EWB 01, subject to such conditions and restrictions as may be specified by him:
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Provided further that no order rejecting the request of such person to furnish the information in PART A of FORM GST EWB 01 under the first proviso shall be passed without affording the said person a reasonable opportunity of being heard:
Provided also that the permission granted or rejected by the Commissioner of State tax or Commissioner of Union territory tax shall be deemed to be granted or, as the case may be, rejected by the Commissioner.
Explanation:– For the purposes of this rule, the expression ―Commissioner shall mean the jurisdictional Commissioner in respect of the persons specified in clauses (a) and (b).”
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To avoid the restriction on Eway Bills, every tax payer has to ensure the filing of returns due for filing up to 30th April 2019 latest by 20 June 2019. Non compliance can prove to be a significant hardship for the taxpayers from the business point of view.
The move, officials believe, would help check GST evasion. During April-December, there were 3,626 cases of GST evasion/violations, involving Rs 15,278 crore.
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Touted as an anti-evasion measure, e-way bill system was rolled out on April 1, 2018, for moving goods worth over Rs 50,000 from one state to another. The same for intra-state movement was rolled out in a phased manner from April 15.
Transporters of goods worth over Rs 50,000 are require to present e-way bill during transit to a GST inspector, if asked.
