Not Filing GST Returns for 2 Months will get you Barred from Generating E-way Bills

Not Filing GST Returns for 2 Months will get you Barred from Generating E-way Bills

June 21, 2019 marks the day when non-filers of GST returns for two consecutive filing periods would no longer be able to generate E-way bills for their consignments. This move is in an attempt to keep a check on and curb GST evasion that has highly impacted the overall revenue.

The Central Board of Indirect Taxes and Customs (CBIC) has said that starting June 21, any consignor, consignee, transporter, e-commerce operator, or courier agency would be barred from generating E-way bill owing to their failure to file tax returns for the stipulated time period as mentioned in the GST rules.

E-way bill system was rolled out on April 1, 2018, for inter-state movement of goods, and from 15th April, 2018 in a phased manner for intra-state transportations. Businesses are required to generate E-way bills for transportation of goods worth over INR 50,000 in a go. After one year of its introduction, the law still needs some amendments to make businesses more compliant to the GST system and the government is leaving no stone unturned to ensure all the in-practice and possible tax-evasive methods are eradicated.

Businesses are supposed to file their GST returns by the 20th day of the subsequent month, and failing to file the same for two straight months will result in them being barred from generating any more E-way bills. But the businesses registered under composition scheme are required to file quarterly results by the 18th day of the subsequent month following the end of a quarter, so they will be barred from generating E-way bills if they fail to file quarterly GST returns twice in a row, that is for six months. The Goods and Service Tax Network (GSTN) has put an IT system in place that would identify the non-filers of GST returns for the defined period and block them from generating E-way bills in the future, wef. June 21, 2019.

Circumventing and exploiting the system for unlawful gains has been a standard practice for quite some time now. Non-conformance to the GST has been a norm for many dishonest traders across the length and breadth of the nation. As per official records, there were 3,626 cases of tax evasion during the period of April to December 2018, amounting to a sum of Rs. 15,278 crores. This measure to restrict the generation of E-way bills by defaulters was deemed important by the Finance ministry of India as an anti-evasion measure.

This rule will make sure that the businesses working on the franchise model, e-commerce companies, logistics, and FMCG companies would be immediately required to come up with a productive workflow model where their defaulting business partners are either completely removed from the entire supply-chain ecosystem, or are compelled to strictly comply with the GST regime hereon. The system makes sure e-commerce operators, suppliers, and transporters do not sell or transport goods to the non-filers. This will help businesses across the country stay GST-compliant and keep tax evasion in check, ultimately contributing positively to the economy.