How to Unblock E-Way Bill & Impact of Blocked E-Way Bill

If the e-way bill generation facility is blocked, how can you unblock it and what can be the impact of blocking.

Why was the concept of E-way bill blocking introduced:

The concept of E-way bill blocking has been introduced to comply with tax rules and prevent tax evasion. The department found in many cases that taxpayers were not filing returns on time, and defaulters were not filing returns but were easily selling their goods by generating e-way. Because of this the government was facing huge loss of revenue. To stop these, the government started the system of e-way bill blocking.

When can E-way bill be blocked:-

If the taxpayer does not file FORM GSTR-3B / FORM CMP-08 for two consecutive month/quarter (as the case may be) i.e. two tax periods, then the e-way bill generation will be blocked, meaning the taxpayer e-way Will not be able to generate bill.

Example: If a registered person has not filed return for January'23 & February'23. Meaning, if he has been defaulting in return filing for 2 consecutive months, then in such a case the E-way bill generation facility will be blocked.

What will be the impact on Taxpayer if E-way bill is blocked:-

The person whose e-way bill is blocked can neither supply the goods anywhere nor receive them from anyone else. This will have a huge impact on your business, because you will neither be able to sell nor buy.

To generate e-way bill, GSTIN of such blocked taxpayer cannot be used.

If goods are moved without generating e-way bill, the authority can impose fine or seize/detain the goods. If your goods are seized/detained, they will be released only after paying the penalty.

How can E-way bill be unblocked:-

When the taxpayer files Form GSTR-3B / Form CMP-08 or his default period of return filing is less than 2 tax periods, then automatically his e-way bill gets unblocked on the next day.

Example:

Suppose you have the liability of filing monthly return and you have not filed GSTR-3B for April-2023 and May-2023, then due to this your e-way bill has been blocked. So in this case, if you file the return of April-2023, then the default period will be less than 2 months and this will unblock your e-way bill.

E-way system receives information from GST Portal to know the return filing status of the taxpayer. If the taxpayer files the return, the GSTIN gets unblocked on the e-way bill system and the facility to generate e-way bill is enabled from the next day.

If a taxpayer has to generate e-way immediately after filing the return, then he will have to follow the procedure like this: -

First of all you have to go to the E-way bill portal and click on the option of Update Block Status in the search tab. Here you mention GSTIN & Captcha and click on Go. Here the status of your GSTIN will be shown. If your GSTIN status is showing block, then you can use update unblock status from GST common portal to get the latest filing status from GST portal and unblock it.

If even after this the system is not unblocking the GSTIN, then the taxpayer can contact the helpdesk and register his complaint.

What is the effect of GSTIN blocking on already generated e-way bill?

For example, if you have generated an E-way bill today in respect of which movement of goods is still pending and after generating the E-way bill, if you’re GSTIN is blocked, then what will be the effect on that already generated e-way bill.

In such cases, the already generated e-way bill remains valid, blocking of GSTIN has no effect on it. Movement of goods can also be done easily in respect of that E-way bill.

If any transporter or taxpayer who’s GSTIN has been blocked, he can update the vehicle information or transporter information in the already generated E-way bill and if there is a requirement for any extension, then he can also update it as per the rule.

Aspects related to GSTIN block/unblock of transporter:-

There are two types of transporters:-

1. Transporter registered in GST
2. E-way enrolled transporter

If the transporter is registered in GST and has not filed GSTR-3B return for two consecutive months/quarters, then his GSTIN gets blocked. If the GSTIN of the transporter is blocked then the consignor or consignee cannot use it to update the details of the transporter when they generate the E-way bill.

If the transporter is not GST registered, he is enrolled only on the E-way bill portal, then in such a case the block concept will not have any impact because there is no liability of return filling.

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