CBIC had notified that Government of India appoints the 21st day of June, 2019, as the date from which the provisions of the Rule 138E of Central Goods and Service Tax, Rule (Inserted by Central Goods and Services Tax (Fourteenth) Amendment Rules, 2018 rule 12 of [notification No. 74/2018–Central Tax, dated the 31st December, 2018]), which restricts generation of Part A of E-way bill in case on non-filing of returns for two consecutive months by a normal registered person and in case of composition dealers under section 10 of CGST Act, non-filing of returns for two tax periods.

The extract of the rule 138E is given 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;

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).”

As per the rule, a registered person can’t fill PART- A of FORM GST EWB-01 in case of another registered person, who had defaulted in filing retun for two months or two tax periods. For Example, M/s.ABC is selling goods to M/s.XYZ, for a value exceeding the limits prescribed for E-way bill, M/s.ABC is not allowed to submit/furnish information in relation such supply, when M/s.XYZ had defaulted in filing return. In this case M/s.XYZ, is also not permitted to furnish PART- A of FORM GST EWB-01. So non-filing of returns for two months of two tax periods will result in not getting goods and there by affect your business operations.

So registered persons especially those dealing in goods or require goods in providing the services, should ensure that all the backlogs in filing GST returns were cleared on or before 21st June, 2019 and ensure that the monthly returns are filed in time. This is an additional restriction, that is going to be imposed in addition of late fee for filing return and Interest on delayed payment of tax.