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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST UPDATE ON RESTRICTION ON GENERATION OF E-WAY BILL

GST UPDATE ON RESTRICTION ON GENERATION OF E-WAY BILL

GST UPDATE ON RESTRICTION ON GENERATION OF E-WAY BILL
After the recommendations made by the government in its 31st council meeting, the requisite notifications have been issued for the purpose of implementing these proposals. One such proposal made was that taxpayers who have not filed the returns for two consecutive tax periods shall be restricted from generating e-way bills. Thus, in this regard, the government has issued notification no. 74/2018- Central tax dated 31.12.2018 inserting a new Rule 138E after rule 138D of the CGST Rules. The provision contained in Rule 138E reads as follows:- 
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).‖.

From the above amendment it seems as if the government is determined to establish a well knitted framework to keep overall check on the assessee so as to ensure proper compliance with the GST Laws. The government is bringing such provisions which mandatorily require assessee to file returns and pay taxes else their business would be hampered. It is very well known that the provisions of e-way bill for movement of goods has been strictly adopted and it is provided that if the assessee fails to file return for two consecutive tax periods, the facility to generate e-way bill would be de-activated thereby effecting the working of the business of the assessee. This provision will be a setback for all assessees except service providers who do not generate e-way bills.

Another point that is worth observing is that the restriction to generate e-way bill will be applicable for supplier and recipient both so as to ensure that there is no loophole in the control mechanism developed by the government. Although, the liability to generate e-way bill is generally of supplier of goods but the recipient of goods is liable to generate e-way bill if the goods are purchased from un-registered supplier. However, in case where supplier and recipeint both are registered, there may be possibility that receiver can generate e-way bill. In order to prohibit recipeint to generate e-way bill in cases where the supplier defaults in furnishing return for two consecutive tax periods, it is being mentioned that e-way bill cannot be generated either in the capacity of supplier or recipeint thereby ensuring total check on the assessee.

However, the government has discriminated among the assessees as this restriction of generation of e-way bill will be attracted for composition assessees is they have not filed returns for consecutive two tax periods meaning two quarters. This is for the reason that the composition assessees are required to pay tax and file returns on quarterly basis. As against this, the normal assessees (having turnover below 1.5 Crores or above) will come within purview of this restriction if they fail to furnish returns for two consecutive months as they are required to file GSTR-3B on monthly basis. Accordingly, lenient approach has been adopted for assessees opting under composition scheme as the provisions of restriction of generation of e-way bill will attract at comparatively later point of time than normal assessees.

Lastly, the discretion given to the Commissioner to allow generation of e-way bill in exceptional circumstances for reasons to be recorded in writing on certain conditions is unreasonable as practically it is impossible to satisfy genuineness of case. The provision should illustrate the situations where the discretion could be exercised by the Commissioner. Moreover, the provisions as regards activation of the facility to generate e-way bills upon filing the returns for the required period is not incorporated which puts question mark on the removal of restriction after the assessee has complied with the GST law and has filed the desired returns. The government should also clearly state the period within which the assessee would be able to generate e-way bills after furnishing the required returns.

The content of this GST update is for educational purpose only and not intended for solicitation.

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