Businesses of roughly 300,000 firms paying goods and services tax (GST) were likely impacted on Monday, as the government had blocked e-way bill generation for noncompliant assessees. These businesses had not filed their monthly GST Return (GSTR)-3B for two consecutive months. The government had notified the rule last month as an enforcement measure amid subdued revenue collection. The GST system has been grappling with low levels of compliance. Only 65-68 percent of eligible GST filers file the GSTR-3B within the due date, the GST Network (GSTN) data shows. “This month, the taxpayer will be alerted with a cautionary message while generating e-way bills, in case GSTR3B for the past two successive months of the consignor/consignee GST identification number (GSTIN) has not been filed. From next month onwards, such GSTINs will be blocked,” the note had said.
The same has become operational from December 3. According to the data by the GSTN, the information technology backbone of the two-year-old indirect tax regime, there are 2 million GSTINs that have not filed GSTR-3B for September and October. Of these 2 million GSTINs, 347,000 GSTINs (or 16.7 percent) had transactions in the e-way bill system for September and October, which are learnt to have been impacted immediately. “These firms were given enough warning last month that their e-way bill system would be blocked over noncompliance. Businesses not filing returns should not be allowed to move goods,” said a government official. Firms in Odisha and West Bengal are learnt to have been severely affected with this move.