GSTR-1 Filing Rule Set to Change from Next Month. Know Details

Taxpayers who haven’t filed their pending GSTR-3B, especially from the period of November 2020 and after, are allowed to do so at the earliest possible time.

As of next month, taxpayers who have not yet filed their GSTR-3B returns for the past two months will not be allowed to file GSTR-1 return forms. This rule change was announced by the Goods and Service Tax Network (GSTN) last week on August 26. The new rule is set to take effect from September 1 and it will be enacted under Rule-59(6) of CGST Rules, 2017 according to the notice issued by the GSTN. This new rule change also applies to those taxpayers who have not furnished their Form GSTR-3B for the preceding quarter as well.

In the advisory that was circulated on Thursday, the authority said, “a registered person shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 if he has not furnished the return in FORM GSTR-3B for preceding two months.”

The Form GSTR-1 is essentially a monthly or quarterly return that is filed by the taxpayers in order to disclose the details of their outward supplies for a particular month of the quarter, along with their tax liabilities. The Form GSTR-3B on the other hand is a monthly summary that is filed by taxpayers by around the 20th of every following month or by the 22nd or 24th of the month following a particular quarter. This form basically discloses the supplies made during the month along with GST that is yet to be paid, input tax credit claimed, purchases on applicable reverse charges and so on.

“A registered person, required to furnish return for every quarter under the proviso to sub-section (1) of section 39, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3B for preceding tax period,” added the GSTN.

After the new rule has been implemented on September 1, 2021, the system will be directed to check if the person has indeed filed the GSTR-3B for the previous two monthly tax periods as well as for the previous quarterly tax-period. Based on this, the system will restrict the filing of GSTR-1/IFF till Rule-59(6) is complied with, said the statement.

The GSTN said in the press release, “This check will operate on clicking the SUBMIT button of GSTR-1 and the system will give an error message if the condition of Rule-59(6) is not met. It may be noted that records which have been saved in GSTR-1 will remain saved and filing of such records will be permitted after Rule-59(6) is complied with.”

It was also mentioned that the implementation of Rule-59(6) on the GST Portal would be completely automated. “…Similar to the blocking & un-blocking of e-way bill as per Rule-138E and facility for filing of GSTR-1 will be restored immediately after filing of relevant GSTR-3B. No separate approval would be needed from the tax-officer to restore the facility for filing of GSTR-1,” mentioned the GSTN in the notice.

The GSTN also gave an added provision. It had mentioned that in order for it to ensure that there were no disruptions in the process of filing GSTR-1/IFF, taxpayers who have not yet filed their pending GSTR-3B, especially from the period of November 2020 and after, are allowed to do so at the earliest possible time.