Non-filers of two monthly GST returns to be barred from filing GSTR-1

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Starting September 1st, GSTN has said that businesses which have not filed GSTR-3B returns in the past two months will not be able to file details of outward supplies in GSTR-1, PTI reported on Friday. Rule 59 (6) of Central GST Rules which provides for restriction in the filing of GSTR-1 will come into effect, it added. According to the rule, if a registered person has not furnished the return in Form GSTR-3B for the preceding two months, then he shall not be allowed to furnish the details of outward supplies of goods or services or both in Form GSTR-1

GSTR-1 of a particular month can be filed by businesses by the 11th day of the subsequent month. On the other hand, GSTR-3B, through which businesses pay taxes, is filed in a staggered manner between the 20th-24th day of the succeeding month.

Move to make GST portal fully automated

Tax consultant EY in a statement said that this is a well thought out restriction and a necessary control check and eliminate cases where taxpayers report their supply invoices in GSTR-1 (due to constant follow-ups from recipients’ side) but they do not submit their corresponding GSTR-3B return through which tax is actually paid to the government.

It added that compliant taxpayers would appreciate this move as till now their input tax credit was also at risk in case vendors do not file their GSTR-3B even though such invoice is appearing in GSTR-2A.

AMRG & Associates said that implementation of this Rule on the GST Portal would be completely automated and digital, thereby no separate approval would be necessary from the tax officer to restore the facility for filing of GSTR-1. It also added that the system will cumulatively result in stopping the flow of tax credit to the customers of a non-compliant vendor