GST Filing Rules Will Change From 1st September 2021

Kalpesh Parab | Last updated: 30 August 2021

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From September 1st, 2021, new GST rules mean businesses that haven't filed their GSTR-3B returns for the previous two months will be blocked from filing their GSTR-1 details of outward supplies. This automated restriction aims to ensure tax payments are made promptly, preventing compliant businesses from having their input tax credit at risk due to vendors not filing their returns.

Businesses that have not filed GSTR-3B returns in the preceding two months will not be able to file details of outward supplies in GSTR-1 from September 1, GSTN has said.

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

In an advisory to taxpayers, GSTN, which manages the technology backbone for Goods and Services Tax, said that Rule-59(6) of Central GST Rules which provides for restriction in filing of GSTR-1, will come into effect from September 1, 2021.

GST Filing Rules Change Sept 1: What You Need to Know

According to the rule, a registered person shall not be allowed to furnish the details of outward supplies of goods or services or both in Form GSTR-1, if he has not furnished the return in Form GSTR-3B for preceding two months.

For taxpayers filing quarterly return, GSTR-1 filing would be restricted if he has not furnished the return in Form GSTR-3B for preceding tax period.

EY Tax Partner Abhishek Jain said this is a well thought restriction and a necessary control check to eliminate the cases where taxpayers although 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 government.

"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," Jain added.

AMRG & Associates Senior Partner Rajat Mohan said from September 1 GSTN is implementing GST rules that bars a taxpayer to file GSTR 1 wherein taxpayer has not paid taxes for previous two consecutive tax periods.

"This system will cumulatively result in barring the flow of tax credit to the customers of a non-compliant vendor," Mohan said.

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, Mohan added.