Now non-filing of GSTR-3B for two months restricts filing of GSTR-1 / IFF

CA Umesh Sharma , Last updated: 31 August 2021
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Arjuna (Fictional Character): Krishna, which new rule has been implemented by CBIC on GST Portal from 1^st September 2021?

Krishna (Fictional Character): Arjuna, Rule 59(6) of CGST Rules,2017 providing for restriction in the filing of GSTR-1 has been inserted by the CBIC vide Notification No. 1/2021 dated 1^st January 2021 which will be implemented on GST Portal from 1^st September 2021.

Arjuna (Fictional Character): Krishna, what are the cases in which such restrictions shall be applicable?

Now non-filing of GSTR-3B for two months restricts filing of GSTR-1 / IFF

Krishna (Fictional Character): Arjuna, such restrictions in the filing of GSTR-1 shall be applicable in the following cases:

(i) a registered person who has not furnished the return in FORM GSTR-3B for the preceding two months;
For e.g., if you have not filed your monthly GSTR-3B for Jun-2021, you will not be able to file GSTR-1 for the month of Aug-2021.

(ii) a registered person who has not furnished the return in FORM GSTR-3B for the preceding tax period in case of quarterly filing.
For e.g., if you have not filed your quarterly GSTR-3B for Apr-Jun2021, you will not be able to file IFF for the month of Aug-2021.

Arjuna (Fictional Character): Krishna, whether separate approval would be required from the tax officer to restore the facility of filing of GSTR-1?

Krishna (Fictional Character): Arjuna, no separate approval would be needed from the tax officer to restore the facility of filing of GSTR-1 as it will be completely automated similar to the blocking & unblocking of the e-way bill as per Rule-138E and facility for filing of GSTR-1 will be restored immediately after filing of relevant GSTR-3B.

Arjuna (Fictional Character): Krishna, what care should be taken by the taxpayer to ensure compliance with the newly inserted rule?

Krishna (Fictional Character): Arjuna, after the implementation of Rule 59(6), records can be saved in Aug-21 GSTR-1/IFF if the taxpayer fails to file GSTR-3B for the month of Jun-21 but the filing of the same will be permitted only after filing GSTR-3B for the month of Jun-21. Also, to ensure no disruption in filing GSTR-1/IFF, taxpayers who have not filed their pending GSTR-3B, especially from the period November 2020 and afterward may do so at the earliest. This will also help the recipient in availing of Input tax credit uninterruptedly.