The Goods and Services Tax Network (GSTN) has issued an important advisory regarding the Finance Act, 2023, introducing a three-year cut-off period for filing GST returns. Effective October 1, 2023, under Notification No. 28/2023 – Central Tax dated July 31, 2023, taxpayers will be barred from filing certain GST returns after three years from their respective due dates. This provision impacts several key GST filings, and its implementation on the GST portal is expected early in 2025.
Key Points of the Three-Year Filing Cut-Off
Applicability Across Major GST Sections:
- This amendment affects Section 37 (Outward Supplies), Section 39 (Payment of Liability), Section 44 (Annual Return), and Section 52 (Tax Collected at Source) of the CGST Act.
- Returns under these sections include GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8, and GSTR-9.
Effective Date and Portal Implementation:
- The three-year restriction came into effect on October 1, 2023, though the GST portal is set to reflect this change in early 2025.
- Post-implementation, returns not filed within this period will be permanently barred from submission, regardless of whether they are due for compliance or reconciliation purposes.
Impact on Taxpayers:
- Compliance Pressure: Taxpayers must ensure timely filing of all returns to avoid being permanently restricted from submission. This provision increases the urgency for regular compliance.
- Record Reconciliation: As the cut-off period will soon apply on the portal, taxpayers are encouraged to reconcile their records and promptly file any pending returns to prevent potential disruptions.
Scope of Returns Affected:
- The following returns fall under the new cut-off period:
- GSTR-1: Return for outward supplies
- GSTR-3B: Summary return for tax payment
- GSTR-4: Return for composition taxpayers
- GSTR-5 & GSTR-5A: Returns for non-resident taxable persons and online information/database access services
- GSTR-6: Return for input service distributors
- GSTR-7: Return for TDS filers
- GSTR-8: Return for TCS under e-commerce
- GSTR-9: Annual return for registered taxpayers
Advisory for Taxpayers
Given this significant update, taxpayers are urged to:
- Review and reconcile all past records to identify any pending returns within the affected categories.
- File any outstanding returns before the new system update in 2025 to avoid permanent filing restrictions.
The three-year bar on filing GST returns represents a key step by the GST authorities to streamline compliance. While this aims to maintain an updated record of taxpayer obligations, it also places a pressing compliance responsibility on businesses. Taxpayers are advised to review their GST filing history and ensure all returns are submitted within the permissible timeline to avoid disruption in their filing compliance status.
For more details, taxpayers can refer to Finance Act, 2023 and Notification No. 28/2023 – Central Tax for complete information on the new provisions.
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