On the first day of the new year, 2021 a lone GST notification has been issued mandating that GSTR-3B defaulters cannot file GSTR-1 or use IFF facility (in case QRMP Scheme has been opted for).
The Notification we are talking about is Notification No. 01/2021–Central Tax dated 01-01-2021 (Central Goods and Services Tax (Amendment) Rules, 2021)which has inserted sub-rule (6) in Rule 59 of the CGST Rules, 2017.
For ready reference of our readers the new sub-rule (6) of Rule 59 along with its analysis is reproduced as under:
| Text of sub-rule (6) of Rule 59 of the CGST Rules,2017 | Analysis |
| “(6) Notwithstanding anything contained in this rule, – | It is important to note that the new sub-rule starts with non-obstante clause which means it overrides other sub-rules of Rule 59 (Form and manner of furnishing details of outward supplies). |
| (a) 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; | In order instill discipline in taxpayers in case GSTR-3B return is not filed for preceding two months , GSTR-1 cannot be filed. Example: In case GSTR-3B for January and February, 2021 is not filed , GSTR-1 for March, 2021 cannot be filed by such tax payer. |
| (b) 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; | This provision has been inserted for taxpayers who have opted for QRMP Scheme and are therefore required to file GSTR-3B on quarterly basis. QRMP scheme is effective from 1st January, 2021. As per this provision, in case a person who has opted for QRMP scheme has not filed GSTR-3B for preceding quarter (say Jan-March,2020) will be debarred from filing GSTR-1 for subsequent quarter (Apr- June,2020) and also from using IFF facility for uploading invoices. Although effectively the IFF facility will be debarred in above case after the due date of filing of GSTR-3B viz 22nd / 24th of April, 2020. For details regarding QRMP Scheme Click Here |
| (c) a registered person, who is restricted from using the amount available in electronic credit ledger to discharge his liability towards tax in excess of ninety-nine per cent. of such tax liability under rule 86B, 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. | This clause debars filing of GSTR-1 or using IFF facility for taxpayers who are covered under Rule 86B of the CGST Rules and who have not filed GSTR-3B for preceding tax period. Rule 86B has laid down limit of 99% of output tax liability for using the ITC i.e. taxpayers who are covered by said Rule need to pay 1% of output tax liability mandatorily even if they that ITC available. For details regarding Rule 86B Click Here |
It is important to note here that the above sub-rule (6) of Rule 59 of the CGST Rules,2017 is effective from 01-01-2021 and therefore in cases the taxpayers have not filed their GSTR-3B for preceding two months viz October and November,2020 they will not be able to file GSTR-1 for the the month of December, 2020 in January,2021.
READ / DOWNLOAD NOTIFICATION: CLICK HERE
Also Read: Changes in GST law applicable from January 1, 2021 we should know
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
