The Central Government, by Finance Act, 2022, had inserted a new sub-section (4) in section 37 of the Central Goods and Services Tax Act, 2017 (CGST act, 2017) and the same has been notified by Notification No. 18/2022–Central Tax dated 28th September, 2022 with effect from 01 October, 2022. New sub-section (4) of section 37 of the CGST Act, 2017 is as under
Section 37(4): A registered person shall not be allowed to furnish the details of outward supplies under sub-section (1) for a tax period, if the details of outward supplies for any of the previous tax periods has not been furnished by him:
PROVIDED that the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, allow a registered person or a class of registered persons to furnish the details of outward supplies under sub-section (1), even if he has not furnished the details of outward supplies for one or more previous tax periods.
Further, sub-section (10) of Section 39 of the CGST Act, 2017 had also been substituted by the Finance Act, 2022 and the same has been notified by Notification No. 18/2022–Central Tax dated 28th September, 2022 with effect from 01 October, 2022. The substituted sub-section (10) of section 39 of the CGST Act, 2017 is as under
Section 39(10): A registered person shall not be allowed to furnish a return for a tax period if the return for any of the previous tax periods or the details of outward supplies under sub-section (1) of section 37 for the said tax period has not been furnished by him:
Provided that the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, allow a registered person or a class of registered persons to furnish the return, even if he has not furnished the returns for one or more previous tax periods or has not furnished the details of outward supplies under subsection (1) of section 37 for the said tax period.
The move is aimed at curbing issuance of fake invoices and tax evasion. These changes are being implemented prospectively and will be operational on GST Portal from 01st November, 2022. Accordingly, from October-2022 tax period onwards, the filing of previous period FORM GSTR-1 will be mandatory before filing current period FORM GSTR-1.
Illustration: Filing of October, 2022 period FORM GSTR-1 will be mandatory before filing FORM GSTR-1 of November, 2022 period. Further, from October, 2022 tax period onwards, filing of FORM GSTR-1 will also be mandatory before filing FORM GSTR-3B.
Illustration: Taxpayer will not be allowed to file FORM GSTR-3B for October, 2022 period if FORM GSTR-1 of October, 2022 period is not filed.
The FORM GSTR-1 is a return form for regular taxpayers who have to file details of outward supplies (under Rule 59) on every 11th of next month for those who cross the turnover more than 1.5 crores annually. The taxpayers who are under the threshold limit to 1.5 crores will have to file quarterly return.
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