Follow Us:

After the implementation of GST Act in July 2017, there are number of changes are made by the government to stabilise the GST Act but still it is in hit and try phase. As seen in past few months, number of GST fake Input Credit rackets were detected by GST Department. After that, GST Department has started to make GST law stricter so that only genuine dealers will stay in market and all defaulters were detected and let them away from GST Stream.

In this drive, GST Department has cancelled a large number of GST registration Suo-Motto who has not filed GST Return for continues 6 Months. In this editorial, we will discuss, some latest changes in GST law which if not complied may invite penal action which may even led to cancellation of GST Registration.

Allowability of GST Input Credit on the basis of GSTR-2B

In recent change made by GST department, now GST Input credit has been linked with GST credit shown in GSTR-2B of the registered dealer. If purchase invoice of a particular month is not filed by the seller on or before 11th /13th day of succeeding month than purchaser is not allowed to take GST credit of this purchase Invoice in that month. If any dealer, wants to claim excess credit in comparison to GST Credit available in GSTR-2B then GST Portal shows an error, even after that dealer claim the credit then GST Department may issue notice to the dealer for wrong utilization of GST Credit.

In this case, it is suggested that, if you do not want to block your working capital for 3 Months then you must purchase from a dealer who is filing GST return on Monthly basis and before the prescribed due date.

Blocking of GSTR-1 Filing, if GSTR-3B is not filed by Dealer

As per GST Notification No – 01/2021- Central Tax Dated 1st January 2021

(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;

(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;

(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.”.

Now filing of GSTR-3B and GSTR-1 is made mandatory by GST Department within given time frame. If due to any reason, dealer is not able to file GST return then GST Department has the power to do best judgement assessment on the basis of information avail with them.

Mismatch of Details Furnished in GSTR-1, GSTR-3B and Inputs Credit taken by Dealer

As per notification No -94/2020- Central Tax Dated 22th December 2020, if on comparison of information provided by GST Registered dealer there is significant differences or anomalies indicating contravention of the provisions of the Act or the rules made thereunder, it may lead to cancellation of registration of the said person, his registration shall be suspended and show cause notice will be issued for cancellation of GST Registration.

To avoid such kind of situation GST Returns must be filed with adequate care.

Wrong Mentioning of HSN Code or Non-Mentioning of HSN Code

This is the main concern area of all dealers. As explained earlier there are some fake firms running in the market which are dealing in bogus billing, to catch such firms this is the master stroke played by GST Department. From 01.04.2021 they have made mandatory for all dealers to mention HSN Code of there product in all sale and purchase invoice. We must assure that, we are writing correct HSN code of our product in our invoice. Wrong mentioning of HSN Code may invite penal action from department.

Display of GST Number, Firm name and Address

As required by GST Law, every GST Registered person is required to affix board outside its business premises showing its GST Number, Firm name and address. Now, GST Department has started physically verification of business premises. If such condition is not followed then it may invite penalty which may extend to cancellation of GST Registration.

Non-Filing of GST Annual Return and GST Audit Reports

Some dealers are still not aware about this compliance. If GST Turnover of any registered dealer is more than 2 Crore then he is liable to file GSTR-9 (Annual Return) and if his turnover is more than 5 Crore then along with GSTR-9, he is required to file GSTR-9C (GST Audit). This compliance must be done within given time frame otherwise it may cost very high to the dealer.


This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s person experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persist kindly intimate us to avoid such error for the benefits of others readers.

The Author can be reached at mail –shivsharma786@gmail.com and Mobile/Whatsapp – 9911303737/ 9716118384


Author Bio

My Self CA. Shiv Kumar Sharma. I am a member of "The Institute of Chartered Accountants of India" since 2012. Currently, I am in Practice and dealing in Direct and Indirect taxation along with ROC Compliances. I am writing Articles for Taxguru.in, casansaar.com and in the expert panel of ca View Full Profile

My Published Posts

Frequently Asked Questions while Filing Income Tax Return (Part-2) FAQ’s generally asked while Filing Income Tax Return Points to Consider while Filing Income Tax Return to Avoid Notices from Department FAQ On Reporting of Share Market Transaction in Income Tax Return Dark Side of Provisional Registration U/s 12A and 80G of Income Tax Act, 1961 View More Published Posts

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.


  1. Shyamlal Agarwal says:

    Our is a registered partnership firm since 1989 having valid pancard. While migration to Value Added tax department has obtained the Pan No. Of all the Partners. Subsequently during Suomotto migration to GST regime by department they have inadvertently considered the Pan No. Of Managing Partner in considered while allocation the GST Registration no(xxAAQPAxxxxxxxx). Now our firm is reflecting the Managing Partner as owner of the firm. As we have availed credit facilities with Bank they are insisting to get due ammendment in GST Registration no. reflecting Pan no.of firm to match as Partnership firm to continue the facilities. Please advise us the necessary process to ractify the anomaly in Registration reflecting propriety to a Partnership firm

  2. Anand Prakash Bhardwaj says:

    Dear sir
    at the time of migration by mistake we are registered in SEZ but we are normal tax payers so we are correction in Gst Registration please guide us how can possible that SEZ to Normal Registration.


Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
July 2024