Restriction in filing GSTR-1 will be implemented w.e.f. 01st September, 2021.

Rule-59(6) of Central Goods & Services Tax Rules, 2017 (‘CGST Rules, 2017’) was inserted vide Notification No. 1/2021 Central Tax dated 01-01-2021 w.e.f. 01-01-2021, provides for restriction in the filing of GSTR-1 in certain cases. It is also noted that earlier, this rule was numbered as sub-rule (5) vide Notification No. 94/2020-Central Tax, dated 22-12-2020, w.e.f. 22-12-2020.  New Rule 59(6) of CGST Rule, 2017 has come into force w.e.f. 01-01-2021 but could not be implement on portal. Now, it has been confirmed on the GST Portal that the provisions of this rule in enforcing the restrictions will be implemented on Common Portal from 1st September, 2021.

TAX Concept - GST, Good and Services Tax

New Rule 59(6) of CGST Rule, 2017 provides restriction in filing Form GSTR-1 electronically in the following situation

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) registered person, required to furnish a return for every quarter under the proviso to section 39(1), 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 (IFF), 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 present (99%) of such tax liability under rule 86B, shall not be allowed to furnish the details of outwards 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.

After implementation of the said Rule, the system will check whether before filing of Form GSTR-1, the following has been filed or not-

a) Form GSTR-3B for previous two months (in case of monthly filing);

b) Form GSTR-3B for previous quarter (in case of quarterly filing).

We know that every registered person (other than an input Service Distributor, a non-resident taxable person and a person paying tax under the provisions of section 10 or section 51 or section 52) under section 37 of the CGST Act, 2017 shall furnish, electronically, in Form GSTR-1, the details of outward supplies of goods or services or both effected during tax period on or before the tenth day of the month succeeding the said tax period. Accordingly, every registered person is liable to file this Form GSTR 1 even there is no supply or transaction during tax period.

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Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the authors whatsoever and the content is to be used strictly for educative purposes only.

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