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Blocking of GSTR-1 if GSTR-3B is not filed

Updated on:  

08 min read

Blocking of GSTR-1 filing has been notified by adding a new sub-rule (6) under Rule 59 of the CGST Rules. The Central Board of Indirect Taxes and Customs (CBIC) issued the update vide notification no. 94/2020 dated 22nd December 2020. This rule deals with the form and manner of furnishing details of outward supplies.

نظرة عامة على لوائح الفواتير الإلكترونية في المملكة المادة الثانية: الغاية والهدف المادة الثالثة: الأشخاص الخاضعون لهذه اللائحة المادة الرابعة: الأحكام المتعلقة بالفواتير والسندات الإلكترونية المادة الخامسة: المواصفات الفنية والقواعد الإجرائية المادة السادسة: الأحكام العامة المادة السابعة: الفروض والالتزام

Latest Updates on GSTR-1

29th August 2021
Company taxpayers can continue filing GSTR-1 and GSTR-3B using EVC or DSC up to 31st October 2021 via the CGST notification number 32/2021 dated 29th August 2021.

26th August 2021
From 1st September 2021, taxpayers will not be able to file GSTR-1 or use the IFF for August 2021 on the GST portal if they have pending GSTR-3B filings. It applies if GSTR-3B is pending for the past two months till July 2021 (monthly filer) or for the last quarter ending 30th June 2021 (quarterly filer) as per CGST Rule 59(6).

28th May 2021
The GST Council recommended in its 43rd meeting the following: 
(1) The monthly filing of GSTR-1 for May 2021 will be extended from 11th June 2021 to 26th June 2021.
(2) Filing of B2B sales invoices in IFF by QRMP taxpayers for May 2021 is extended from 13th June 2021 to 28th June 2021.
(3) Companies that are GST taxpayers have been given permission to authenticate returns using EVC instead of digital signature up to 31st August 2021.

(4) Late fee has been rationalised for future tax periods as follows:
(i) If the annual turnover in the previous financial year is up to Rs.1.5 crore then the late fee of a maximum of Rs.2,000 per return can only be charged (i.e Rs.1000 each for CGST and SGST).
(ii) If the turnover ranges between Rs.1.5 crore and Rs.5 crore then the maximum late fee of Rs.5,000 per return can only be charged (i.e Rs. 2500 each for CGST and SGST).
(iii) If the turnover is more than Rs.5 crore then a late fee of a maximum of Rs.10,000 (i.e Rs. 5000 per CGST and SGST) can be charged.

1st May 2021
(1) The due date to file GSTR-1 for April 2021 is extended from 11th May 2021 to 26th May 2021.
(2) The time limit to furnish B2B supplies on the IFF (optional facility), for April 2021 has been extended from 13th May to 28th May 2021.

9th January 2021
If a taxpayer with an annual aggregate turnover of Rs.5 crore does not opt into the QRMP scheme, he will be considered as a monthly filer of GSTR-1 and GSTR-3B from the January 2021 tax period onwards. Hence the due date for GSTR-1 shall be the 11th of next month and GSTR-3B shall be the 20th of next month.

All about blocking of GSTR-1 and IFF filing

If a registered taxpayer fails to file the return in GSTR-3B for the preceding 2 months then he would not be allowed to provide the details of outward supplies of goods or services or both in GSTR-1. The CGST Rule 59(6) covers this aspect.

Further, if the taxpayer has opted into the QRMP scheme to file returns on a quarterly basis, then he will not be allowed to file B2B sales on the IFF or file GSTR-1 if GSTR-3B of last quarter is pending for filing.

As per prior provisions, non-filing of GSTR-3B resulted in the blocking of e-way bill generation. But, as per new rules, it will result in the blocking of the e-way bill as well as GSTR-1 of the registered person. Also, if a taxpayer is required to file GSTR-3B due to the applicability of Rule 86B and fails to do so, his GSTR-1 will get blocked.

For example, if the taxpayer has not filed GSTR-3B for April and May, then his GSTR-1 will get blocked for June. For quarterly return filers if the taxpayer fails to file GSTR-3B for the preceding tax period then he will not be permitted to file GSTR-1 for subsequent quarters. The main motto of the Government behind this is to track the non-filers and make them compliant.

Rule 59(6) implementation on the GST portal

The GST portal is implementing this on the GST portal starting from 1st September 2021. Hence, if a taxpayer tries to save data of GSTR-1 or use IFF for August 2021 and attempts to click the ‘Submit’ button for filing, the portal throws an error. It flags any pending GSTR-3B returns for two months in a row (up to July 2021) or one quarter (ending 30th June 2021). The taxpayer should file pending GSTR-3B returns to perform GSTR-1 filing.
Tax officers cannot intervene to unblock the filing as it is system-automated.

Impact of the blocking of GSTR-1 filing

If a taxpayer is unable to file GSTR-1 then the counterparty will not be able to claim the credit on such purchase. Non-uploading of invoices in GSTR-1 will result in the non-reflection of the transaction in the counterparty’s GSTR-2A and GSTR-2B. Thus, the recipient will be automatically denied credit.

How to resolve the issue?

Filing of GSTR-3B will result in unblocking of GSTR-1. The Government wants the taxpayer to be compliant and thus these new provisions have been added to the existing rules and regulations.

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