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

Updated on:  

08 min read

A new sub rule 59(6) for blocking of GSTR-1 filing has been introduced by the Central Board of Indirect Taxes and Customs (CBIC) vide notification no. 94/2020 dated 22nd December, 2020. This rule deals with the form and manner of furnishing details of outward supplies.

All about blocking of GSTR-1 filing

If a registered taxpayer fails to file the return in GSTR-3B for 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.

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

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 credit on such purchase. Non-uploading of invoices in GSTR-1 will result in 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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