Section 39 of CGST Act: Furnishing of Returns

Missed a GST return deadline? Penalties and interest might follow. From GSTR-3B to GSTR-4, the CGST Act, by section 39, sets the deadlines and rules for all taxpayers, ensuring smooth tax reporting. Among the returns associated with the provisions of the said section, GSTR-3B stands out as a summary return mandatory for eligible businesses to file.

What is Section 39 of the CGST Act?

Section 39 is the go-to section for understanding the GST return filing rules. The section explains how taxpayers, ranging from regular businesses to composition scheme holders, need to report monthly or quarterly sales, purchases, tax liabilities, and input tax credit claims. Section 39 of the CGST Act has been structured to provide a standardised framework, allowing registered businesses to file their returns on time and submit accurate information.

Detailed Analysis of Section 39

Let's understand Section 39's requirements for specific filing for various taxpayers.

Insights into Section 39 of the CGST Act: Timelines and Obligations for Filing GST Returns 

Filing returns on time under this section is critical to avoid compliance issues or late fees. Below are the primary deadlines for different categories of GST returns:

Whether GSTR-3B is Actually a Return or Not?

A debatable topic in GST compliance is whether GSTR-3B should be classified as a proper return under Section 39. Initially intended for immediate compliance as a provisional form, GSTR-3B is now most businesses' primary return form. However, over time, it became a key return form for businesses.

In Bharti Airtel Ltd. v. Union of India (2021), the apex court ruled that GSTR-3B is a valid return. The court emphasised that businesses cannot revise GSTR-3B after submission, underscoring its final nature. 

In 2020, the Karnataka High Court observed in the LC Infra Projects Pvt Ltd v. Union of India case that form GSTR-3B is a provisional return for temporarily collecting taxes. The court highlighted that the return filing process under Section 39 must be followed, which signifies that GSTR-3B isn't a statutory return under the GST Act.

In summary, while there were initial doubts, the Supreme Court has declared GSTR-3B to be a return under Section 39. This provides much-needed clarity for businesses and ensures that ITC claims and tax liability declarations made through GSTR-3B remain valid and legally acceptable.  

Consequences of Form GSTR-3B not being a return under Section 39

If GSTR-3B were deemed unofficial under Section 39, the consequences would be severe for businesses. Here's what could happen:

• ITC Reversals: Without recognising GSTR-3B as a valid return, claiming or reversing input tax credits (ITC) would become challenging.
• Late Fees and Penalties: Failure to file a recognised return under Section 39 could result in penalties or compliance issues.
• Increased Compliance Risks: Businesses might face greater scrutiny and risk in audits if GSTR-3B isn't accepted as a legitimate return.