Gstr 1 Filing Facility Will Be Blocked For Non Filing Of Gstr 3b Returns

Recently, the

Goods and Services Tax Network (i.e., GSTN) has introduced a new feature namely ‘Blocking of GSTR-1 if GSTR-3B is not filed for the preceding month’. This new functionality will be implemented on the GST Portal shortly, after which the system will check the filing of preceding GSTR-3B before permitting to file GSTR-1 for the subsequent month. Blocking of GSTR-1 filing has been notified by adding a sub-rule (6) under Rule 59 of the CGST Rules. The Central Board of Indirect Taxes and Customs (CBIC) vide the Central Goods and Services Tax (Eighth Amendment) Rules, 2021 announced that if a taxpayer fails to file GSTR-3B for the preceding month, such a taxpayer will not be allowed to file the GSTR-1 for the subsequent month. For more details on Central Goods and Services Tax (Eighth Amendment) Rules, 2021, Click here

Rule 59(6) of Central Goods and Service Tax Rules

According to Rule 59(6) of the Central Goods and Service Tax Rules, if a registered taxpayer fails to file the return in GSTR-3B for the preceding month then he would not be allowed to provide the details of outward supplies of goods or services or both in GSTR-1.

GSTR-1

GSTR-1 is a type of GST return that needs to be filed by all normally registered taxpayers on a monthly or quarterly basis. GSTR-1 contains all the information related to the sale of goods or/and services.

FORM GSTR-3B

GSTR-3B is a type of GST return that contains all the information related to inward and outward supplies. GSTR-3B needs to be filed by all the normal registered taxable persons monthly or quarterly basis.

Gstr 1 Filing Facility Will Be Blocked For Non Filing Of Gstr 3b Returns

From 1st January 2022, the GSTR-1 return filing facility will be blocked for Non-filing of GSTR-3B Returns for the previous return period. It was originally planned for September 2021, but with the 45th GST Council Meeting, the implementation of the rule is postponed to

1st January 2022. The rule also includes blocking of invoice furnishing facility (IFF) on the portal for businesses who have opted QRMP scheme. The return blocking rule intends to ensure that GST returns are filed on time and there is no delay in the filing process. This rule is in continuation of the blocking of an e-way bill generation facility, effective from 15th August 2021.

Compulsory filing of the GSTR-3B

From 01 January 2022, a Registered person shall not be allowed to furnish FORM GSTR-1 or Invoice Furnishing Facility under GST (IFF), if he has not furnished the following forms:

FORM GSTR-3B for the preceding month
If he has not furnished FORM GSTR-3B for the preceding quarter (QRMP).

Blocking of GSTR-1 return filing facility

From 1

st January 2022, the GSTR-1 return filing facility will be blocked if the taxpayer has not submitted the return in FORM GSTR-3B for the previous return period. In simple words, starting from 1st January 2022, taxpayers will not be able to file GSTR-1 or use the IFF for December 2021 on the GST portal if they have pending GSTR-3B filing. This restriction applies to both monthly return filing as well as quarterly filing. If you are filing returns monthly, the last months would be considered. For example, if a taxpayer has not filed GSTR-3B for December 2021, the GSTR-1 filing facility will be blocked from the 1st of January, 2022. In the case of quarterly returns, the previous quarter will be considered. Here, along with restrictions to file GSTR-1, even the invoice filing facility (IFF) would be blocked. For example, if the taxpayer has missed filing GSTR-3B for the July-September quarter, the above-mentioned facility will be blocked in the portal from the subsequent month, starting from January 2022.

Returns considered for blocking GSTR-1 filing facility

On implementation of the above rule, before the filing of GSTR-1/IFF for a tax period, the system will check whether the following has been filed or not:

GSTR-3B for the previous monthly tax period (for monthly filers)
GSTR-3B for the previous quarter (for quarterly filers)

Based on the status of the previous two returns, the system will restrict the filing of GSTR-1/IFF until the taxpayer complies with the rule.

Rule 59(6) Implementation on the GST portal

This functionality of ‘Blocking of GSTR-1 if GSTR-3B is not filed’ will be implemented on the GST Portal shortly, after which the system will check the filing of preceding GSTR-3B before permitting to file GSTR-1 for the subsequent month.

A taxpayer has not filed the monthly GSTR-3B for November 2021. Now, the taxpayer tries to file GSTR-1 for December 2021 on 10th January 2022. The system will not allow the filing of GSTR-1 for December 2021 and will allow the filing of GSTR-1 for December 2021 only after the filing of GSTR-3B for November 2021.

How does blocking of the GSTR-1 rule work?

Once the new rule of blocking the GSTR-1 facility is implemented, the portal will have an additional check to verify the status of the previous return. This check will operate on clicking the ‘SUBMIT’ button of GSTR-1 and the system will give an error message if returns for the previous tax periods are not filed. Since the system checks and restricts filing after clicking submit button, the details/records which have been entered in GSTR-1 will remain saved. Once you have complied with the above rule, you can use the same details and submit the return. This rule works similar to blocking & unblocking of the e-way bill facility. The blocking and unblocking are completely automated. The portal will automatically block the facility if GSTR-3B is not filed for two previous return periods. In the same way, it will restore the facility as soon you comply with the provision i.e., after filing of GSTR-3B for the relevant tax period. No separate approval would be needed from the tax officer to restore the facility. In the advisory issued on the portal, the government recommends taxpayers who have not filed their pending GSTR-3B may do so at the earliest to ensure no disruption in filing GSTR-1/IFF.

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Frequently Asked Questions

Common questions about GSTR.

The purpose of blocking the GSTR-1 filing facility for non-filing of GSTR-3B returns is to ensure that GST returns are filed on time and there is no delay in the filing process. This rule is intended to encourage taxpayers to file their GSTR-3B returns promptly, as failing to do so will prevent them from filing their subsequent GSTR-1 returns.

This new rule of blocking GSTR-1 filing for non-filing of GSTR-3B returns will come into effect from 1st January 2022. Originally planned for September 2021, the implementation of the rule was postponed to 1st January 2022 after the 45th GST Council Meeting.

Before allowing the filing of GSTR-1/IFF for a tax period, the system will check if the taxpayer has filed GSTR-3B for the previous monthly tax period (for monthly filers) or the previous quarter (for quarterly filers). If GSTR-3B has not been filed for the preceding period, the system will restrict the filing of GSTR-1/IFF until the taxpayer complies with this rule.

Even if the GSTR-1 filing is blocked due to non-filing of GSTR-3B, the details or records already entered in GSTR-1 will remain saved. Once the taxpayer complies with the rule by filing GSTR-3B for the relevant period, they can use the same saved details and submit the GSTR-1 return.

Yes, this rule of blocking GSTR-1 filing for non-filing of GSTR-3B applies to both monthly and quarterly return filers. For monthly filers, the system will check for the previous month's GSTR-3B, while for quarterly filers, it will check for the previous quarter's GSTR-3B.

Yes, the blocking and unblocking of the GSTR-1 filing facility is completely automated. As soon as the taxpayer complies with the rule by filing the pending GSTR-3B for the relevant period, the system will automatically restore the GSTR-1 filing facility. No separate approval from the tax officer is required.

Yes, this rule also includes blocking of the invoice furnishing facility (IFF) on the portal for businesses who have opted for the QRMP scheme. If a QRMP taxpayer has not filed GSTR-3B for the previous quarter, their IFF will be blocked from the subsequent month, starting from January 2022.

The rationale behind implementing this rule is to ensure timely filing of GST returns, particularly GSTR-3B, which is a crucial return containing details of inward and outward supplies. By linking the filing of GSTR-1 to the previous period's GSTR-3B, the government aims to encourage compliance and discourage delays in return filing.

This rule of blocking GSTR-1 filing for non-filing of GSTR-3B is applicable to all normally registered taxpayers who are required to file GSTR-1 and GSTR-3B returns. However, the article does not specify if it applies to other types of registrations, such as composition dealers or casual taxable persons.

The government recommends that taxpayers who have not filed their pending GSTR-3B returns should do so at the earliest to ensure no disruption in filing GSTR-1/IFF. This will prevent their GSTR-1 filing facility from being blocked and allow them to comply with the new rule effectively.