Important GST Update: No Filing Allowed After 3 Years Of Due Date; Time To Clear Pending Returns

File Photo

New Delhi: GST tax payers, starters in early 2025 will face a stricter deadline for filing their monthly and annual GST returns. As per the Goods and Services Tax Network (GSTN), returns related to outward supplies, payment liabilities, annual filings, and tax collected at source will become time-barred if not filed within three years of their original due date. With these updates soon to be implemented on the GST portal, taxpayers are encouraged to check their records and submit any pending GST returns on time to avoid complications.

“The said changes are going to be implemented in the GST portal from early next year (2025). Hence, the taxpayers are advised to reconcile their records and file their GST returns as soon as possible if not filed till now,” GSTN stated.

“As per the Finance Act,2023 (8 of 2023), dt. 31-03-2023, implemented w.e.f 01-10-2023 vide Notification No. 28/2023 – Central Tax dated 31th July, 2023, the taxpayers shall not be allowed file their GST returns after the expiry of a period of three years from the due date of furnishing the said return under Section 37 ( Outward Supply), Section 39 (payment of liability), Section 44 ( Annual Return) and Section 52 (Tax Collected at Source).

These Sections cover GSTR-1, GSTR 3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR 7, GSTR 8 and GSTR 9. The said changes are going to be implemented in the GST portal from early next year (2025). Hence, the taxpayers are advised to reconcile their records and file their GST Returns as soon as possible if not filed till now,” GSTN stated in a notification issued on October 29, 2024.

Rajat Mohan, Senior Partner at AMRG & Associates highlighted that the GSTN’s new three-year deadline for filing GST returns marks a significant shift in compliance rules. This update is aimed at promoting timely filings, improving data accuracy, and reducing the backlog of unfiled returns in the GST system. By setting a clear cut-off for delayed filings, taxpayers are encouraged to promptly review and update their records.

Mohan pointed out that this new policy could be challenging for taxpayers with past unfiled returns, especially those who may struggle with organizing older records due to administrative or logistical hurdles. He recommended that businesses take a proactive approach by reviewing their filing history and clearing any pending returns before the deadline to avoid compliance issues and possible penalties once the three-year limit is enforced on the portal.

Experts advise that, following the new advisory, taxpayers should stay alert and make any necessary adjustments before December 2024. Taking these steps can help avoid potential issues down the line. It's crucial to conduct a thorough reconciliation of GST credits, credit notes, sales reported in returns, and to compare these with financial records and the auto-populated GSTR 2A/2B for past transactions.

"For the future, taxpayers are advised to complete these activities promptly rather than deferring until the end of the 3-year period," said Saurabh Agarwal, Tax Partner at EY India.

"This advisory by GSTN shall impact those taxpayers who had not filed their GST returns for the past periods due to oversight, lack of documentation, or suspension of registration. The taxpayers shall compile or reconcile requisite information to prepare the GST returns and file the returns within three years from the respective return due date.

The law mandates taxpayers to file the returns within three years from the due date, the current advisory seeks to implement the provisions as part of the GSTN portal by restricting the access of return filing after expiry of 3 years," Karthik Mani, Partner in Indirect Tax at BDO India. (With PTI Inputs)