Union Budget 2023 proposes to restrict Maximum period for GST Return filing to 3 Years [Read Finance Bill]

The Finance Minister Nirmala Sitharaman has presented the Union Budget 2023, by the budget speech. The budget proposed minor changes to tax policies, allocation of government spending, and initiatives aimed at boosting the economy and addressing social issues. The budget is an important move for the central government in light of the impending elections.

Some changes were proposed in the budget bill, with regard to the filing of returns, which are to be introduced to the Goods and Services Tax Act, which include: –

Sections 37, 39, 44 and 52 of Central Goods and Services Tax Act, 2017 are suggested to be amended to restrict filing of returns/ statements to a maximum period of three years from the due date of filing of the relevant return / statement.

Currently, the non-filing of the Goods and Services Tax Returns, GSTR-1 and GSTR-3B for two consecutive months will result in the cancellation of the GST Registration.

Additionally, if you had missed the due date for filing of GSTR-1, according to Section 37(4) of the Central Goods and Services Tax Act, a taxpayer shall not be allowed to file GSTR-1 if a previous GSTR-1 is not filed and as per Section 39(10) a taxpayer shall not be allowed to file GSTR-3B if GSTR-1 for the same tax period is not filed.

Several genuine cases of being unable to file the said returns have been granted a second chance to file the returns and get their registrations restored after various judgements of the High Courts.

In addition to all this pain that businesses go through, the new amendment proposes to cap the timeframe for filing the GST returns, by amendment of Sections 37, 39, 44 and 52 of CGST Act, 2017.

The amendment inserts “A registered person shall not be allowed to furnish the details of outward supplies under sub-section (1) for a tax period after the expiry of a period of three years from the due date of furnishing the said details” in Section 37 of the CGST Act, resulting in taxpayers being unable to file the details of outward supplies after 3 years of due date,

“A registered person shall not be allowed to furnish a return for a tax period after the expiry of a period of three years from the due date of furnishing the said return” in Section 39, resulting in the inability to file the quarterly returns after 3 years from due date,

“A registered person shall not be allowed to furnish an annual return under sub-section (1) for a financial year after the expiry of a period of three years from the due date of furnishing the said annual return” in Section 44, resulting in the GST registered businesses being unable to file the annual returns from three years of the due date of filing and

“The operator shall not be allowed to furnish a statement under sub-section (4) after the expiry of a period of three years from the due date of furnishing the said statement” in Section 52, restraining the E-commerce operators from filing of TCS return, if the due date has passed 3 years ago.

This move has serious implications as the conduct of trade without a GST Registration is illegal and can be penalized and non-filing of returns can result in cancellation of the GST registration itself.

To Read the full text of the Finance Bill 2023 CLICK HERE

Support our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.