Blog Details

The Goods and Services Tax Network (GSTN) has announced a crucial update that impacts all registered taxpayers in India. Effective from early 2025, the GST portal will impose a time limit for filing specific GST returns, disallowing submissions more than three years past their original due date. This change aims to improve compliance, minimize tax evasion, and enhance regulatory efficiency.

Key Highlights of the Advisory

• Three-Year Time Limit for GST Returns: From early 2025, taxpayers will no longer be able to file certain GST returns if they are more than three years overdue.
• Objective: This new measure is intended to ensure timely compliance, enhance tax governance, and improve data accuracy.

Consequences of Missing the Deadline

If taxpayers fail to file their GST returns within the specified three-year limit, they may face serious consequences:

• Default Status: Taxpayers who do not file their returns on time may be considered defaulters under GST law, leading to potential cancellation of their GST registration.
• Best Judgement Assessment: The GST department may initiate a "best judgement assessment" to estimate tax liabilities for time-barred returns.
• Restricted Court Relief: High Courts may have limited capacity to provide retrospective relief once the time limit is enforced.

History of Relevant GST Amendments:

Steps to Ensure Compliance

To stay compliant and avoid penalties, taxpayers should take the following actions:

• Compile and Reconcile Information: Gather all necessary records and prepare GST returns within the three-year time limit. Reconcile books of accounts with Form GSTR-2B to verify input tax credits.
• Audit Filing History: Conduct an internal audit of past GST filings to identify and address any outstanding returns.
• Timely Filing of Forms:
  • GSTR-1: File monthly or quarterly to report all outward supplies.
  • GSTR-3B: File this summary return to determine and pay the tax liability.
  • GSTR-9: Ensure annual returns are filed, summarizing all the financial year's tax details.

Final Thoughts

With the new three-year filing deadline approaching, taxpayers should act now to avoid complications. By staying proactive, maintaining accurate records, and ensuring that all overdue filings are promptly addressed, businesses can avoid penalties and ensure compliance with the upcoming GST regulations. Don’t wait until it’s too late—review your GST filing history and take corrective action where needed.

This new rule is an opportunity for taxpayers to keep their compliance status in check and prevent unnecessary legal and financial consequences. Stay ahead by being vigilant and keeping your filings up to date.