Advisory to file pending returns before expiry of three years

Advisory to file pending returns before expiry of three years

The advisory you’ve referenced pertains to a significant change introduced by the Finance Act, 2023 (8 of 2023), effective from October 1, 2023, as notified by Notification No. 28/2023 – Central Tax dated July 31, 2023. This change imposes a three-year time limit for filing certain GST returns, after which taxpayers will be barred from filing them. The restriction will be enforced on the GST portal starting from the October 2025 tax period.

Below is a detailed explanation of the advisory, its implications, and what taxpayers need to do.

Key Points of the Advisory

1. Three-Year Time Limit for Filing GST Returns:

• As per the Finance Act, 2023, taxpayers cannot file specific GST returns after three years from the due date of furnishing those returns.
• This restriction applies to returns under the following sections of the CGST Act:
  • Section 37: Outward Supplies (e.g., GSTR-1, GSTR-1A, Invoice Furnishing Facility (IFF)).
  • Section 39: Payment of Tax Liability (e.g., GSTR-3B, GSTR-4, GSTR-5, GSTR-5A).
  • Section 44: Annual Return (e.g., GSTR-9, GSTR-9C).
  • Section 52: Tax Collected at Source (e.g., GSTR-8).
  • Other applicable returns: GSTR-6 (for Input Service Distributors) and GSTR-7 (for TDS deductors).

1. Implementation on GST Portal:

• The three-year filing restriction will be enforced on the GST portal starting from the October 2025 tax period (effectively from November 1, 2025).
• Any return for which the due date was three years or more prior to October 2025 and remains unfiled will be barred from filing.

1. Affected GST Returns:
   The advisory lists the specific GST forms and the periods that will be barred from filing as of November 1, 2025: GST Form Barred Period (w.e.f. November 1, 2025) GSTR-1/IFF September 2022 and earlier GSTR-1Q July–September 2022 and earlier GSTR-3B/M September 2022 and earlier GSTR-3BQ July–September 2022 and earlier GSTR-4 Financial Year 2021-22 and earlier GSTR-5 September 2022 and earlier GSTR-6 September 2022 and earlier GSTR-7 September 2022 and earlier GSTR-8 September 2022 and earlier GSTR-9/9C Financial Year 2020-21 and earlier Explanation of Forms:

• GSTR-1/IFF: Details of outward supplies (monthly or quarterly).
• GSTR-3B: Summary return for tax liability and ITC (monthly or quarterly).
• GSTR-4: Annual return for composition scheme taxpayers.
• GSTR-5: Return for non-resident taxable persons.
• GSTR-5A: Return for OIDAR (Online Information and Database Access or Retrieval) service providers.
• GSTR-6: Return for Input Service Distributors.
• GSTR-7: Return for Tax Deducted at Source (TDS).
• GSTR-8: Return for Tax Collected at Source (TCS) by e-commerce operators.
• GSTR-9/9C: Annual return and reconciliation statement for regular taxpayers.

1. Advisory Issued by GSTN:

• An earlier advisory was issued on October 29, 2024, to inform taxpayers about this restriction.
• The current advisory serves as a reminder to reconcile records and file pending returns before the deadline.

What Does This Mean for Taxpayers?

1. Time-Bound Filing:

• Starting November 1, 2025, taxpayers will no longer be able to file GST returns for periods where the due date was three years or more prior to October 2025.
• For example:
  • For GSTR-1 (monthly), the due date for September 2022 was typically October 11, 2022. Three years from that date is October 11, 2025. Thus, GSTR-1 for September 2022 and earlier will be barred from filing as of November 1, 2025.
  • For GSTR-9/9C, the annual return for FY 2020-21 (due by December 31, 2021) will be barred as its due date is more than three years before November 2025.

1. Consequences of Not Filing:

• Compliance Issues: Failure to file these returns within the three-year window may lead to penalties, interest, or notices from tax authorities.
• Loss of ITC: For returns like GSTR-3B, not filing within the time limit may prevent taxpayers from claiming Input Tax Credit (ITC) for those periods.
• Inability to Correct Records: Taxpayers will lose the ability to report outward supplies (GSTR-1) or reconcile annual returns (GSTR-9/9C), which could lead to discrepancies with suppliers or recipients.
• Legal and Financial Risks: Non-compliance may trigger audits or scrutiny by GST authorities.

1. Urgency to Act:

• The advisory urges taxpayers to reconcile their records and file any pending returns for the periods mentioned above as soon as possible to avoid being barred after November 1, 2025.

Illustration with Examples

To clarify, let’s break down a few examples from the table:

• GSTR-1 (Monthly) for September 2022:
• Due date: October 11, 2022 (typically the 11th of the following month).
• Three-year limit: October 11, 2025.
• If not filed by October 31, 2025, it will be barred from filing starting November 1, 2025.
• GSTR-9/9C for FY 2020-21:
• Due date: December 31, 2021 (for annual returns).
• Three-year limit: December 31, 2024.
• Since this date has already passed by October 2025, GSTR-9/9C for FY 2020-21 will be barred from filing as of November 1, 2025, if not already filed.
• GSTR-4 for FY 2021-22:
• Due date: April 30, 2022 (for composition taxpayers).
• Three-year limit: April 30, 2025.
• If not filed by October 31, 2025, it will be barred from filing starting November 1, 2025.

Action Points for Taxpayers

1. Reconcile Records:

• Review your GST records for the periods listed in the table (e.g., September 2022 or earlier for monthly returns, FY 2020-21 for GSTR-9/9C).
• Check for any unfiled or pending returns, including GSTR-1, GSTR-3B, GSTR-9, etc.

1. File Pending Returns:

• Prioritize filing any pending returns before October 31, 2025, to avoid the restriction starting November 1, 2025.
• Use the GST portal to submit returns like GSTR-1, GSTR-3B, or GSTR-9/9C for the barred periods.

1. Verify ITC and Liabilities:

• Ensure that ITC claimed in GSTR-3B aligns with GSTR-2A/2B and supplier records to avoid discrepancies.
• Reconcile outward supplies (GSTR-1) with books of accounts to prevent mismatches.

1. Seek Professional Help:

• If you have multiple pending returns or complex reconciliation issues, consult a GST practitioner or chartered accountant to ensure compliance before the deadline.

1. Monitor GST Portal:

• Keep an eye on the GST portal for any updates or tools to assist with filing pending returns.
• Check for notifications or advisories from GSTN for additional guidance.

Why This Change Matters

• Streamlining Compliance: The three-year limit ensures that taxpayers file returns in a timely manner, reducing the backlog of unfiled returns and improving GST system efficiency.
• Preventing Fraud: Limiting the filing window helps curb misuse or retrospective corrections that could affect tax revenue.
• Encouraging Timely Action: The deadline pushes taxpayers to stay current with their GST obligations, avoiding last-minute rushes or penalties.

Connection to the Invoice Management System (IMS) Advisory

The advisory on GST return filing restrictions aligns with the earlier advisory on IMS changes (dated September 23, 2025). Both aim to streamline GST compliance:

• The IMS advisory focuses on simplifying invoice management, ITC declarations, and record-keeping (e.g., keeping records pending, declaring ITC reversals).
• The GST return filing advisory ensures taxpayers file returns within a defined period, complementing the IMS changes by encouraging timely action on invoices and returns.

For example:

• If a taxpayer keeps a credit note pending in the IMS (as allowed under the IMS advisory), they must ensure that related returns (e.g., GSTR-1 or GSTR-3B) are filed within the three-year limit to avoid being barred.
• The IMS’s remarks feature can help taxpayers and suppliers resolve discrepancies, ensuring accurate returns before the filing deadline.

Conclusion

The three-year restriction on filing GST returns, effective from November 1, 2025, is a critical compliance deadline. Taxpayers must act urgently to file any pending returns for periods like September 2022 (for monthly returns), July–September 2022 (for quarterly returns), or FY 2020-21 (for annual returns) before they are barred. Reconciling records, verifying ITC, and ensuring timely filings are essential to avoid penalties and compliance issues.

Source

Also Read: Recommendations of the 56th Meeting of the GST Council – CA Cult

CA Cult YouTube: Calculation of Income Tax FY 2024-25 | Old vs New Regime | For Salaried Employees

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