Blocked GSTR-1? File GSTR-3B Today!

The blocking of GSTR-1 filing has been announced by amending clause (a) of Rule 59(6) of the CGST Rules. The amendment was published by the CBIC in Notification No. 35/2021 – Central Tax on September 24, 2021. In this blog, we will talk about every aspect related to the same and how you can unblock the GSTR-1 filing facility.

Impact of GSTR-3B on GSTR-1

According to Rule 59(6) of the CGST Rules, if a registered taxpayer fails to file a GSTR-3B return for the previous month, he would not be unable to file information about the outward supply of goods or/and services in GSTR-1.

Non-filing of GSTR-3B resulted in the generation of e-way bills being blocked, as per previous provisions. According to Rule 59(6) of the CGST Rules, if a registered taxpayer fails to file a GSTR-3B return for the previous month, he would not be unable to file information about the outward supply of goods or/and services in GSTR-1.

However, under these laws, the e-way bill, as well as the GSTR-1 of the registered individual, would be blocked. In addition, if a taxpayer is compelled to submit GSTR-3B as a result of Rule 86B’s application and fails to do so, his GSTR-1 will be blocked.

Implementation of Clause (a) of Rule 59(6) on the GST Portal

Clause (a) of Rule 59(6) of the CGST Rules, 2017 was amended by Notification No. 35/2021 – Central Tax dated September 24, 2021. The terms “for the preceding two months” have been substituted by the words “for the preceding month” as of January 1, 2022.

This implies that beginning January 1, 2022, if a monthly filer has not filed the GSTR-3B for the previous month, the taxpayer will be unable to file the GSTR-1 for the next month until the GSTR-3B for the previous month has been filed. This feature will be available on the GST Portal soon, after which the system will verify if the previous month’s GSTR-3B is filed before filing GSTR-1 of the subsequent month.

Example to Understand the Applicability of Clause (a) of Rule 59(6)

The monthly GSTR-3B for November 2021 has not been filed by a taxpayer. The taxpayer now attempts to submit GSTR-1 for December 2021 on January 10th, 2022. The system will not allow the taxpayer to file GSTR-1 for December 2021. So in this case, he/she needs to file GSTR-3B for November 2021.

Impact of Blocking of GSTR-1 on ITC

If your GSTR-1 filing facility gets blocked due to the non-filing of GSTR-3B, the counterparty will not be able to claim ITC on the purchases made. As you would not be able to file GSTR-1, the transaction will not be reflected in the counterparty’s GSTR-2B. As a result, the ITC cannot be claimed by the beneficiary.

How to Unblock GSTR-1 Filing Facility?

The only way to unblock the GSTR-1 filing facility is by filing GSTR-3B on time. The government wants taxpayers to stay compliant under GST, thus the Government of India is amending the existing rules and regulations.

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