Background:
The CBIC vide Notification No. 94/2020-Central Tax dated December 22, 2020, inter alia, amended Rule 59 of the CGST Rules, 2017 (“CGST Rules”) dealing with “Form and manner of furnishing details of outward supplies”, to insert sub-rule (5) after Rule 59(4), blocking GSTR-1 in case of non-filing of GSTR-3B, in following manner:
- If the registered person fails to furnish the return in GSTR-3B for preceding two months, he would not be allowed to furnish the details of outward supplies of goods or services or both in GSTR-1.
Previously, non-filing of GSTR-3B resulted in blocking of E-way Bill facility but from now, on the same would also result in blocking of the GSTR-1 of the registered person.
- Identically, for quarterly return filers, if the registered person fails to file GSTR-3B for the preceding tax period, he would not be permitted to file GSTR-1 or use invoice furnishing facility (“IFF”) for subsequent quarter.
- A registered person who is restricted from using the amount available in electronic credit ledger to discharge his liability towards tax in excess of 99% of such tax liability as per newly inserted Rule 86B of the CGST Rules, would also not be permitted to file GSTR-1 or use IFF, if he has not filed GSTR-3B for the preceding tax period.
But we pointed out in our last newsletter on above amendment, that Rule 59 of the CGST Rules is already substituted vide Notification No. 82/2020-Central Tax dated November 10, 2020, which is going to be effective from January 1, 2021, sub-rule (5) of which reads as under:
“(5) The details of outward supplies of goods or services or both furnished using the IFF shall include the –
(a) invoice wise details of inter-State and intra-State supplies made to the registered persons;
(b) debit and credit notes, if any, issued during the month for such invoices issued previously.”
Therefore, there seemed to be an apparent mistake and it was not clear that what will be correct provisions under Rule 59(5) of the CGST Rules, w.e.f. January 1, 2021. Further, with substituted Rule 59 of the CGST Rules taking effect from January 1, 2021, above insertions of December 22, 2020 notification would become otiose.
New Notification issued to remove the anomaly:
The CBIC has now issued Notification No. 1/2021-Central Tax dated January 1, 2021 to correct the above confusion w.e.f. January 1, 2021. Accordingly, the insertions earlier made vide Notification No. 94/2020-Central Tax dated December 22, 2020, as sub-rule (5) to Rule 59 of the CGST Rules is now inserted as sub-rule (6) to Rule 59 ibid.
Therefore, Rule 59 of the CGST Rules, w.e.f. January 1, 2021 reads as under:
“59. Form and manner of furnishing details of outward supplies.
(1) Every registered person, other than a person referred to in section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), required to furnish the details of outward supplies of goods or services or both under section 37, shall furnish such details in FORM GSTR-1 for the month or the quarter, as the case may be, electronically through the common portal, either directly or through a Facilitation Centre as may be notified by the Commissioner.
(2) The registered persons required to furnish return for every quarter under proviso to sub-section (1) of section 39 may furnish the details of such outward supplies of goods or services or both to a registered person, as he may consider necessary, for the first and second months of a quarter, up to a cumulative value of fifty lakh rupees in each of the months,- using invoice furnishing facility (hereafter in this notification referred to as the “IFF”) electronically on the common portal, duly authenticated in the manner prescribed under rule 26, from the 1st day of the month succeeding such month till the 13th day of the said month.
(3) The details of outward supplies furnished using the IFF, for the first and second months of a quarter, shall not be furnished in FORM GSTR-1 for the said quarter.
(4) The details of outward supplies of goods or services or both furnished in FORM GSTR-1 shall include the–
(a) invoice wise details of all –
(i) inter-State and intra-State supplies made to the registered persons; and
(ii) inter-State supplies with invoice value more than two and a half lakh rupees made to the unregistered persons;
(b) consolidated details of all –
(i) intra-State supplies made to unregistered persons for each rate of tax; and
(ii) State wise inter-State supplies with invoice value upto two and a half lakh rupees made to unregistered persons for each rate of tax;
(c) debit and credit notes, if any, issued during the month for invoices issued previously.
(5) The details of outward supplies of goods or services or both furnished using the IFF shall include the –
(a) invoice wise details of inter-State and intra-State supplies made to the registered persons;
(b) debit and credit notes, if any, issued during the month for such invoices issued previously.
(6) Notwithstanding anything contained in this rule, –
(a) a registered person shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1, if he has not furnished the return in FORM GSTR-3B for preceding two months;
(b) a registered person, required to furnish return for every quarter under the proviso to sub-section (1) of section 39, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3B for preceding tax period;
(c) a registered person, who is restricted from using the amount available in electronic credit ledger to discharge his liability towards tax in excess of ninety-nine per cent. of such tax liability under rule 86B, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3B for preceding tax period.”
The Notification can be accessed at: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-01-central-tax-english-2021.pdf