To ensure that taxpayers comply with the GST laws, the Central Board of Indirect Taxes and Customs (CBIC) amends the Central Goods and Services Tax Rules, 2017 as and when required. On 1 January 2021, the CBIC issued Notification No. 01/2021 – Central Tax to notify that taxpayers will not be able to furnish their FORM GSTR-1 if they have not furnished the required FORM GSTR-3B for preceding two months.
As per the above-mentioned notification:
As on today, the GSTR-1 filing will be unblocked as soon as the relevant GSTR-3B is filed. This new amendment will help the Government in tracing non-filers which will force the defaulters to be GST compliant.
When a Taxpayer does not file his/her GSTR-1, the purchaser/counterparty will not be able to claim the eligible Input Tax Credit (ITC) on the purchases because GST returns are inter-linked. When invoices are not uploaded in the suppliers GSTR-1, the details will not reflect in the purchasers GSTR-2A and GSTR-2B. This will lead to inconveniences to the purchaser as he/she will be denied the eligible credit. This can affect business relations and cycle adversely.
GSTR-1 is a monthly or quarterly statement that should be filed by every GST registered taxpayer. This form contains details of all outward supplies (i.e. the sale of goods or provision of services).
In simple words, GSTR-3B is a consolidated summary return. This return contains details of inward and outward supplies. Every GST registered Taxpayer (subject to exceptions) must file FORM GSTR-3B.