Action against taxpayers fails to furnish GSTR-3B within Due Date

Standard Operating Procedure to be followed in case of non-filers of returns includes best judgement assessment by proper officer for nonfillnig of GSTR 3B with in due dates.

Every taxpayer is liable to make payment of Goods and Service Tax (“GST”), alongwith filing of return in form GSTR-3B, on monthly basis by 20th of the following Month. If taxpayer fails to furnish GSTR-3B by such due date then he is mandatorily required to pay late fee of INR 20/INR 50 per day. GST Portal will auto-populate the penalty for late filing in GSTR-3B of following month.

Further, if taxpayer fails to furnish GSTR-3B for continuous period of 2 months then jurisdictional Assessing Officer may cancel GST registration of such taxpayer after following principle of Natural Justice.

Despite of stringent provisions, Department is still adopting various measures to regularize the filing of GST return. Vide Circular 129/48/2019-GST dated 24th December, 2019, department has prescribed the “Standard Operating Procedure to be followed in case of non-filers of returns”.

Relevant Provisions of GST Law:

  • Section 39: Liability to furnish GSTR-3B on monthly basis
  • Section  44: Liability to furnish Annual Return in form GSTR-9 and reconciliation statement in form GSTR-9C
  • Section 45: Liability to furnish Final Return
  • Section 46 read with Rule 68: Issuance of Notice to return defaulters in form GSTR-3A to persons to fails to furnish return u/s 39 or 44 or 45
  • Section 62: Assessment of Non-filers of return

Procedure to be followed in case of Non-filer of returns

Step 1: A system generated message would be sent to all the registered persons 3 days before the due date to nudge them about filing of the return for the tax period by the due date.

Step 2: After expiry of due date of furnishing GSTR-3B, a system generated mail will be sent to all defaulters informing them about their failure to furnish return by due date. Copy of the same will be sent to authorized personnel and proprietor/Partner/Karta/Director.

Step 3: 5 days after expiry of due date to furnish GSTR-3B, notice under section 46 of CGST Act read with Rule 68 in form GSTR-3A will be sent to persons who fails to furnish GSTR-3B. Such notice will require him to furnish such return within 15 days.

Step 4 If defaulter fails to furnish GSTR-3B within 15 days of issuance of GSTR-3A, then proper officer may proceed to assess tax liability of such person under section 62 of CGST Act (i.e., to the best of his judgment). While assessing tax liability, proper officer will take into account all material available to him* and would issue an order in form GST ASMT-13. Summary of such order will be uploaded in form GST DRC-07.

*Details of sales outward furnished in form GSTR-1, details of inward supply auto-populated in form GSTR-2A, information available through e-waybill portal or information collected through any other source such as inspection

Step 5: If defaulter furnishes return in form GSTR-3B within 30 days of service of order in form GST ASMT-13 then such order shall be deemed to be withdrawn. However, in case of failure, proper officer may initiate proceedings under section 78 and recovery under section 79 of the CGST Act.

Step 6: In deserving cases, based on the facts of the case, the Commissioner may opt for provisional attachment under section 83 of the CGST Act before issuance of FORM GST ASMT-13 to protect revenue.

Step 7: Proper officer would initiate action under section 29(2) CGST Act for cancellation of registration if registered person fails to furnish GSTR-3B for consecutive period of 6 months.

Flow Chart for GST Return Defaulters

Read More Important Points to be considered for GSTR-3B return under GST.

DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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