This means that if you delay filing monthly or annual returns , you will have only three years. This rule will come into effect on the GST portal from July 2025. However, experts have expressed concern over this rule.

This change has been made under the Finance Act, 2023. Its purpose is that people file returns on time and old dues can be eliminated. This rule will apply to many types of returns. These include GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8 and GSTR-9. These returns include sales information, tax payment and annual information.

Advice to tax payers

GSTN’s information said, “The deadline for filing returns will expire after three years. This rule will be applicable on the GST portal from July 2025.” Taxpayers have been advised to correct their records and file all the pending returns immediately. If you do not do this, you will never be able to file returns again.

Experts expressed concern

Experts have expressed concern over this rule. Tax experts say that this may cause problems for those who have not been able to file returns due to legal matters, technical difficulties or delays caused by mistakes.

AMRG & Associates Senior Partner Rajat Mohan said, ‘This step will improve the system and will put a check on those who have not been filing returns for a long time. But this will cause great harm to those who have not been able to file returns due to legal matters, system glitches or mistakes.’

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The Government of India has made a lot of changes in the rules of Goods and Services Tax. Under this, the Input Service Distributor System is going to be implemented from April 1, 2025. The main objective of this system is to ensure proper distribution of tax revenue among the states. With its help, state governments will collect appropriate amount of tax on shared services being provided at one place.

The Central GST Act has been amended under the Finance Act of 2024 to implement the ISD mechanism. This mechanism facilitates businesses that operate in multiple states. Under this, businesses can centralize invoices for common input services at one of their headquarters. This enables equitable distribution of input tax credit among branches that use shared services.

Benefit of input tax credit

Input tax credit is the tax that businesses pay on their purchases. It can be deducted from the output tax, thereby reducing the total GST liability of the business. Under the new rules, it will be mandatory to use the ISD system so that ITC is distributed correctly.

What are the new rules

Earlier, businessmen had two options to allocate common ITC to their other GST registrations. These two options were ISD mechanism or cross-charge method, but now from April 1, 2025, ITC will not be given for the recipient location if ISD is not used. If ITC is wrongly distributed, the tax authority recovers the amount along with interest. Along with this, a penalty will also be imposed for irregular distribution, which will be more than the amount of ITC or Rs 10,000.

GST System

It is believed that this change is another big step towards making the GST system more organized. The ISD system will not only distribute tax revenue among the states, but will also help businesses manage their tax liabilities better. This step will prove to be very good for preventing tax evasion and bringing transparency in the system.

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ITC returned with interest

Sources said the law committee comprising tax officers from the Center and states is of the view that where the ITC claimed in GSTR-3B return exceeds a certain threshold from the amount reported in GSTR-B generated, the registered person should be liable to pay tax through the portal. This information should be given through Along with this, he should be directed to explain the reason for this difference or return the excess ITC with interest.

On which amount the provision will be applicable

The committee has suggested that if the difference is more than 20 percent and the amount is more than Rs 25 lakh, then this provision should be applicable.

The meeting will be held on July 11.

A final decision can be taken on the recommendations of the committee in the 50th meeting of the GST Council to be held on July 11. Currently, businesses use the tax paid by their suppliers to settle their GST liability in GSTR-3B.

GST Network generates Form GSTR-2B, which is a generated document. This shows the availability or non-availability of ITC in each document submitted by the suppliers. Sources said the Law Committee is of the view that a registered person should not be allowed to file monthly statement of outward supplies or GSTR-1 unless he has satisfied the tax authority about the discrepancy or has not refunded the excess ITC claimed.

Fake GST to be stopped

GST authorities last month took steps to check similar tax evasion in cases of difference in tax liability declared in GSTR-1 and tax paid in GSTR-3B. The purpose of this step is to curb the cases of fake invoices. Fraudsters usually use this route to avail ITC wrongfully without actual supply of goods or services.

2-month campaign launched

GST officials have launched a two-month special campaign to detect fake registrations under GST. Such registrations are done for the purpose of issuing fake bills or invoices and defrauding the government.

1.01 lakh crore GST evasion

The Directorate General of GST Intelligence (DGGI) has detected GST evasion of more than Rs 1.01 lakh crore in the financial year 2022-23, which is double the figure compared to the previous year. Of these, 14,000 cases have been registered by the authorities.

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