What is the latest amendment regarding the filing of returns?

The Goods and Services Tax (GST) system in India has undergone several amendments since its implementation in July 2017. These amendments have impacted various aspects of GST compliance, including the filing of returns. As of 2023, there have been significant changes to make the return filing process more streamlined and taxpayer-friendly.

1. Recent Amendments to GST Return Filing (2023)

A. Simplification of GST Return Filing:

• The GST Council has introduced amendments aimed at simplifying the return filing process, especially for small businesses and taxpayers with a lower turnover.

B. Introduction of GST Returns under GSTR-1, GSTR-3B, and GSTR-9:

• GSTR-1 (Outward Supply Return): This return provides details of all outward supplies made by the taxpayer. Amendments have been made to allow auto-population of GSTR-1 details from GSTR-3B to reduce manual entry.
• GSTR-3B (Monthly Summary Return): This return is a summary of outward and inward supplies, including the payment of tax. It is one of the most important returns and has been simplified in recent amendments by reducing the number of fields.
• GSTR-9 (Annual Return): This return has been revised for taxpayers with annual turnover exceeding ₹2 crore. For small taxpayers, the requirement of filing GSTR-9 has been waived or simplified.

**C. Amendments to GSTR-3B and GSTR-1 Filing Dates:

• In the GST Council Meeting in December 2021, the due date for filing GSTR-1 and GSTR-3B returns was extended to encourage timely compliance. The due dates for GSTR-3B filing were adjusted based on turnover slabs for different types of taxpayers.

**D. Matching of Invoices (GST ITC Claim):

• In 2022, the GST Council made amendments to enforce the matching mechanism for Input Tax Credit (ITC). This mandates that taxpayers can only claim ITC if their suppliers have uploaded their invoices or provided the necessary details in the GSTR-1 return. This move aims to reduce fraud and improve tax compliance.

**E. GST Annual Returns (GSTR-9) and Reconciliation Statement (GSTR-9C):

• The filing of GSTR-9 (annual return) has become optional for taxpayers with a turnover of up to ₹2 crore. For taxpayers above this threshold, GSTR-9 needs to be filed along with a reconciliation statement (GSTR-9C).
• The amendment in 2022 allowed for the non-requirement of GSTR-9C (reconciliation statement) for businesses with turnover below ₹5 crore.

**F. Late Fee Waiver for Small Businesses:

• The late fee for delayed filing of GST returns was waived or reduced for small businesses and those with a turnover of ₹5 crore or less. This was part of the GST Council’s initiative to make it easier for businesses to comply with tax filing requirements.

2. Relevant Constitutional Provisions and Acts

The Constitution of India and the GST Act, 2017 provide the framework for the filing of returns and the overall tax structure. Relevant constitutional provisions and acts include:

A. Article 246A:

• Empowerment to legislate on GST: This provision empowers both the Central Government and State Governments to legislate on GST-related matters, including the filing of returns, as part of the Concurrent List (List III) under the Seventh Schedule of the Constitution.

B. Central Goods and Services Tax Act, 2017 (CGST Act):

• Section 39: This section deals with the furnishing of returns under GST. It defines the types of returns to be filed, such as GSTR-1, GSTR-3B, and GSTR-9, and prescribes the filing frequency (monthly, quarterly, and annually).
• Section 44: This section defines the requirement for annual return (GSTR-9) and reconciliation statement (GSTR-9C) for taxpayers with turnover exceeding a specific threshold.
• Section 47: This section deals with late fees for delayed filing of returns under GST.
• Section 56: This section outlines the time limits for filing returns and the consequences of not filing within the prescribed timelines.

C. Integrated Goods and Services Tax Act, 2017 (IGST Act):

• This Act governs the cross-border supply of goods and services within India and between India and foreign countries, as well as the filing of related returns for interstate transactions under GST.

3. Landmark Cases Related to GST Return Filing

Several judicial pronouncements have shaped the way GST returns are filed, the implementation of rules, and the interpretation of various provisions. Some of the landmark cases include:

A. Union of India v. M/s. VKC Footsteps India Pvt. Ltd. (2021)

• Issue: This case dealt with the eligibility of ITC claims and whether a taxpayer could be penalized for failing to match invoices in GSTR-1 and GSTR-3B, which is crucial for claiming input tax credit.
• Judgment: The Supreme Court held that the matching of invoices is essential for the validity of ITC claims, even if the mismatch is due to technical errors or unintentional mistakes. The ruling emphasized the importance of accurate return filing to maintain the integrity of the tax system.

B. Mohit Minerals Pvt. Ltd. v. Union of India (2021)

• Issue: This case raised the question of whether Input Tax Credit (ITC) could be denied when the taxpayer’s vendor fails to file their GSTR-1.
• Judgment: The Supreme Court ruled that the denial of ITC on account of the supplier not uploading the GSTR-1 is justified, as per the GST return matching system. This reinforced the necessity of compliance by both suppliers and recipients to claim valid ITC.

C. Sunil Jain v. Union of India (2020)

• Issue: The case revolved around the issue of late fees for non-filing of GST returns. It challenged the imposition of penalties and late fees on taxpayers who could not file returns due to technical glitches.
• Judgment: The Court directed the GST authorities to not impose late fees or penalties in cases where the delay in filing returns was due to genuine technical difficulties or system errors.

D. State of Maharashtra v. M/s. Parle Agro Pvt. Ltd. (2021)

Judgment: The Court ruled that while penalties for delays in filing GST returns are applicable, they should not be excessive and should consider the taxpayer’s genuine difficulties in filing returns. The ruling also led to discussions on relaxations in penalty provisions for small businesses.

Issue: This case dealt with the non-payment of taxes and filing of returns by a taxpayer, questioning the imposition of penalties for delays in filing GST returns.