There is going to be a big change in the rules for filing Goods and Services Tax (GST) returns from July 1, 2025. According to the GST Network (GSTN), taxpayers will no longer be able to file GST returns older than three years. This amendment has been made under the Finance Act, 2023, which aims to make the tax system more disciplined and transparent.
Which GST Return Forms Are Affected?
This change will impact several types of GST returns, including:
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STR-1 (Sales Data)
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GSTR-3B (Monthly Tax Summary)
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GSTR-4 (Composition Scheme)
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GSTR-5 & 5A (Non-Resident Taxpayers)
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GSTR-6 (ISD Returns)
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GSTR-7 (TDS Details)
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GSTR-8 (E-commerce Tax Collection)
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GSTR-9 (Annual Return)
Why Is This Rule Being Introduced?
The government aims to get taxpayers to file returns on time to prevent pending dues and invalid ITC claims in the system. The move is also seen as an attempt to curb tax evasion. GSTN has advised taxpayers to file their pending returns as soon as possible, otherwise they will not be able to be filed in future.
Concerns Raised by Tax Experts
However, tax experts and the business community have expressed their concern over this change. According to Rajat Mohan, Senior Partner, AMRG Associates, “This step will improve the system and curb 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.” He said that there is no system to help in such cases right now. Due to this, people will not be able to get input tax credit (ITC) and they will suffer financial loss.
1. What is the new GST return filing rule effective from July 1, 2025?
From July 1, 2025, taxpayers will no longer be able to file GST returns that are more than three years old. This change is part of the Finance Act, 2023, aimed at improving compliance and transparency in the tax system.
2. Which GST return forms are affected by this 3-year limit rule?
The new rule applies to multiple GST return forms including:
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GSTR-1
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GSTR-3B
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GSTR-4
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GSTR-5 & GSTR-5A
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GSTR-6
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GSTR-7
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GSTR-8
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GSTR-9
3. Why has the government implemented this GST return filing restriction?
The goal is to ensure timely filing, reduce the number of pending returns, prevent invalid ITC claims, and curb tax evasion. This move will help the system become more transparent and reliable.
4. Will I be able to claim Input Tax Credit (ITC) on old returns after July 2025?
No, once the 3-year window is closed, you cannot file old returns or claim ITC on them. This can lead to a permanent loss of credit, affecting your finances.
5. What should taxpayers do before July 1, 2025?
Taxpayers should urgently file any pending GST returns before the July 1, 2025, deadline to avoid losing ITC and facing penalties. The GSTN has advised not to delay further.
6. Will this rule affect small businesses and startups?
Yes. Experts say small businesses and those stuck in legal disputes or system errors may suffer, as they might not be able to file old returns or recover lost credit without any relief mechanism.
7. Is this change applicable to both monthly and annual returns?
Yes. The rule applies to monthly, quarterly, and annual GST returns, including GSTR-3B and GSTR-9.
8. Can this 3-year GST return deadline be extended in special cases?
As of now, there is no official provision for extensions or exceptions. Taxpayers are encouraged to comply within the timeline to avoid permanent issues.
