Complete Guide to GST Section 37: GSTR-1 Filing, Deadlines, and Compliance Explained

Section 37 of the CGST Act, 2017 governs the furnishing of outward supply details under GST and is central to ensuring compliance and enabling Input Tax Credit (ITC). It mandates all registered taxpayers, except certain categories like composition taxpayers and ISDs, to file GSTR-1 by the 10th of the following month.

Key amendments effective from October 1, 2022, and October 1, 2023, introduced major changes such as the omission of invoice matching (Section 37(2)), a shift to auto-populated GSTR-2B for ITC, mandatory sequential filing (Section 37(4)), and a three-year time limit for filing GSTR-1 (Section 37(5)). The rectification deadline was also extended to November 30 of the following financial year. Collectively, these changes simplify the compliance framework while reinforcing discipline and finality in GST reporting, making timely and accurate GSTR-1 filing crucial for smooth tax credit flow and administration.

GST Section 37: A Comprehensive Guide to Furnishing Details of Outward Supplies

Section 37 of the Central Goods and Services Tax (CGST) Act, 2017, effective from July 1, 2017, forms the bedrock of outward supply reporting under the GST regime. It mandates registered persons to furnish details of their outward supplies, a crucial step for both taxpayers and the tax administration in ensuring compliance and facilitating Input Tax Credit (ITC) flow. Over time, this section has undergone significant amendments, streamlining the process and introducing stricter compliance measures.

Section 37(1): The Foundation of GSTR-1 Filing

Sub-section (1) of Section 37 lays down the primary responsibility for furnishing details of outward supplies.

Who Must Furnish? Every registered person is required to furnish these details, with specific exceptions:

• Input Service Distributors (ISD)
• Non-resident taxable persons
• Persons paying tax under Section 10 (Composition Levy)
• Persons paying tax under Section 51 (Tax Deduction at Source – TDS)
• Persons paying tax under Section 52 (Tax Collection at Source – TCS by E-commerce operators)

Manner and Due Date: The details of outward supplies of goods or services or both, effected during a tax period, must be furnished electronically. These details must be submitted on or before the tenth day of the month succeeding the said tax period. This electronic submission is subject to such conditions and restrictions, and in such form and manner, as may be prescribed. The primary form for this purpose is FORM GSTR-1: Details of outward supplies of goods or services.

Communication to Recipient: Originally, the details furnished under Section 37(1) were to be communicated to the recipient of the said supplies within a prescribed time and manner. However, with effect from October 1, 2022, through the Finance Act, 2022, this clause was amended. The details are now to be communicated to the recipient “subject to such conditions and restrictions, within such time and in such manner as may be prescribed,” indicating a more dynamic and automated process, primarily through the auto-populated FORM GSTR-2B.

Omitted Proviso (11th to 15th Day Restriction): Prior to October 1, 2022, a first proviso in Section 37(1) disallowed registered persons from furnishing details of outward supplies during the period from the eleventh day to the fifteenth day of the month succeeding the tax period. This restriction has since been omitted, allowing for continuous filing up to the due date.

Extension of Time Limit: The Commissioner holds the power, for reasons to be recorded in writing, to extend the time limit for furnishing these details for a specified class of taxable persons via notification. Furthermore, any extension of time limit notified by the Commissioner of State Tax or Commissioner of Union Territory Tax is deemed to be notified by the Commissioner (Central Tax), ensuring uniformity.

Relevant Rules:

• Rule 59: Form and manner of furnishing details of outward supplies: This rule specifies the format and procedure for filing GSTR-1.
• Rule 61A: Manner of opting for furnishing quarterly return: This rule allows certain taxpayers to opt for quarterly filing of GSTR-1, subject to turnover limits.
• Rule 67A: Manner of furnishing of return or details of outward supplies by short messaging service facility: This rule facilitates nil GSTR-1 filing via SMS.

Section 37(2): The Omitted Matching Concept

Sub-section (2) of Section 37, which was pivotal for the original invoice matching concept, mandated every registered person who had been communicated details under sub-section (3) of section 38 (auto-drafted details of inward supplies) or details pertaining to inward supplies of Input Service Distributor under sub-section (4) of section 38, to either accept or reject the details so communicated. This had to be done on or before the seventeenth day, but not before the fifteenth day, of the month succeeding the tax period, and the details furnished by him under sub-section (1) would stand amended accordingly.

Omission and Impact: Significantly, Section 37(2) was omitted with effect from October 1, 2022, by the Finance Act, 2022. This omission marks a fundamental shift in the GST compliance mechanism, moving away from a bilateral acceptance/rejection system in GSTR-2A to a more dynamic and primarily auto-populated GSTR-2B based ITC availment. The emphasis is now largely on the recipient relying on the auto-generated GSTR-2B for claiming ITC, rather than actively accepting or rejecting individual invoices.

Section 37(3): Rectification of Errors and Omissions

This sub-section allows for the rectification of errors or omissions in the details furnished under sub-section (1).

Process of Rectification: Any registered person who has furnished the details under sub-section (1) for any tax period shall, upon discovery of any error or omission, rectify such error or omission in such manner as may be prescribed. If the error or omission leads to a short payment of tax, the taxpayer must pay the tax and interest, if any, in the return to be furnished for that tax period.

Impact of Omission of “Unmatched” Clause: Prior to October 1, 2022, the sub-section applied to details that “have remained unmatched under section 42 or section 43.” This clause has since been omitted, meaning that rectification is applicable to any error or omission discovered, irrespective of whether it was subject to matching previously.

Time Limit for Rectification: No rectification of error or omission in respect of the details furnished under sub-section (1) is allowed after the thirtieth day of November following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier. This date was substituted for “furnishing of the return under section 39 for the month of September” with effect from October 1, 2022.

Specific Relaxation for 2018-19: A further proviso provided a specific relaxation for the financial year 2018-19. Rectification of error or omission for details furnished under sub-section (1) was allowed after furnishing the return under section 39 for the month of September 2018, till the due date for furnishing the details under sub-section (1) for the month of March 2019 or for the quarter January 2019 to March 2019. This was introduced via Order No. 02/2018-Central Tax, S.O. 6428(E) dated December 31, 2018.

Section 37(4): Sequential Filing Mandate (New Insertion)

Sub-section (4) of Section 37 was newly inserted with effect from October 1, 2022, by the Finance Act, 2022.

The Restriction: This sub-section introduces a crucial restriction: a registered person is not allowed to furnish the details of outward supplies under sub-section (1) for a tax period, if the details of outward supplies for any of the previous tax periods have not been furnished by him. This mandates sequential filing of GSTR-1, ensuring that taxpayers clear all previous GSTR-1 filing obligations before filing for the current period.

Power of Relaxation: The Government, on the recommendations of the Council, may by notification, subject to specified conditions and restrictions, allow a registered person or a class of registered persons to furnish the details of outward supplies under sub-section (1), even if he has not furnished the details of outward supplies for one or more previous tax periods. This provides a mechanism for relief in exceptional circumstances.

Section 37(5): Overall Time Limit for Furnishing Details (New Insertion)

Sub-section (5) was inserted in Section 37 by the Finance Act, 2023, with effect from October 1, 2023.

The Time Limit: This sub-section imposes an overarching time limit for furnishing the details of outward supplies under sub-section (1). A registered person is not allowed to furnish the details of outward supplies under sub-section (1) for a tax period after the expiry of a period of three years from the due date of furnishing the said details. This provides a definitive cut-off for GSTR-1 filing.

Power of Relaxation: Similar to Section 37(4), the Government, on the recommendations of the Council, may by notification, subject to specified conditions and restrictions, allow a registered person or a class of registered persons to furnish the details of outward supplies for a tax period under sub-section (1), even after the expiry of the said period of three years from the due date of furnishing the said details.

Explanation: What Constitutes “Details of Outward Supplies”?

For the purposes of Chapter IX of the CGST Act (which includes Section 37), the expression “details of outward supplies” comprehensively includes details of:

• Invoices
• Debit Notes
• Credit Notes
• Revised Invoices issued in relation to outward supplies made during any tax period. This clarifies the scope of transactions that must be reported in GSTR-1.

Overall Impact of Amendments and Key Takeaways

The amendments to Section 37, particularly those effective from October 1, 2022, and October 1, 2023, represent a significant shift in GST compliance.

• The omission of Section 37(2) and the associated matching provisions (Sections 42 and 43) has shifted the onus for ITC availment more heavily onto the recipient, who must now rely on the auto-generated GSTR-2B for eligibility. This simplifies the compliance process by removing the need for active acceptance/rejection but places greater emphasis on supplier compliance.
• The insertion of Section 37(4) enforces sequential filing of GSTR-1, preventing taxpayers from skipping periods. This aims to improve compliance discipline and reduce instances of missing filings.
• The insertion of Section 37(5) introduces a definitive three-year limitation period for furnishing GSTR-1, providing clarity and finality to the filing process.
• The change in the rectification deadline to November 30th provides taxpayers with more time to correct errors, aligning it with the general timeline for annual return filings.

In essence, Section 37, with its continuous evolution, underscores the importance of accurate, timely, and sequential furnishing of outward supply details, which is fundamental for a seamless flow of credit and effective tax administration under GST. Compliance with GSTR-1 is not merely a formality but a critical component of the entire GST ecosystem.

FAQs on Section 37 of CGST Act

What is Section 37 of the CGST Act about?
Section 37 mandates the furnishing of details of outward supplies of goods or services by registered persons through FORM GSTR-1.

Who is required to file details under Section 37?
Every registered person, except ISDs, non-resident taxable persons, composition taxpayers, and persons liable to deduct or collect tax under Sections 51 and 52.

What is the due date for filing GSTR-1 under Section 37?
The 10th day of the month following the tax period for which outward supplies are being reported.

What form is used for filing outward supplies under Section 37?
FORM GSTR-1 is the prescribed form for reporting outward supplies.

Is there any restriction on furnishing GSTR-1 after a certain time?
Yes, as per Section 37(5), GSTR-1 cannot be filed after three years from the due date of furnishing such details, unless permitted by government notification.

Can outward supply details be filed if previous GSTR-1 returns are pending?
No, Section 37(4) restricts filing for a tax period unless all previous GSTR-1 returns have been filed.

Has the invoice matching concept been removed?
Yes, Section 37(2), which dealt with invoice matching and acceptance/rejection of inward supply details, was omitted from October 1, 2022.

How are outward supply details communicated to recipients now?
They are auto-populated in the recipient’s GSTR-2B, streamlining ITC claims.

Can errors or omissions in GSTR-1 be rectified?
Yes, Section 37(3) allows rectification of errors or omissions, provided it is done within the prescribed time limit.

What is the time limit for rectifying errors in GSTR-1?
Rectifications must be made on or before November 30 of the subsequent financial year or the date of filing the annual return, whichever is earlier.

Are there any relaxations for missing GSTR-1 deadlines?
The government may allow relaxations via notification, based on recommendations of the GST Council.

Can taxpayers file GSTR-1 quarterly?
Yes, eligible taxpayers with turnover below the threshold can opt for quarterly filing under Rule 61A.

Can a nil GSTR-1 be filed using SMS?
Yes, Rule 67A allows filing of nil GSTR-1 through SMS facility.

What happens if GSTR-1 is not filed sequentially?
Subsequent periods’ GSTR-1 cannot be filed until pending returns are cleared, as per Section 37(4).

What documents are included in ‘details of outward supplies’?
Invoices, debit notes, credit notes, and revised invoices related to outward supplies must be reported.

Has the restriction on filing between the 11th and 15th of the month been removed?
Yes, this restriction was removed with effect from October 1, 2022.

Is it mandatory to file GSTR-1 even if there are no outward supplies?
Yes, a nil GSTR-1 must still be filed within the due date.

What are the consequences of not filing GSTR-1?
Failure to file may lead to penalties, inability to generate e-invoices, and blockage of ITC to recipients.

Is GSTR-1 filing linked with e-way bill generation?
Yes, non-filing of GSTR-1 can restrict e-way bill generation for taxpayers.

What powers does the Commissioner have regarding the filing deadline?
The Commissioner may extend the deadline for a class of registered persons through notification.