GST Return Filing Deadline: 3-Year Time Limit Starts from July 2025 – Act Now to Avoid Penalties

Starting July 2025, the GST Network (GSTN) will enforce a strict three-year deadline for filing all GST returns, beyond which filing will be permanently barred on the GST portal. This rule, rooted in the Finance Act, 2023 and applicable to key returns like GSTR-1, GSTR-3B, and GSTR-9, aims to enhance compliance and discipline within the GST framework.

Taxpayers failing to file returns within the stipulated timeframe risk losing the ability to claim or retain Input Tax Credit (ITC), leading to potential financial losses. With no exceptions or redressal mechanisms for delays due to litigation or system issues, businesses must act immediately to reconcile records, clear any pending returns, and ensure timely future filings.

Clock Ticking: GST Returns Barred After Three Years from July 2025

Kolkata, June 7, 2025 – In a significant move to enhance compliance and streamline the Goods and Services Tax (GST) regime, the Goods and Services Tax Network (GSTN) has confirmed that taxpayers will no longer be able to file their GST returns after the expiry of a three-year period from their respective due dates. This crucial restriction, stemming from the Finance Act, 2023, and implemented via Notification No. 28/2023 – Central Tax dated July 31, 2023, will be enforced on the GST portal starting from the July 2025 tax period. This means returns for the July 2025 period will be filed in August 2025.

This development follows an earlier advisory issued by GSTN on October 29, 2024, signaling the impending changes. The consistent communication underscores the urgency for businesses to reconcile their records and ensure all pending GST returns are filed without delay.

The Legal Basis and Scope of the Restriction

The foundation for this time-barring provision lies in the Finance Act, 2023 (8 of 2023), dated March 31, 2023, which came into effect from October 1, 2023. Specifically, the restriction applies to returns furnished under the following key sections of the CGST Act:

• Section 37 (Outward Supply): This primarily pertains to GSTR-1, which details all outward supplies of goods and services made by a registered person.
• Section 39 (Payment of Liability): This covers returns like GSTR-3B, a summary return for declaring tax liabilities and claiming input tax credit.
• Section 44 (Annual Return): This refers to GSTR-9, the annual return filed by regular taxpayers.
• Section 52 (Tax Collected at Source – TCS returns): This specifically covers GSTR-7 (for tax deducted at source) and GSTR-8 (for tax collected at source by e-commerce operators).

Returns Covered:

The comprehensive list of GST returns that will be barred after three years from their due date includes:

• GSTR-1: Details of outward supplies.
• GSTR-3B: Monthly summary-cum-payment return.
• GSTR-4: Return for composition taxpayers.
• GSTR-5: Return for non-resident taxable persons.
• GSTR-5A: Return for non-resident OIDAR service providers.
• GSTR-6: Return for Input Service Distributors (ISD).
• GSTR-7: Return for Tax Deducted at Source (TDS).
• GSTR-8: Return for Tax Collected at Source (TCS).
• GSTR-9: Annual return.

Implications for Taxpayers

The enforcement of this three-year time limit carries significant implications for businesses:

Permanent Bar on Filing: Once the three-year window from the original due date expires, the GST portal will permanently restrict the filing of these returns. This means businesses will lose the opportunity to rectify past omissions or fulfill long-pending compliance requirements.

Impact on Input Tax Credit (ITC): A critical ramification relates to Input Tax Credit. If a supplier fails to file their GSTR-3B within the stipulated three-year period, the recipient of goods or services may face challenges in claiming or retaining the associated ITC. The absence of the supplier’s return could lead to a denial of ITC, potentially requiring the buyer to reverse already claimed ITC, leading to significant financial setbacks.

Enhanced Compliance Discipline: This move aims to instill greater discipline in GST compliance and curtail prolonged non-compliance. It encourages taxpayers to maintain real-time reconciliation of their records and ensure timely filings.

No Redressal Mechanism for Exceptional Cases: Experts have expressed concerns that the absence of a clear redressal mechanism for exceptional cases (e.g., due to litigation, system issues, or genuine oversight) could severely impact taxpayers with pending filings, potentially leading to permanent denial of ITC and financial losses.

Greater Responsibility on Businesses: Taxpayers must now enhance their internal controls to ensure timely and accurate reporting, as last-minute adjustments may not be feasible or permissible.

Call to Action for Taxpayers

Given the impending implementation from the July 2025 tax period, GSTN has repeatedly urged taxpayers to take immediate action:

• Reconcile Records: Businesses must meticulously reconcile their sales, purchases, and tax records.
• File Pending Returns: Any outstanding GST returns for past periods that are within the three-year window must be filed as soon as possible to avoid being locked out.
• Proactive Compliance: Going forward, taxpayers are advised to prioritize prompt and accurate filing of all GST returns rather than deferring them until the end of the permissible period.

The implementation of this three-year barring rule marks a crucial step towards stricter enforcement of GST compliance. While it promotes system discipline and data consistency, taxpayers must act swiftly to avoid potential financial repercussions and compliance issues. The message from GSTN is clear: the clock is ticking, and timely compliance is paramount.

FAQs on GST Return Filing from July 2025

What is the new GST return filing rule effective from July 2025?
From July 2025, taxpayers will not be allowed to file GST returns after three years from their original due date.

What is the legal basis for this restriction?
The restriction stems from the Finance Act, 2023, and is enforced through Notification No. 28/2023 – Central Tax dated July 31, 2023.

When will the three-year time limit apply on the GST portal?
The restriction will be implemented for returns due from the July 2025 tax period onwards.

Which sections of the CGST Act are affected by this rule?
Sections 37 (GSTR-1), 39 (GSTR-3B), 44 (GSTR-9), and 52 (GSTR-7 & GSTR-8) are impacted by this rule.

What types of GST returns are covered under this restriction?
Returns affected include GSTR-1, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8, and GSTR-9.

What happens if a return is not filed within three years?
The GST portal will block the return permanently, and filing will no longer be possible after that window.

Can a business file older pending GST returns after the three-year period?
No, filing will be completely barred after three years from the return’s original due date.

How will this impact Input Tax Credit (ITC)?
If a supplier fails to file GSTR-3B in time, the recipient may lose the right to claim or retain related ITC.

Will this affect taxpayers involved in litigation or system-related delays?
Yes, the rule applies uniformly, and there is no explicit redressal mechanism for exceptional cases.

Why is this restriction being implemented?
It aims to improve compliance, reduce long-term pending filings, and ensure timely reconciliation of records.

What should taxpayers do immediately to comply with this rule?
They must reconcile past records and file any pending GST returns that fall within the current three-year window.

Does this restriction apply to composition taxpayers?
Yes, GSTR-4 filed by composition taxpayers is also subject to the three-year limitation.

Is GSTR-9 (Annual Return) also time-barred under this rule?
Yes, GSTR-9 must also be filed within three years from its due date or it will be permanently barred.

What about non-resident taxable persons and OIDAR service providers?
Returns like GSTR-5 and GSTR-5A for non-resident entities and OIDAR providers are also included under this rule.

Are Input Service Distributors (ISD) affected by the new rule?
Yes, ISDs filing GSTR-6 must also adhere to the three-year limit for return submission.

How does this rule affect returns for TDS and TCS under GST?
GSTR-7 (TDS) and GSTR-8 (TCS) are both restricted by the three-year filing cap.

What is the first return period impacted by this rule?
The rule first applies to the July 2025 return, which is due in August 2025.

Is there any leeway for accidental or genuine delays?
No, currently, the rule offers no exceptions or provisions for accidental or justified delays.

How can businesses safeguard against future compliance risks?
They should strengthen internal processes to ensure timely, accurate, and consistent GST return filings.

What is GSTN advising businesses to do right now?
GSTN urges businesses to immediately file all pending returns that fall within the three-year period and ensure proactive compliance going forward.