Section 39 of CGST Act – A Brief Explanation
A simplified summary of Section 39 of CGST Act
In this post, we’ll look at Section 39 of the Central Goods and Services Tax (CGST) Act, which describes the conditions under which registered individuals must file tax returns under the GST system.
Here are the key points:
- Monthly Returns (Sub-section 1): Except for some categories (Input Service Distributor, non-resident taxable person, and those covered by sections 10, 51, or 52), every registered person must complete a monthly return. This return provides information about all inside and outside supplies, input tax credits claimed, taxes paid, and other required information. The return must be filed electronically.
- Quarterly Returns (Proviso to Sub-section 1): Subject to certain conditions, the government may advise specific classes of registered persons to file quarterly rather than monthly returns.
- Composition Scheme (Sub-section 2): Those who choose the composition plan (section 10) must file an annual return that includes their turnover, inward supplies, taxes paid, and other essential details.
- Tax Deduction at Source (Sub-section 3): Persons required to deduct tax at the source (section 51) must file a monthly return within ten days of the end of the month.
- Input Service Distributor (Sub-section 4): Input Service Distributors must submit a monthly return within thirteen days of the end of the month.
- Non-resident Taxable Persons (Sub-section 5): Non-resident taxable persons must file a monthly return within thirteen days after the end of the month or seven days after the end of their registration term, whichever comes first.
- Extension of Time (Sub-section 6): The Commissioner can extend the time for filing returns for certain classes of registered persons.
- Tax Payment (Sub-sections 7 and 8): Taxes payable must be paid to the government in accordance with the return filed. Registered individuals must file returns for all tax periods, even if no supplies were made at that time.
- Rectification of Errors (Sub-section 9): If errors are detected in a filed return, they can be corrected in the return for the period the error was discovered, subject to interest payments. However, no corrections are permitted after November 30th, the financial year’s end, or the filing deadline for the annual return, whichever occurs first.
- Sequential Filing (Sub-section 10): A person can only file a return for the current tax period if earlier returns have been filed.
- Three-year Limitation (Sub-section 11): Returns for a tax period can only be filed after three years from the due date if the government allows it under certain conditions.
Before and After the Changes
Aspect | Before Changes | After Changes |
Filing Frequency | Every business had to file monthly taxes, which was difficult for smaller companies. | Many businesses can now submit quarterly returns, reducing paperwork. |
Exceptions | Only a few businesses were eligible to file quarterly returns. | More firms, particularly small ones, can choose quarterly returns. |
Deadline Flexibility | There were fewer choices for extending deadlines, making compliance difficult. | Deadlines can be extended, making compliance easier. |
Error Corrections | Errors had to be corrected quickly, often within tight deadlines. | Mistakes can be corrected up to November 30th after the financial year ends. |
Late Filing | Returns had to be filed within specific time limits. | Returns can be filed up to three years after the due date, giving more flexibility. |
The changes were made to simplify the tax filing process, particularly for smaller enterprises.
For more detailed guidance, see our blogs on GSTR-3B, GST Composition Scheme, GST ITC-04, GSTR-9Annual Return, and GST Registration Certificate.
