If goods are returned after 6 months in GST, it is generally treated as a fresh supply rather than a return, requiring the buyer to issue a tax invoice and pay GST, as the credit note window for the original seller has expired. The transaction becomes taxable, and input tax credit (ITC) on the original supply may be reversed.
In this case, the tax will be payable because the goods were not returned within 6 months of the GST being implemented, nor were the goods returned within 6 months from the date of sale. However, the goods would have not been taxable had they been returned before the 6-month date limit had not been breached.
If you (a regular taxpayer) does not file a return for a continuous period of six months, then the GST Officer may cancel the GST registration of such person. Before cancellation, the officer will issue a Notice seeking your clarification.
Section 16(2) and Rule 37
If he made proportionate payment to supplier with GST within 180 days then he has to reverse ITC proportionately . If No payment is made within 180 days, then whole the ITC has to be reversed. When the payment is made to the supplier ITC reversed will be reclaimed .
Therefore, upon non –filing of GST returns or missing out the GST due dates, the GST law prescribes a general penalty. The maximum penalty that may be imposed is Rs. 5,000. The taxpayer will be required to pay interest on late payment of GST at a rate of 18% annually in addition to the late payment penalty.
Applicability of the Three-Year Rule
As per the advisory, no GST return can be filed after three years from its original due date.
Grace periods typically range from 15 to 30 days. While technically a customer could wait until the exemption date to pay, insurers may still treat the premium as GST-inclusive based on the due date, not the payment date. ...
Thus, practically every situation is covered. The GST law requires that every claim for refund is to be filed within 2 years from the relevant date. Treatment for Zero Rated Supplies: One of the categories under which claim for refund may arise would be on account of exports.
In accordance with CGST Rules 42 and 43 of the CGST Rules, input credit for products and services used partly for business and partly for other purposes must be reversed. When supplies include taxable, exempt, and nil-rated products, input credit reversal is also needed.
Q- What is the GST amnesty Scheme 2024? India's new Goods and Services Tax (GST) amnesty scheme is set to take effect on November 1, 2024. This initiative provides relief to taxpayers with outstanding GST demands from the period of 2017-18 to 2019-20, waiving interest and penalties for non-fraudulent cases.
4-year credit time limit
If you account for GST on a cash basis, the earliest tax period in which you could claim a GST credit for a purchase is the tax period in which you make the payment. If you make the payment over multiple tax periods, the 4-year credit time limit applies separately to each part of the payment.
The penalty for late GST/HST filing is 1% of any amount you owe, plus an extra 0.25% for each full month your payment is overdue, up to 12 months. If the CRA issues a formal demand to file and you ignore it, they add another $250 penalty even if you don't owe any tax.
According to a report from the U.S. PIRG Education Fund, about 90 percent of first-time late fees can be waived if you simply ask. Even if you've missed payments more than once, some issuers still offer goodwill adjustments.
If the Goods Are Returned after 6 months
GST will be payable by the person returning the goods (i.e. the buyer) after 6 months if those goods are liable to tax under GST Act The seller must also pay GST on the goods returned after 6 months.
GST law also provides for grant of provisional refund of 90% of the total refund claim, in case the claim relates for refund arising on account of zero rated supplies. The provisional refund would be paid within 7 days after giving the acknowledgement.
Individuals with a GST account for a personal business (sole proprietorship) typically report GST in line with the calendar year (January 1 – December 31). Generally these returns are due to be filed by June 15 of the following year, however if GST is owed to the government, the payment deadline is April 30.
Rule 37 under GST Act prescribes the conditions for the reversal of input tax credit (ITC) on goods and/or services if full payment is not made within 180 days of the invoice's issue.
"ITC reversal" under GST is the broader concept governed by Rule 42 (inputs/input services) and Rule 43 (capital goods). Whenever you use inputs, input services, or capital goods in making both taxable and exempt supplies, or for business and non-business purposes, you must reverse the proportionate ITC.
One of the factor relevant for determining time of supply is the person who is liable to pay tax. In reverse charge, recipient is liable to pay GST. Thus time of supply for supplies under reverse charge is different from the supplies which are under forward charge.
If you never received it, the CRA will accept refund claims up to 3 years later. This means that you could still receive your payment retroactively. A great accounting software program could help you find this information! Be sure to review your information thoroughly when filing tax returns.
The application for a GST refund must be submitted using form RFD 01 within two years from the relevant date. The form also requires approval from a Chartered Accountant. There are also numerous online tools to calculate GST refund.
The GST network issued another advisory on 7th June 2025, implementing the rule of time-barring of GST return filing beyond three years from the due date. By this update, taxpayers will not be able to file GST returns after three years from the due date of such return.
Backdating a GST registration is limited to 4 years. This means, unless there is fraud or evasion: we can't backdate your GST registration by more than 4 years. you are not required to be registered before that date.
Starting September 22, 2025, GST in India will be simplified to primarily two rates: 5% and 18%, with a special 40% rate on luxury and sin goods like tobacco and high-end vehicles. Many essentials, including certain medicines and foods, are now zero-rated, while several items see reduced rates.
IF SUCH GOODS ARE REJECTED AND RETURNED WITHIN 6 MONTHS FROM APPOINTED DAY THEN NO TAX SHALL BE PAYABLE UNDER GST.