CGST Act · Chapter IX
Returns
s. 37Outward supplies (GSTR-1)
Section 37 requires every regular taxpayer to report its outward supplies, invoice by invoice for business customers. What the supplier reports here is what its customers see in their credit statement under section 38 — so an error in this statement can cost the customer its input tax credit.
- Under section 37(1) of the CGST Act, 2017 every registered person other than an Input Service Distributor, a non-resident taxable person, a composition taxpayer and a TDS or TCS collector must furnish details of outward supplies for each tax period (Form GSTR-1).
- The statutory date is the 10th of the following month; by notification under the proviso it is the 11th for monthly filers, and quarterly filers under the QRMP scheme file by the 13th after the quarter.
- The details are communicated to recipients and form the basis of their input tax credit statement under section 38.
- Errors may be rectified, but not after 30 November following the end of the financial year or the date of the annual return, whichever is earlier (proviso to section 37(3)).
- From 01.10.2022 a statement cannot be filed while an earlier one is pending (section 37(4)); from 01.10.2023 it cannot be filed more than three years after its due date (section 37(5)).
- In CBIC v Aberdare Technologies (2025) the Supreme Court declined to interfere with a Bombay High Court order allowing bona fide clerical errors to be corrected after the time limit, and asked the CBIC to re-examine the timelines.
s. 38Inward supplies and ITC communication
Section 38 is the recipient's side of section 37. Suppliers' reported invoices are compiled into a statement of input tax credit for each recipient (Form GSTR-2B), which shows what credit is available and what is not. Since 01.01.2022 a recipient can take credit only on invoices that appear there.
- Under section 38(1) of the CGST Act, 2017 the details of outward supplies furnished by suppliers, and a statement of input tax credit, are made available electronically to each recipient (Form GSTR-2B).
- The statement shows supplies on which credit may be available, and supplies on which it cannot be availed — for instance where the supplier is newly registered, has defaulted in paying tax, or has reported far more tax than it paid (section 38(2)(b)).
- Section 16(2)(aa) makes appearance in this statement a condition for credit, and section 16(2)(ba) denies credit on supplies the statement shows as restricted.
- From 01.10.2025 the Finance Act, 2025 replaced the "auto-generated" statement with a "statement" and added clause (c) — the legal basis for the Invoice Management System, in which recipients accept, reject or keep invoices pending before GSTR-2B is finalised.
s. 39Furnishing of returns (GSTR-3B)
Section 39 is the return section. Every regular taxpayer files a self-assessed return of supplies, credit and tax — in practice Form GSTR-3B — and pays the tax due with it. Special categories file their own returns. Errors are corrected in a later return, not by reopening the past one.
- Under section 39(1) of the CGST Act, 2017 every regular registered person files a monthly return of inward and outward supplies, credit availed, tax payable and tax paid (Form GSTR-3B), due on the 20th of the following month; taxpayers with turnover up to Rs. 5 crore may opt to file quarterly under the QRMP scheme while paying tax monthly.
- Composition taxpayers file an annual return (GSTR-4) and pay quarterly; tax deductors (GSTR-7), Input Service Distributors (GSTR-6) and non-resident taxable persons (GSTR-5) file their own returns.
- Tax due must be paid by the due date of the return (section 39(7)), and a return must be filed even if there were no supplies (section 39(8)).
- Omissions or incorrect particulars are corrected in the return for the period in which they are noticed, not later than 30 November after the year or the annual return, whichever is earlier (section 39(9)); in Union of India v Bharti Airtel (2021) the Supreme Court refused to let past returns be reopened.
- A return cannot be filed while an earlier return, or the GSTR-1 for the same period, is pending (section 39(10)), nor more than three years after its due date (section 39(11), from 01.10.2023).
s. 40First return
Section 40 closes a gap: a person who becomes liable to register is taxable from that date, though no return can be filed until registration is granted. Supplies of the interim period go into the first return.
- Under section 40 of the CGST Act, 2017 outward supplies made between the date of liability to register and the date registration is granted must be declared in the first return after registration.
- Revised tax invoices for those supplies may be issued within one month of the grant of registration (section 31(3)(a)).
s. 41Availment of ITC
Section 41 says how credit enters the books: the taxpayer takes it, self-assessed, in its return, and it is credited to the electronic credit ledger. If the supplier has not paid the tax on the supply, the credit must be reversed with interest — and can be taken again when the supplier pays.
- Under section 41(1) of the CGST Act, 2017 a registered person avails eligible input tax credit, as self-assessed, in its return, and it is credited to its electronic credit ledger.
- Under section 41(2), credit on supplies whose tax the supplier has not paid must be reversed with interest; under the proviso it may be re-availed once the supplier pays.
- Rule 37A requires reversal where the supplier has not filed its GSTR-3B for the period by 30 September following the end of the financial year; the recipient reverses by 30 November.
- Before 01.10.2022 the section allowed credit only "on a provisional basis" pending matching under section 42 — a scheme never operated.
s. 42Omitted (Matching)
Section 42 is no longer in the Act. It provided for matching each recipient's credit claim against its supplier's return, with mismatches added back to the recipient's liability. The scheme was never brought into operation and was omitted from 01.10.2022; credit is now controlled through the statement under section 38 and the conditions in section 16.
- Section 42 of the CGST Act, 2017 was omitted by the Finance Act, 2022 with effect from 01.10.2022 (Notification 18/2022-Central Tax).
- It provided for matching the recipient's inward-supply details with the supplier's outward-supply details and with IGST paid on imports, communicating discrepancies, and adding unrectified mismatches to the recipient's output tax with interest.
- Because the returns it depended on (GSTR-2 and GSTR-3) were never operated, the matching was never carried out.
- Its function is now served by sections 16(2)(aa) and (ba), 38 and 41 — credit only on invoices in GSTR-2B, and reversal where the supplier has not paid.
s. 43Omitted (Output tax matching)
Section 43 was the mirror of section 42 for credit notes: a supplier's reduction of tax was to be matched against the recipient's reduction of credit. It was never operated and was omitted from 01.10.2022; a similar control now sits in the proviso to section 34(2).
- Section 43 of the CGST Act, 2017 was omitted by the Finance Act, 2022 with effect from 01.10.2022 (Notification 18/2022-Central Tax).
- It provided for matching credit notes issued by a supplier with the corresponding reduction of credit by the recipient, with unmatched reductions added back to the supplier's liability with interest.
- From 01.10.2025 the proviso to section 34(2) serves the same purpose: a supplier may reduce its tax on a credit note only if the registered recipient has reversed the credit.
s. 43AOmitted
Section 43A was inserted in 2018 for a new return system in which recipients would verify their suppliers' invoices online and credit on unreported invoices would be capped. The new returns were abandoned; section 43A was never brought into force and was omitted from 01.10.2022.
- Section 43A was inserted in the CGST Act, 2017 by the CGST (Amendment) Act, 2018, but no date was ever notified for it to come into force.
- It would have let the rules prescribe how recipients verify suppliers' invoices and avail credit — with credit on invoices not uploaded by suppliers capped at 20% of the credit on uploaded invoices, and joint liability of supplier and recipient for tax on invoices uploaded without a return.
- It was omitted by the Finance Act, 2022 from 01.10.2022 (Notification 18/2022-Central Tax).
s. 44Annual return
Section 44 requires an annual return summarising the year's returns, with a reconciliation to the audited financial statements. Since 01.08.2021 the reconciliation is self-certified — the chartered accountant's certificate went with the audit requirement in section 35(5).
- Under section 44(1) of the CGST Act, 2017 every registered person other than an Input Service Distributor, a tax deductor or collector, a casual taxable person and a non-resident taxable person files an annual return (Form GSTR-9) for each financial year, due on 31 December after the year (Rule 80).
- The return may include a self-certified reconciliation of the values declared in returns with the audited financial statements (Form GSTR-9C), required where aggregate turnover exceeds Rs. 5 crore.
- Under the first proviso, taxpayers with aggregate turnover up to Rs. 2 crore have been exempted from filing the annual return by notification for each year so far.
- Government departments and local authorities whose accounts are audited by the CAG or a statutory local-fund auditor are outside the section (second proviso).
- From 01.10.2023 an annual return cannot be filed more than three years after its due date (section 44(2)).
s. 45Final return
Section 45 requires a person whose registration is cancelled to file one last return, settling the tax payable on stock and capital goods under section 29(5).
- Under section 45 of the CGST Act, 2017 a registered person who was required to file returns under section 39(1) and whose registration is cancelled must file a final return (Form GSTR-10) within three months of the date of cancellation or the date of the cancellation order, whichever is later.
- Composition taxpayers, Input Service Distributors, non-resident taxable persons and TDS/TCS registrants are not required to file it.
s. 46Notice to defaulters
Section 46 is the first step against a non-filer: a notice requiring the return within fifteen days. If a return under section 39 or 45 is still not filed, the officer may assess the tax to the best of his judgment under section 62.
- Under section 46 of the CGST Act, 2017, where a registered person fails to furnish a return under section 39, 44 or 45, a notice is issued requiring it within fifteen days (Form GSTR-3A, Rule 68).
- If a return under section 39 or 45 is still not filed after the notice, the proper officer may make a best-judgment assessment under section 62; that order is deemed withdrawn if a valid return is filed within sixty days of its service (thirty days before 01.10.2023), or within a further sixty days on payment of an additional late fee.
s. 47Late fee
Section 47 fixes a late fee for every day a statement or return is late. The statutory amounts are reduced for most taxpayers by notifications under section 128, so the figure actually payable depends on the return and the taxpayer's turnover.
- Under section 47(1) of the CGST Act, 2017 a person who files GSTR-1 (section 37), a return under section 39 or 45, or (from 01.10.2022) a TCS statement under section 52 late pays a late fee of Rs. 100 a day, up to Rs. 5,000.
- Under section 47(2) a late annual return attracts Rs. 100 a day, up to 0.25% of turnover in the State or Union territory.
- These are CGST amounts; an equal late fee is payable under the State or UT Act.
- Notifications under section 128 have reduced the fee: for GSTR-3B and GSTR-1 (from June 2021) to Rs. 10 a day for nil returns and Rs. 25 a day otherwise, with turnover-based caps; for GSTR-9 (from 2022–23) to Rs. 25 or Rs. 50 a day up to 0.02% of turnover for taxpayers up to Rs. 20 crore.
s. 48GST practitioners
Section 48 lets a taxpayer authorise an enrolled GST practitioner to file statements and returns on its behalf — but the taxpayer remains answerable for their correctness.
- Under section 48(1) of the CGST Act, 2017 the eligibility, enrolment, duties and removal of GST practitioners are prescribed by rules (Rules 83 to 84).
- A registered person may authorise an enrolled practitioner to furnish GSTR-1, returns under sections 39, 44 and 45, and from 01.02.2019 to perform other prescribed functions — such as refund claims and applications to amend or cancel registration (section 48(2), Rule 83(8)); a practitioner may also appear as authorised representative under section 116.
- Responsibility for the correctness of what the practitioner files remains with the registered person (section 48(3)).