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[F. No. CBEC-20/06/04/2020-GST]
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
New Delhi, the 1st January, 2021
Notification No. 01/2021 – Central Tax: Seeks to make amendment (2021) to CGST Rules, 2017.
[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]
G.S.R……(E). - In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following rules further to amend the Central Goods and Services Tax Rules, 2017, namely: -
(1). Short title and commencement. - (a) These rules may be called the Central Goods and Services Tax (Amendment) Rules, 2021.
(b) These rules shall come into force on the date of their publication in the Official Gazette.
(2). In the Central Goods and Services Tax Rules, 2017 (hereafter in this notification referred to as the said rules), in rule 59, after sub-rule (5), the following sub-rule shall be inserted namely:-
“(6) Notwithstanding anything contained in this rule, -
- a registered person shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1, if he has not furnished the return in FORM GSTR-3B for preceding two months.
- a registered person, required to furnish return for every quarter under the proviso to sub-section (1) of section 39, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3B for preceding tax period;
- a registered person, who is restricted from using the amount available in electronic credit ledger to discharge his liability towards tax in excess of ninety-nine per cent. of such tax liability under rule 86B, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3B for preceding tax period.”.
(Pramod Kumar)
Director,
Government of India
Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide notification No. 3/2017-Central Tax, dated the 19th June, 2017, published vide number G.S.R. 610 (E), dated the 19th June, 2017 and last amended vide notification No. 94/2020-Central Tax, dated the 22nd December, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 786(E), dated the 22nd December, 2020.
📚 Frequently Asked Questions (FAQs): Notification No. 01/2021 – Central Tax
Q1: What is Notification No. 01/2021 – Central Tax?
Answer:
Notification No. 01/2021 – Central Tax, issued on 1st January 2021, amended Rule 59 of CGST Rules, 2017. It introduced restrictions on furnishing GSTR-1 if a taxpayer hasn’t filed GSTR-3B for the preceding tax periods.
For expert GST guidance, consult GST Professionals.
Q2: What is the key amendment under Rule 59 by this notification?
Answer:
The new sub-rule (6) of Rule 59 states:
1️⃣ Taxpayers cannot file GSTR-1 if they haven’t filed GSTR-3B for the last two months.
2️⃣ Quarterly filers under QRMP cannot file GSTR-1/IFF if they haven’t filed GSTR-3B of the preceding quarter.
3️⃣ Taxpayers restricted under Rule 86B (99% ITC utilization cap) cannot file GSTR-1/IFF if they haven’t filed GSTR-3B for the preceding tax period.
For compliance help, see GST Compliance Services.
Q3: What is Rule 86B and how does it connect with this amendment?
Answer:
📌 Rule 86B restricts taxpayers from using more than 99% of ITC to discharge tax liability, ensuring at least 1% is paid in cash.
👉 Notification No. 01/2021 made a direct link: taxpayers under Rule 86B cannot file GSTR-1 if GSTR-3B for the previous period is not filed.
Businesses can stay ahead by using GST Return Filing with Finodha.
Q4: Why was this amendment introduced?
Answer:
The main purpose was to curb fake invoicing and ITC fraud by ensuring:
✔ GSTR-3B filing before GSTR-1 submission.
✔ Synchronization of outward supply details with tax liability.
✔ Increased compliance discipline among taxpayers.
If you’re a new business, start with GST Registration.
Q5: Who is most affected by Notification No. 01/2021?
Answer:
Businesses with compliance delays.
Quarterly filers under the QRMP scheme.
Taxpayers covered under Rule 86B restrictions.
For smoother compliance, explore MSME Registration with Finodha.
Q6: What happens if a taxpayer tries to file GSTR-1 without filing GSTR-3B?
Answer:
The GST portal will block GSTR-1/IFF filing until pending GSTR-3B returns are filed. This ensures ITC claims and outward supply reporting remain consistent.
For compliance automation, Digital Signature Certificate (DSC) helps in seamless filing.
Q7: How does this amendment strengthen GST compliance?
Answer:
✔ Prevents misuse of fake invoices.
✔ Encourages timely filing of GSTR-3B.
✔ Links ITC utilization with actual tax payment.
✔ Ensures better revenue monitoring by GST authorities.
For ongoing compliance, check Private Limited Compliance.
Q8: How does this notification relate to later GST relief notifications of 2021?
Answer:
While Notification 01/2021 was a compliance tightening measure, later notifications like 09/2021 to 14/2021 focused on relaxations (extensions, late fee waivers, ITC adjustments) due to COVID-19.
To balance compliance & relief, businesses can rely on Setup Business services from Finodha.
Q9: What should businesses do to avoid restrictions under Rule 59(6)?
Answer:
✅ File GSTR-3B timely.
✅ Reconcile ITC monthly.
✅ Avoid over-dependence on ITC (Rule 86B impact).
✅ Get professional GST support.
Check out Finodha’s GST Professionals for complete compliance solutions.
Download PDF: Notification No. 01/2021 – Central Tax
More Information: https://taxinformation.cbic.gov.in/
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