Businesses that do not pay monthly GST and default on filing summary return will not be able to file GSTR-1 sales returns of the succeeding month from January 1, 2022. The GST Council that met in Lucknow on Friday took a number of measures to make augment compliance such as mandatory Aadhaar authentication for businesses to file refund claims.

The recent move will help in plugging the gaps and revenue leakage due to GST evasion. The indirect tax regime body amended the Rule 59(6) of the Central GST Rules with effect from January 1, 2022, to provide that a registered person shall not be allowed to furnish Form GSTR-1, if he has not furnished the return in Form GSTR-3B for the preceding month.

As of now rules restrict filing of return for outward supplies or GSTR-1 in case a business defaults on GSTR-3B of preceding two months. Businesses are required to file GSTR-1 of a particular month by the 11th day of the subsequent month, GSTR-3B, through which businesses pay taxes, is filed between 20th and 24th day of the subsequent month.

The GST Council also made Aadhaar authentication of GST registration mandatory in order to be eligible for filing tax refunds and applying for revocation of cancellation of registration.

It is to be noted that Central Board of Indirect Taxes and Customs (CBIC) had made Aadhaar authentication mandatory for businesses with effect from August 21, 2020.

Also, if businesses do not provide Aadhaar number then registration is granted after physical verification of place of business.

The Council has decided that businesses will have to link their GST registration with biometric Aadhaar for claiming tax refunds as also applying for revocation of cancellation of registration.

The Council which is made up of central and state finance ministers also decide that refunds will be disbursed through bank accounts, which is linked with same PAN on which registration has been obtained.