GSTR-3A Notice: What GST Defaulters Need to Know

Goods and Services Tax (GST) mandated a timely filing of taxes by all registered taxpayers. If a taxpayer does not file GST returns as required, the associated tax authority will issue the taxpayer a GSTR-3A Notice. The notice serves both re-notifying the taxpayer of the missed tax obligation(s) and also gives the taxpayer notice of the consequences if the tax obligations are not fulfilled promptly.

What Is a GSTR-3A Notice

Under Article 46 of the CGST Act, 2017, the notice known as GSTR-3A is an electronic program that allows the department responsible for collecting Goods and Services Tax (GST) [hereinafter referred to as "the Department"] to issue notices to registered taxpayers who have not complied with their requirement to submit certain documents to the Department. GSTR-3A is sent to those registered taxpayers who do not submit their required documents by the time specified in the notice.

The notice may be sent to those registered taxpayers who have not submitted their:

GSTR-1;
GSTR-3B;
GSTR-4 (those registered in the Composition Scheme); or,
GSTR-8 (e-commerce operators).

GSTR-3A serves as a reminder/warning from the Department to the registered taxpayer that if the taxpayer does not submit the required document within 15 days of receiving the GSTR-3A notice, then the Department may pursue additional measures against the taxpayer, such as best judgement assessment, late fees, interest, and/or cancellation of GST registration.

Why Is a GSTR-3A Notice Issued

The GSTR-3A document is created when a Taxpayer registered with GST does not file GST in time. A GSTR-3A may be issued for several reasons, including the following:

Failure to File or Timely File any and all of your GST returns. Examples include: GSTR-1, GSTR-3B, GSTR-4, and GSTR-8.
Receiving automatic reminders and alerts by GST online system and not per any of the previous notices or letters from the Department.
Repeatedly or continuously defaulting on the filing of GST Returns for several accounting periods.
Having a valid GST number and not filing any Returns, even with a nil turnover.

The purpose of issuing the GSTR-3A document is to allow the Department to begin enforcing GST before taking more aggressive action such as imposing fines or cancelling the GST.

What Happens If You Ignore a GSTR-3A Notice

If a taxpayer does not file a tax return after receiving a GSTR-3A notice(regarding missing returns), the following are possible ramifications for not responding to/filing a GSTR-3A notice:

Best Judgment Assessment

Section 62 of the CGST Act allows the GST official to conduct assessments according to the Best Judgment method using information obtained from either the GST portal or via other means such as previously filed GST Returns and third-party data. The Best Judgment Assessment is not an accurate reflection of the information submitted on the GST Returns. A Best Judgment Assessment could result in an increased amount of Tax that is owed by the person being assessed or determined.

Late Fees & Interest

When a person does not file a GST Return, they will have to pay Late Fees and Interest for the period they fail to file returns. The Late Fees and Interest will be paid as follows:

a Late Fee of ₹20 per day for Nil Returns filed
a Late Fee of ₹50 per day for Regular Returns filed
an interest rate of 18% per annum for outstanding Tax liabilities These charges will accumulate, creating additional financial liabilities on the taxpayer.

Cancellation of GST Registration

Failure to comply with GST regulations multiple times (i.e., many days or weeks) or too long (i.e., months or years) could result in the department cancelling the person's GST Registration. A cancellation of a person's GST Registration will have a significant impact on the person's ability to do business. Upon cancellation, the tax payer will not be allowed to issue tax invoices or claim input tax credits.

Recovery Proceedings

If a person still owes tax amounts to the GST department when the due date passes, the department will initiate recovery proceedings for those tax amounts. Recovery proceedings could include the attachment of the person's bank accounts, offsetting of tax refunds, and other forms of coercive action.

Legal Provision Governing GSTR-3A

Particulars	Details
Relevant Section	Section 46 of CGST Act, 2017
Issuing Authority	GST Department (System-generated)
Applicable To	Registered GST taxpayers who fail to file returns
Returns Covered	GSTR-1, GSTR-3B, GSTR-4, GSTR-8
Time to Respond	15 days from notice date
Consequence of Non-Compliance	Best judgment assessment under Section 62
Nature of Notice	Mandatory compliance reminder

Can a GSTR-3A Notice Be Withdrawn

It is possible to withdraw a GSTR-3A notice after filing the overdue return within 15 days of when the notice is served on you. Filing your return with any necessary late fees and interest creates an automatic nullification of the best judgment assessment provisions in Section 62. The GST department will not initiate any assessments, collection or cancellation of registration because of this default. In cases where the taxpayer had filed their return after they received the Assessment Order, the Assessment Order continues to apply and thus, corrective action must be taken by the taxpayer or they must seek a resolution through other legal means.

How to Respond to a GSTR-3A Notice

To successfully complete the requirements of a GSTR-3A Notice, follow these simple steps:

Go to the GST Portal and log in.
Go to Services → Returns → File Returns.
Find the unfiled return listed in the notice.
File the return along with applicable late fees and interest.
Once you have finished the filing, you can assume that you have complied with the notice.

How Can You Avoid Receiving a GSTR-3A Notice

To successfully complete the requirements of a GSTR-3A Notice, follow these simple steps:

File your return, even if you do not have any business (Nil Return).
Use a GST Calendar to set Alerts and Track Due Dates
Regularly Reconcile your GSTR-1, GSTR-2B, and GSTR-3B
Use a Professional or GST Practitioner for your Return Submissions

Conclusion

Never overlook the GSTR-3A Notice. It is an alert from the government that represents the beginning of more severe actions against you with regards to goods and services tax (GST). Not filing any outstanding returns by the deadline can be construed as being delinquent, resulting in additional charges as well as risking your GST registration and reputational risk. Meeting deadlines avoids last-minute challenges in GST compliance, resulting in lower costs in the long term than attempting to resolve issues through litigation.