Section 46 of the Central Goods and Services Tax Act, 2017 deals with the notice to return defaulters. It provides the legal basis for issuing a notice to a registered person who fails to furnish a return required under the GST law.
GST returns are an important part of the compliance system because they allow a registered person to report taxable supplies, input tax credit, tax liability and tax payments to the Government. When a registered person does not file a required return within the prescribed time, the GST authorities can initiate the procedure under Section 46.
The section is closely connected with Rule 68 of the CGST Rules, 2017, which prescribes the issuance of FORM GSTR-3A to a registered person who fails to furnish specified returns. The prescribed notice generally provides 15 days to furnish the pending return.
Section 46 is also important because failure to respond to the notice can lead to further proceedings, including best-judgment assessment under Section 62 in applicable cases.
Therefore, Section 46 can be understood as an important compliance link between a missed GST return and possible assessment proceedings.
What Is Section 46 of the CGST Act?
Section 46 is titled:
“Notice to return defaulters.”
The provision states that where a registered person fails to furnish a return under Section 39, Section 44 or Section 45, a notice shall be issued requiring the person to furnish the return within a prescribed period.
The practical procedure is implemented through Rule 68 of the CGST Rules.
Rule 68 provides for issuance of FORM GSTR-3A electronically to a registered person who fails to furnish a return under Section 39, Section 44, Section 45 or Section 52.
Thus, Section 46 creates the statutory notice mechanism, while Rule 68 provides the corresponding procedural framework.
Purpose of Section 46
The primary purpose of Section 46 is to give a defaulting registered person a formal opportunity to file the pending return before further action is taken.
The provision therefore serves several purposes:
- identifying return defaults;
- formally notifying the taxpayer;
- providing an opportunity to comply;
- warning about possible further proceedings;
- facilitating assessment where the default continues; and
- improving compliance with GST return filing requirements.
It is therefore important to understand that a Section 46 notice is not itself a tax assessment order.
It is a notice requiring the taxpayer to file the pending return.
Which Returns Are Covered?
Section 46 specifically refers to returns under:
- Section 39;
- Section 44; and
- Section 45.
Rule 68 additionally refers to Section 52 in prescribing the scope of FORM GSTR-3A.
These provisions cover different types of GST compliance.
Section 39 – Periodic Returns
Section 39 deals with furnishing GST returns by registered persons and specified categories of taxpayers.
For example, a regular taxpayer may have a periodic return-filing obligation under the applicable GST framework.
Failure to furnish such a return can trigger the Section 46 notice mechanism.
Section 44 – Annual Return
Section 44 deals with the GST annual return.
Therefore, failure to furnish an annual return where the taxpayer is required to furnish it can also result in a notice under Section 46.
The GST Council has specifically discussed the use of FORM GSTR-3A for annual-return defaults.
Section 45 – Final Return
Section 45 deals with the final return after cancellation of GST registration.
A person required to furnish the final return in FORM GSTR-10 who fails to do so can receive a Section 46 notice.
The prescribed FORM GSTR-3A itself contains a specific format for a default in furnishing the final return after cancellation.
What Is FORM GSTR-3A?
FORM GSTR-3A is the notice issued to a registered person who has failed to furnish a required GST return.
Rule 68 specifically provides that the notice is issued electronically.
The notice identifies the relevant:
- GSTIN;
- registered person;
- tax period;
- type of return; and
- return-filing default.
The form then requires the taxpayer to furnish the pending return within the prescribed period.
The official CBIC FORM GSTR-3A specifies a 15-day period for furnishing the return after the notice.
What Does a GSTR-3A Notice Say?
The prescribed form essentially informs the taxpayer that:
- the taxpayer was required to furnish a particular return;
- the return was not filed by the due date;
- the taxpayer is being given an opportunity to furnish the return;
- the return should be furnished within 15 days; and
- failure to comply can result in further assessment proceedings.
The form also warns that the taxpayer may become liable for interest and penalty according to the applicable provisions.
The notice therefore provides a formal compliance opportunity before the next stage of proceedings.
Fifteen Days to File the Return
One of the most important practical aspects of Section 46 is the 15-day period provided through Rule 68 and FORM GSTR-3A.
Once the notice is issued, the taxpayer should not simply wait until further action is initiated.
The taxpayer should promptly:
- identify the pending return;
- determine why the return was not filed;
- prepare the relevant records;
- calculate the applicable tax liability;
- pay the required amount;
- file the return; and
- retain proof of filing.
The official GSTR-3A form expressly provides the 15-day period.
Example of a Section 46 Notice
Suppose a registered taxpayer was required to file a GST return for a particular tax period.
The due date passed, but the taxpayer did not file the return.
The GST system may issue FORM GSTR-3A under Section 46 read with Rule 68.
The notice informs the taxpayer that the return remains pending and provides 15 days to furnish it.
The taxpayer should then file the pending return within that period.
If the taxpayer files the return before further assessment action is taken, the consequences associated with non-filing can be avoided to the extent provided by law.
Section 46 Is Not the Same as a Demand Notice
A common misunderstanding is to treat a GSTR-3A notice as a final demand for tax.
That is not its primary purpose.
A Section 46 notice is fundamentally a notice to a return defaulter.
It informs the registered person that a required return has not been furnished and requires the return to be filed.
A subsequent assessment or demand proceeding, where applicable, is a separate legal step.
This distinction is important:
Section 46 → Notice for failure to furnish return
Section 62 → Best-judgment assessment for specified non-filers
Other demand provisions → Determination and recovery of tax in applicable circumstances
Relationship Between Section 46 and Section 62
Section 46 is particularly important because continued failure to file can lead to proceedings under Section 62 in applicable circumstances.
Section 62 deals with assessment of non-filers of returns.
Where a registered person fails to furnish a return under Section 39 or Section 45 even after a notice under Section 46, the proper officer can proceed with assessment under Section 62 according to the statutory requirements.
CBIC Circular No. 129/48/2019-GST specifically explains that Section 46 read with Rule 68 requires FORM GSTR-3A to be issued to a registered person who fails to furnish the relevant return, and that Section 62 provides for assessment of specified non-filers even after service of the Section 46 notice.
This makes Section 46 an important stage before best-judgment assessment in applicable cases.
What Is Best-Judgment Assessment?
Best-judgment assessment means that the proper officer determines the taxpayer’s liability based on the information and material available to the officer when the taxpayer has failed to furnish the required return.
The purpose is to determine the tax liability despite the taxpayer’s failure to file the return.
The taxpayer should therefore not assume that:
“If I do not file the return, there will be no tax liability.”
The opposite can occur.
The tax authority can proceed using the information available under the applicable assessment provisions.
What Happens If the Return Is Filed Before the Assessment Order?
The prescribed FORM GSTR-3A provides that the notice is deemed to be withdrawn where the relevant return is filed before issue of the assessment order.
This is an important compliance opportunity.
For example:
- Return due date passes.
- GSTR-3A notice is issued.
- Taxpayer files the pending return.
- Assessment order has not yet been issued.
In such a situation, the notice is designed to cease having effect according to the prescribed mechanism.
The taxpayer should nevertheless ensure that all applicable tax, interest, late fee and other amounts are properly discharged.
Section 46 and Interest
Failure to file a return does not generally eliminate the taxpayer’s liability for interest where interest is applicable.
The prescribed GSTR-3A notice itself warns that, in addition to tax assessed where applicable, the taxpayer may be liable to pay interest and penalty according to the Act.
The taxpayer should therefore calculate the relevant liability rather than simply filing a return without checking the applicable interest and late-fee consequences.
Section 46 and Late Fee
Late filing of GST returns can attract late fees under Section 47 and the applicable notifications.
The Section 46 notice does not replace the late-fee provisions.
Instead, it is an additional compliance action arising from the failure to file the return.
Therefore, a taxpayer receiving GSTR-3A should consider:
- pending tax;
- interest;
- late fee;
- applicable penalty;
- return filing; and
- any other amount arising under the GST law.
Section 46 and Final Return Under Section 45
Section 46 has particular importance for taxpayers whose GST registration has been cancelled.
After cancellation, a taxpayer covered by Section 45 may be required to furnish GSTR-10, the final return.
If GSTR-10 is not filed within the prescribed time, FORM GSTR-3A can be issued for the final-return default.
The official GSTR-3A format contains a separate notice specifically for failure to furnish the final return under Section 45.
This creates the following compliance sequence:
Cancellation of registration → GSTR-10 becomes due → GSTR-10 not filed → Section 46 notice → GSTR-3A → possible further proceedings
Example: Failure to File GSTR-10
Suppose a business’s GST registration is cancelled.
The business is required to furnish GSTR-10 but fails to do so within the applicable deadline.
A notice in FORM GSTR-3A can be issued under Section 46 read with Rule 68.
The notice informs the taxpayer of the pending final return and provides the prescribed period for compliance.
If the taxpayer still does not comply, further proceedings can follow according to the applicable law.
Section 46 and Annual Return Under Section 44
Section 46 is also relevant to annual-return defaults.
The statutory framework covers failure to furnish returns under Section 44, while Rule 68 prescribes FORM GSTR-3A for such defaults.
This became particularly important after the annual-return framework was expanded and annual-return compliance became subject to specific filing requirements and exemptions.
The taxpayer should therefore first determine whether GSTR-9 or another annual return is actually applicable.
If the annual return is applicable and remains unfiled, the Section 46 notice mechanism may apply.
Annual Return and GSTR-3A
The GST Council has specifically considered amendments to FORM GSTR-3A to cover failure to furnish annual returns in FORM GSTR-9 or GSTR-9A.
The proposal was intended to ensure that the notice mechanism under Section 46 and Rule 68 also clearly covered annual-return defaults.
This is important because taxpayers sometimes associate GSTR-3A only with monthly or quarterly return defaults.
The notice framework can also cover specified annual-return and final-return defaults.
Section 46 and Section 44 Exemptions
A taxpayer should not assume that receiving or expecting a Section 46 notice means that an annual return is automatically required.
For example, if a taxpayer falls within a class specifically exempted from furnishing an annual return for the relevant financial year, there should be no annual-return filing obligation merely because the taxpayer is registered.
The first step is therefore to establish whether the relevant return is legally required.
Only after a valid filing obligation exists can a failure to furnish that return create a return-default situation.
Section 46 and Section 52
Rule 68 expressly refers to failure to furnish a return under Section 52.
Section 52 deals with collection of tax at source by electronic commerce operators.
Therefore, the prescribed GSTR-3A framework is broader than the basic Section 46 wording alone.
This is an example of why Section 46 should be read together with Rule 68 when explaining the actual notice procedure.
What Should a Taxpayer Do After Receiving GSTR-3A?
A taxpayer should act promptly.
Step 1: Verify the Notice
Check:
- GSTIN;
- legal name;
- tax period;
- type of return;
- notice date; and
- applicable return.
Step 2: Identify the Reason for Non-Filing
Determine whether the return was missed because of:
- technical problems;
- lack of accounting records;
- cash-flow difficulties;
- oversight;
- business closure;
- cancellation of registration; or
- another reason.
Step 3: Prepare the Return
Prepare the relevant return using the correct records.
Step 4: Calculate Tax
Determine the tax payable after considering eligible input tax credit and other applicable adjustments.
Step 5: Calculate Interest and Late Fee
Determine applicable interest and late fee according to the relevant provisions.
Step 6: Pay the Required Amount
Discharge the applicable liability through the prescribed GST mechanism.
Step 7: File the Return
File the pending return within the period provided by the notice.
Step 8: Keep Proof
Retain:
- ARN;
- return acknowledgement;
- payment challans;
- notice copy; and
- relevant supporting documents.
Can a Taxpayer Ignore GSTR-3A?
A taxpayer should not ignore a Section 46 notice.
The notice is an official communication regarding a pending return.
If the taxpayer does not comply, further action can be initiated under the applicable provisions.
For specified non-filers, this can include best-judgment assessment under Section 62.
Ignoring the notice can therefore increase the compliance consequences rather than eliminate them.
What If the Taxpayer Believes the Notice Is Incorrect?
Sometimes a taxpayer may receive a notice even though the relevant return has already been filed or the taxpayer was not required to furnish that return.
In such a case, the taxpayer should verify the GST portal records and the return-filing status.
Important records include:
- return ARN;
- filing date;
- return period;
- GSTIN;
- cancellation status; and
- applicable exemption notification, where relevant.
If the return has already been filed, the taxpayer should preserve the filing acknowledgement and follow the appropriate GST portal or departmental procedure for resolving the discrepancy.
Section 46 and Cancelled GST Registration
Cancellation of GST registration does not necessarily mean that all return obligations immediately disappear.
Returns relating to periods before cancellation may still be required.
In addition, where Section 45 applies, a final return may be required.
Therefore, a cancelled GSTIN can still have outstanding filing obligations.
This is why taxpayers should review the GST compliance position carefully after cancellation.
Difference Between GSTR-3A and GSTR-3B
These two forms are frequently confused because of their similar names.
GSTR-3B
GSTR-3B is a GST return used by applicable taxpayers to report tax liability and other relevant information.
GSTR-3A
GSTR-3A is a notice to a return defaulter.
It is not a return.
This distinction is fundamental.
| Particular | GSTR-3A | GSTR-3B |
|---|---|---|
| Nature | Notice | Return |
| Purpose | Notify taxpayer of return default | Report GST liability and relevant details |
| Issued/filed by | GST authorities/system | Taxpayer |
| Related provision | Section 46 and Rule 68 | Section 39 and applicable rules |
| Is it a tax return? | No | Yes |
| Main consequence | Opportunity to comply before further action | Regular GST compliance |
Difference Between Section 46 and Section 47
Section 46 deals with the notice to a return defaulter.
Section 47 deals with late fee for specified delays in furnishing returns and other statements.
They therefore operate differently.
A taxpayer may face:
Section 46 notice + applicable late fee + interest + further proceedings
depending on the nature and duration of the default.
Difference Between Section 46 and Section 62
The difference can be summarised as follows:
Section 46
The taxpayer is formally notified that a required return has not been filed.
Section 62
In specified cases, if the taxpayer continues to fail to furnish the return after the Section 46 notice, the proper officer may proceed with best-judgment assessment.
Therefore, Section 46 generally represents an earlier compliance stage, while Section 62 concerns the subsequent assessment mechanism.
Historical Development of FORM GSTR-3A
FORM GSTR-3A was designed as the notice mechanism for return defaulters.
The form has also been updated over time to reflect changes in the GST return framework.
The official CBIC form contains separate language for:
- failure to file a regular return; and
- failure to file a final return after cancellation.
The GST Council has also discussed extending the form to clearly cover annual-return defaults under Section 44.
This demonstrates how the notice framework has evolved alongside the GST return system.
Practical Example of Section 46
Suppose ABC Traders is registered under GST.
Its applicable return for a particular tax period is due on the prescribed date.
ABC Traders does not file the return.
After the default is identified, a FORM GSTR-3A notice is issued.
The notice requires ABC Traders to furnish the return within 15 days.
ABC Traders prepares its books and determines:
- outward taxable supplies;
- output tax;
- eligible ITC;
- net tax payable;
- interest; and
- applicable late fee.
The company then files the pending return and pays the applicable amounts.
If the return is filed before the assessment order is issued, the prescribed notice mechanism provides for withdrawal of the notice.
This is the intended compliance path.
Example of Continued Default
Now assume ABC Traders receives the GSTR-3A notice but does nothing.
The taxpayer neither files the return nor otherwise resolves the default.
In a case covered by Section 62, the proper officer may proceed with best-judgment assessment based on available information.
The taxpayer may then face a tax liability determined through the assessment process, along with applicable interest and other consequences.
This illustrates why the GSTR-3A notice should be treated seriously.
Common Mistakes About Section 46
Mistake 1: Thinking GSTR-3A Is a Return
GSTR-3A is a notice, not a GST return.
Mistake 2: Ignoring the Notice
Ignoring a Section 46 notice can lead to further proceedings.
Mistake 3: Assuming Cancellation Ends All Returns
Cancellation of registration does not necessarily eliminate pending return obligations.
Mistake 4: Assuming Section 46 Is a Final Tax Demand
Section 46 is primarily a notice requiring filing of the pending return.
Mistake 5: Ignoring Section 62
Continued failure to file after the Section 46 notice can result in best-judgment assessment in applicable cases.
Mistake 6: Confusing GSTR-3A With GSTR-3B
GSTR-3A is a notice, while GSTR-3B is a return.
Mistake 7: Assuming Every Registered Person Must File Every Return
Return obligations depend on the taxpayer’s category and the applicable provisions, rules and notifications.
Section 46 Compliance Checklist
If a taxpayer receives FORM GSTR-3A, the following checklist can be useful:
- Verify GSTIN.
- Verify tax period.
- Identify the return mentioned in the notice.
- Check whether the return is legally applicable.
- Check whether the return was already filed.
- Verify the filing acknowledgement if already filed.
- Prepare the pending return.
- Reconcile books and GST records.
- Calculate tax payable.
- Calculate applicable interest.
- Calculate applicable late fee.
- Pay the required amounts.
- File the return within the notice period.
- Preserve the ARN and payment records.
- Monitor the GST portal for further communication.
Key Points to Remember
The most important points regarding Section 46 are:
- Section 46 deals with notice to return defaulters.
- It applies when a registered person fails to furnish a return required under the applicable GST provisions.
- Section 46 specifically refers to returns under Sections 39, 44 and 45.
- Rule 68 provides the procedural mechanism for issuing the notice.
- The notice is issued electronically in FORM GSTR-3A.
- Rule 68 also covers specified defaults under Section 52.
- FORM GSTR-3A generally gives the taxpayer 15 days to furnish the pending return.
- GSTR-3A is a notice, not a GST return.
- A Section 46 notice should not be confused with a final tax demand.
- Failure to comply can result in further proceedings.
- Section 62 provides for best-judgment assessment of specified non-filers.
- CBIC has clarified the relationship between Section 46 and Section 62 for relevant non-filers.
- The prescribed GSTR-3A form states that the notice is deemed withdrawn where the relevant return is filed before the assessment order is issued.
- Section 46 can be relevant to annual-return defaults where the annual return is required.
- Section 46 can also apply to final-return defaults after cancellation of registration.
- GSTR-10 is the final return associated with Section 45.
- Cancellation of registration does not automatically eliminate pending return obligations.
- Applicable interest and late fee should be considered while filing a delayed return.
- Taxpayers should verify whether a return is legally applicable before treating a notice as valid.
- A taxpayer receiving GSTR-3A should respond promptly rather than waiting for assessment proceedings.
Conclusion
Section 46 of the CGST Act provides an important mechanism for dealing with registered persons who fail to furnish required GST returns. It gives the taxpayer a formal opportunity to comply before further action is taken.
The practical procedure is governed by Rule 68, under which a notice in FORM GSTR-3A is issued electronically to a registered person who fails to furnish specified returns. The prescribed notice generally provides 15 days to furnish the pending return.
Section 46 covers returns under Sections 39, 44 and 45, while Rule 68 also refers to specified defaults under Section 52. Therefore, the provision can become relevant to periodic returns, annual returns and final returns, depending on the taxpayer’s circumstances.
The importance of Section 46 becomes even greater when it is read together with Section 62. In specified cases, continued failure to furnish the return after the Section 46 notice can result in best-judgment assessment based on information available to the proper officer. CBIC has specifically explained this relationship in Circular No. 129/48/2019-GST.
A taxpayer should therefore treat a GSTR-3A notice as an opportunity to correct the filing default promptly. The taxpayer should verify the relevant period, prepare the pending return, calculate applicable tax, interest and late fee, make the necessary payment and file the return within the prescribed period.
In simple terms:
Section 46 creates the notice mechanism, Rule 68 provides FORM GSTR-3A, and continued non-compliance can lead to further proceedings under the applicable assessment provisions.
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