AUTHOT OF THE ARTICLE:GAURAV JAYANT
Several amendments have been made to the GST regime, including changes to the returns. The government implemented GSTR-3B for a limited time, although specifics of GSTR-1 and GSTR-2 were also introduced. It was explained that the system would automatically reconcile the data submitted in Form GSTR-3B with GSTR-1 and GSTR-2, and any differences will be offset against output tax liability or applied to the registered person’s output tax liability in subsequent months.
According to section 37(3) of the CGST Act, any registered individual who has given details under section 37(1) for any tax period and whose details have remained unmatched under section 42 or section 43 of the CGST Act is liable to a penalty upon rectification of any error or omission therein in the manner specified, and pay tax and interest, if any, in case there is a short payment of tax on account of such error or omission, in order to be furnished for such tax period.
Except as provided in the first proviso to section 37(3) of the CGST Act, no rectification of error or omission in respect of the information furnished under section 37(1) of the CGST Act shall be permitted after furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the applicable annual return, whichever is earlier.
It is explained that since the GSTR-3B return does not include provisions for reporting differential figures for previous month(s), the said figures can be published on a monthly basis alongside the values for the current month in relevant tables, such as Table No. 3.1, 3.2, 4, and 5, as applicable.
It should be noted that there can be no negative entries in the FORM GSTR-3B when adjusting the production tax liability or input tax credit. The sum remaining for adjustment, if any, may be changed in subsequent month returns in GSTR-3B, or a refund may be claimed if such adjustment is not possible.
Where multiple-month changes have been made in FORM GSTR-3B, corresponding adjustments in FORM GSTR-1 should ideally be made in the same months.
Common Errors Types in GST Returns:
- Reporting less tax liability than actual liability.
- Liability can be settled in subsequent month returns after interest has been paid. For example, suppose a sales bill was not reported in a particular month; as a result, when the sales sum is added to the current month’s sales, the liability is increased. The above liability, as well as the required interest rate, must be paid. In GSTR 3B, a new sales number, “Outward supplies and inward supplies on reverse charge,” will be added. However, the interest that can be shown in GSTR 3B is not clarified, so only payment can be made.
- If such liability is not settled in GSTR-1 of the concerned month then a taxpayer may settle it off in the subsequent month returns when payment is made for it. It can be reconciled in GSTR-1.
- Reporting more liability then actual liability.
- If modification is not possible, the liability can be changed in the following months or a refund claimed. (If a bill was booked twice or any sales return transactions were skipped to be considered, the current month liability can be changed if possible, otherwise a refund can be sought. Under GSTR 3B, excess sales will be excluded from overall sales from point 3.1, i.e. “Outward supplies and inward supplies on reverse charge.” It should be noted that there can be no negative entries in the FORM GSTR-3B when adjusting the production tax liability or input tax credit.
- If the liability was also over-reported in the previous month’s or quarter’s GSTR-1, it may be modified using the amendments in Table 9 of FORM GSTR-1
- Reporting wrong liabilities
- Unreported liability can be added to the next month’s return, along with any applicable interest. Adjustments can also be made in subsequent month returns, or a refund may be requested if change is not possible.
- Such taxpayers must fill out Table 9 of the following month’s / quarter’s GSTR-1 to request amendments.
- Under-reporting of ITC
- Input tax credit which was not reported may be availed while filing return for subsequent month(s). (Suppose we have missed to consider certain purchases then we can consider the same in subsequent months purchase along with input tax credit available. Under GSTR 3B in point no. 4 i.e. “Eligible ITC” Additional ITC can be added. No, need for any action in GSTR 2 &3 as the same is not effective currently.).
- No action required in GSTR-1.
- Over-reporting of ITC
- Pay (through cash) / Reverse such over reported input tax credit with interest in return of subsequent month (s). (Suppose if we have claimed more input tax credit and also utilized then we need to adjust or pay the same along with the applicable interest amount.)
- No action required in GSTR-1.
- Wrong-reporting of ITC
- Pay (through cash) / Reverse any wrongly reported input tax credit in return of subsequent month(s).
- For under reported input tax credit, the same may be availed in return of subsequent month(s).
- No action required in GSTR-1.
- 7. Cash Ledger wrongly reported ( Only Stage 2 effected)
- Add cash under the right tax head and seek cash refund of the cash added under the wrong tax head. (Suppose if we have deposited IGST into wrong head (i.e. CGST head and SGST head) then we have to deposit CGST and SGST and we can adjust the surplus IGST with future liability or can claim refund.)
- No action required in GSTR-1
The GST Act, 2017 has made Form GSTR-3B the soul of the law, which mandates the filing of returns in GSTR-3B until March, 2018. As a result, properly filing FORM-3B becomes critical.
The inward supplies shall be auto drafted for all registered persons and made available to them in GSTR-2A after the registered individual has filed his return in GSTR-3B and the declaration of outward supplies in GSTR-1. The registered individual must prepare the statement of inward supplies in GSTR-2 based on the information provided in GSTR-2A.
Procedure for making amendments in monthly returns
The common portal will auto-draft Part-A of the return in GSTR-3 for the said month based on the information provided in GSTR-1 and GSTR-2 after the registered individual has submitted the statement of inward supplies in GSTR-2 by the extended date. Based on the revised figures of output tax liability and eligible input tax credit, Table 12 of Part B of GSTR-3 shall be made available. Based on the details provided in FORM GSTR-1 and FORM GSTR-2, the common portal will populate the correct tax payable figures in column (2) of Table 12 of FORM GSTR-3.
The tax paid in the return in GSTR-3B via the electronic cash ledger and electronic credit ledger shall be displayed by the method in column (3) to (7) of Table 12 of Part B of GSTR-3. The tax payable and tax paid in GSTR-3B and GSTR-3 shall be the same if there is no discrepancy between the details of production tax liability and qualifying input tax credit furnished in GSTR-3B and the details furnished in GSTR-1 and GSTR-2. Without making any additional tax payments, the individual may sign and send GSTR-3.
When a registered person’s tax liability under GSTR-3 exceeds what has been paid under GSTR-3B, the portal will show another instance of Table 12 for making additional tax payments, which can be made by debiting the electronic cash or credit ledger, plus relevant interest on late tax payments.
If the eligible ITC claimed by the individual in FORM GSTR-2 is less than the ITC claimed and used by the registered person in FORM GSTR-3B, the difference will be added to his production tax liability and must be paid by him, along with interest, by debiting the electronic cash or credit ledger. If the taxable ITC reported by the taxpayer in FORM GSTR-3B is less than the ITC eligible based on the information given in FORM GSTR-2, the additional amount of ITC will be credited to the registered person’s electronic credit ledger when the return in FORM GSTR-3 is filed.
When the registered person’s output tax liability, as determined by the information provided in GSTR-1 and GSTR-2, is less than his output tax liability, as determined by the information provided in GSTR-3B, and the difference is not covered by a corresponding reduction in the input tax credit to which he is entitled, When the taxpayer signs and submits the return in FORM GSTR-3, the surplus will be carried forward to the next month’s return and offset against the next month’s output liability.
If the input tax credit decreases, it will be offset against the above-mentioned reduction in output tax liability, and the remainder, if any, of the reduction in output tax liability will be carried forward to the next month’s return to be offset against the next month’s output liability. However, if the necessary return in GSTR-3B is filed on or before the due date, no late fees will be charged. The return will be deemed valid until the tax due on FORM GSTR-3 has been paid in full, after which the return will be processed for matching.
When GSTR-3B was submitted, there was no way to change it. Since many taxpayers and professionals were inconvenienced by the freezing of figures after pressing the “Submit” button, the government, in August 2017, introduced a new option called “Preview and Submit GSTR 3B” to help taxpayers by allowing them to preview the data they entered and then “Confirm and Submit.”
In a nutshell, we conclude that there is no revision facility available for GSTR-3B at this time, and the only way to fix it is to use GSTR-1 and GSTR-2 if the figures were incorrectly entered by us when submitting the GSTR-3B. GST Network, on the other hand, anticipates that the editing facility for GSTR-3B returns will be operational by November 21st.