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​CORRECTIONS IN GST RETURNS FILED

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  • We have seen several changes in the GST regime, including changes made under returns. The Government brought GSTR-3B (i.e. a summary return) for a short period of time, while FORM GSTR-1 and FORM GSTR-2 were also introduced for detail. It has been clarified that the system will automatically reconcile the data submitted in FORM GSTR-3B with FORM GSTR-1 and FORM GSTR-2, and the variations if any are either offset against output tax liability or added to the registered person's output tax liability for the subsequent months.
  • Pursuant to section 37(3) of the CGST Act, any registered person who has furnished the information pursuant to section 37(1) for any tax period and who has remained unmatched pursuant to section 42 or section 43 of the CGST Act shall, upon identification of any error or omission therein, rectify such error or omission as may be prescribed, and pay tax and interest, if any, in the event of a short payment.
  • Provided that no correction of error or omission in respect of the details provided pursuant to section 37(1) of the CGST Act is permitted after the return pursuant to section 39 is furnished for the month of September following the end of the financial year to which those details relate, or the furnishing of the corresponding annual return pursuant to section 37(3) of the CGST Act, whichever is earlier.
  • Department released a comprehensive Circular No. 26/26/2017 = GST dated 29-12-2017 providing guidance for correcting errors in GSTR-3B filing.
  • It is clarified that as the return in FORM GSTR-3B does not contain provisions for reporting differential figures for past month(s), the said figures may be reported in appropriate tables on n et basis along with the values for the current month itself. As the case may be, Tables No. 3.1, 3.2, 4 and 5.
  • It must be noted that there can be no negative entries in the FORM GSTR-3B when making changes in the production tax liability or input tax credit. The residual amount for adjustment, if any, may be changed in the subsequent month(s) return(s) in FORM GSTR-3B and refund may be sought in cases where such adjustment is not feasible.
  • Where adjustments have been made in multiple months FORM GSTR-3B, the corresponding adjustments in FORM GSTR-1 should also be made in the corresponding months preferably.
  • Faults on GSTR-3B:
  • Link Inhalts
  • -- Faults on GSTR-3B:
  • -- Types of common errors in GST returns:
  • -- 1.1. Tax Liability Sub-report (Return filed)
  • -- 2. 2. Overstatement of Liabilities
  • -- 3.3. Failure to report Liabilities
  • — 4. ITC under-report
  • -- Five. ITC over-report
  • — 6. ITC False Reporting
  • -- 7.- 7. Cash Ledger stated wrongly (only stage 2 had been completed)
  • GSTR-3B return filing is a four step process – Stage 1 – Confirmed Submission, Stage 2 – Updated Cash Ledger. Stage 3-Responsibility Offset, Stage 4-Return filed. Before we discuss the errors, we need to know the stage at which we wish to correct or modify the data in GSTR 3B
  • The return is only editable for Stage 1 and Stage 2. The return is not editable for stage 3 and stage 4.
  • In that case, the change can only be made in return for next month, because after filing there is no provision to alter the GSTR-3B return.
  • So if the errors are known before offsetting and filing then the same can be corrected by editing the respective liability side / input side etc. but on the other hand if the errors are known after the offsetting and return filing then in this case we have to do the following as indicated by the circular:
  • Types of common errors in GST returns:
  • 1. Tax Liability Sub-report (Return filed)
  • -- Liability can be applied at the later month(s) after interest payment. (Suppose in a given month some sales bill is missing to be reported and because of this while adding this sales amount to current month sales, liability will also be increased. Such liability will have to be paid together with the appropriate interest amount. Under GSTR 3B additional sales figure will be added under point 3.1 i.e. 'Outward supplies and inward supplies on reverse charge.'
  • -- If such liability has not been stated in the FORM GSTR-1 of the month / quarter concerned, the liability may be declared in the FORM GSTR-1 for the following month / quarter in which payment was made. (The tax liability may be reconciled with the interest deemed in GSTR 3B with GSTR 1 data).
  • 2. Overstatement of Liabilities
  • -- Responsibility can be changed in exchange for subsequent months or compensation may be sought where it is not feasible to change. (Supposing that a bill has been booked twice or that some sales return transactions have been missed, the same can be adjusted with the current month's liability if otherwise feasible reimbursement can be claimed. Under GSTR 3B, over the reported sales figure, the total sales figure (if feasible) will be deducted from point 3.1 i.e. 'Outward deliveries and inward reverse supplies'). It should be noted that there can be no negative entries in the FORM GSTR-3B when making changes in the production tax liability or the input tax credit.
  • -- Where the liability has already been stated over in the month / quarter FORM GSTR-1, that liability can be modified by amending the provisions of Table 9 of FORM GSTR-1.
  • 3. Failure to report Liabilities
  • -- Unreported liability may be added with interest, if applicable, on next month 's return. Adjustment can also be rendered in exchange for subsequent months or refund can be sought where it is not feasible to adjust. (Interstate liability was assumed to have been shown as intrastate liability or liability with a low tax rate. Interstate liability or balance tax liability must then be paid and earlier intrastate tax may be adjusted later or may be claimed as refund).
  • -- These taxpayers shall file amendments by filling out FORM GSTR-1 in Table 9 of the following month / quarter.
  • 4. ITC under-report
  • -- Input tax credit that was not reported may be used for subsequent month(s) when filing returns. (Suppose we missed to consider some purchases then we can consider the same in subsequent months purchase together with input tax credit available. Under GSTR 3B in point 4 i.e. "Eligible ITC" Additional ITC may be added. No, need for any action in GSTR 2 & 3 as the same is not currently effective.).
  • -- GSTR-1 needs no intervention.
  • 5. ITC over-report
  • -- Pay (by cash) / Reverse that over reported input tax credit with interest in return for the following month(s). (If we have received and used more input tax credit, we will adjust or pay the same amount along with the relevant interest rate.)
  • -- GSTR-1 needs no intervention.
  • 6. ITC False Reporting
  • -- Pay (by cash) / Correct any input tax credit that is mistakenly recorded in exchange for the following month(s).
  • -- For input tax credit registered, the same may be invoiced in return for the following month(s).
  • -- GSTR-1 needs no intervention.
  • 7. Cash Ledger stated wrongly (only stage 2 had been completed)
  • -- Add cash under the appropriate tax head and claim cash compensation of cash added under the incorrect tax head. (Suppose we have deposited IGST in the wrong head (i.e. CGST head and SGST head) then CGST and SGST have to be deposited and we can adjust the surplus IGST with future liability or claim refund.)
  • -- No action necessary under GSTR-1
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