It has been a year since the rollout of GST in India. Time has come for taking stock of transaction undertaken during the period July 2017 to March 2018 and take corrective action for mistakes/omissions that may have crept during the said period
In terms of statutory provisions under Section 39(9) of the CGST Act, 2017 any errors, omission, mistakes or incorrect particulars noticed (other than as a result of scrutiny, audit, inspection etc. by tax authorities) needs to be rectified on or before the due date of filling return for the month of September following the end of the said financial year.
We have captured certain common and inadvertent mistakes requiring urgent attention in the current month.
Invoices/Debit notes not reported in returns:
The chances of invoices/Debit notes issued during the period July 2017 to March 2018 not being declared are remote but not impossible. In the event any invoice pertaining to July 2017 to March 2018 is not reported during the respective months in the GSTR 1 or GSTR 3B returns, the same needs to be declared in the month of September 2018 and tax liability on the same needs to be discharged accordingly failing which credit availed by recipient may be questioned. Following situations can be visualized wherein such details are not reported
Invoice/Debit note not declared in either GSTR 1 or GSTR 3B return:
The same needs to be declared in both the returns for the month of September 2018 and tax needs to be paid along with interest
Invoice/Debit note declared in GSTR 1 but not declared in GSTR 3B:
The same needs to be declared in GSTR 3B for the month of September 2018 and tax needs to be paid along with interest
Invoice/Debit note declared in GSTR 3B but not declared in GSTR 1:
The same needs to be declared in GSTR 1 in the return for the month of September
Further, please advise the recipient to avail Input Tax Credit in on said invoices in his GSTR -3B return for the month of September 2018 in the event it has not been availed earlier.
Mistakes in B2B invoices reported in GSTR 1 return:
Mistakes in reporting various contents of B2B invoices in the appropriate fields of GSTR 1 return such as
- Mentioning wrong GSTIN of the recipient thereby resulting such invoices not visible in GSTR 2A of the recipient and credit being passed to incorrect recipient
- Capturing wrong taxable value, tax rate or tax amount thereby resulting in short payment /excess payment of tax:
- Place of supply captured incorrectly thereby reporting inter-State supply as intra-State supply or vice versa or inter-State supply pertaining to particular state captured as inter-State supply of a different state thereby resulting in benefit of tax accruing to the incorrect state
- B2B invoices shown in B2C table thereby resulting in loss of credit to the recipient
Mistakes in B2C invoices:
- Similar to case of B2B invoices, in case of B2C invoices also capturing wrong taxable value, tax rate or tax amount may have happened resulting in short payment/excess payment of tax
- Place of supply captured incorrectly thereby reporting inter-State supply as intra-State supply or vice versa or inter-State supply pertaining to particular State captured as inter-State supply of a different State thereby resulting in benefit of tax accruing to incorrect state
Credit notes in respect of B2B/B2C invoices:
Credit notes for reduction of liability on account of various factors such as sales return, deficient supply, tax charged, or taxable value considered is in excess of the actual taxable value or tax charged needs to be issued latest by the month of September for any invoices or debit notes issued during the month of July 2017 to March 2018. In the event the same is not done by the month of September 2018 the tax payer cannot reduce the tax liability towards such supply. Please note that such reduction from output liability is permitted only if the recipient has reduced corresponding ITC availed on such supply
Other Miscellaneous mistakes:
Other than above-mentioned mistakes there are miscellaneous mistakes which are correctly captured in GSTR-3B return for discharging the liability for respective month liability, but it had been skipped while declaring in GSTR-1 return. Some other mistakes that can creep in are adjustment of advances received not done against supplies made, cancellation of supply, refund of advance, wrong of place of supply for advances etc.,
In view of the above taxpayers are advised to do all required rectification of such errors and omissions for the period July 2017 to March 2018 in the GSTR 1 and GSTR 3B returns for the month of September 2018
Please note due date of the GSTR-1 for the period from July 17 to September 18 has been extended till 31 October 2018 and there is no late fee for the same. However, it is advised that errors in GSTR 1 and GSTR 3B may be rectified latest by 20th October in which case eligibility of credits etc. may not be questioned.
DISCLAIMER: The views expressed are strictly of the Optitax’s Consulting LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. firm and its affiliates shall not accept any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon