Large Taxpayers now Quarantined!

Arjun (Fictional Character): Krishna, many taxpayers are getting notices, stating their aggregate turnover is more than Rs. 5 Cr. during FY 2019-20, considering returns of FY 2019-20 filed up to 25th July 2020. This is giving rise to discrepancies in deciding the actual turnover of the taxpayer. What is this issue about?

Krishna(Fictional Character): Arjuna, GST department computes system based aggregate turnover of the taxpayer, considering the returns filed in Form GSTR-3B by all registrations on the common PAN. They have found the same to be above Rs. 5 Cr. for some taxpayers where returns filed up to 25th July 2020 have been considered. There can be three cases arising out in such a situation. First - aggregate turnover of a taxpayer is less than Rs. 5 Cr. Second – aggregate turnover of a taxpayer is greater than Rs. 5 Cr. Third case, where Aggregate Turnover as per books is less than 5 crore, but reported turnover as per GSTR 3B is more than 5 crore. This notice is to be taken very crucially, as now, the reported turnover will be used for certain validations in the system such as determining due date of return filing, computation of late fee by the system. The taxpayer can also use the same for reporting interest on delayed payments based on a self-assessment basis. Let us discuss these issues in detail.

Arjun (Fictional Character): Krishna, what should the taxpayer do if his aggregate turnover is less than Rs. 5 Cr. and he received such notice?

Krishna(Fictional Character): Arjuna, the taxpayer should firstly file the pending returns if any, latest return till 25/07/2020. Then, if actual computation results to be less than Rs. 5 Cr., the taxpayer should raise a grievance on the Self Service Portal if GSTN. (i.e. https://selfservice.gstsystem.in) for redressal, with the actual computation to be provided in the given tabular format received with the notice. Here, aggregate turnover means the actual aggregate turnover, as per GSTR-3B, and not estimated criteria.

Arjun (Fictional Character): Krishna, what should the taxpayer do if his aggregate turnover is more than Rs. 5 Cr. and he received such notice?

Krishna(Fictional Character): Arjuna, the notice is sent to taxpayers having aggregate turnover more than Rs. 5 Cr. to confirm that the correct selection of filing status has been selected. This is to ensure the correct extended due dates as per the Notification No. 52/2020 dated 24.06.2020 and Notification. No. 57/2020-CT dated 30.06.2020 based on criteria of Turnover i.e. 5 crores. has been properly enabled & executed.

Arjun (Fictional Character): Krishna, what should a taxpayer do in case, Aggregate Turnover as per books is less than 5 crore but reported turnover as per GSTR 3B is more than 5 crore?

Krishna(Fictional Character): Arjuna, such discrepancies can arise due to the following reasons :

i. Turnover of FY 2018-19 is reported in FY 2019-20.
ii. Credit notes of FY 2019-20 are not reported in GSTR-3B.
iii. Wrong figures are reported in GSTR-3B.

In such cases, the taxpayer should raise a grievance on the Self Service Portal if GSTN. (i.e. https://selfservice.gstsystem.in) for redressal, with the actual computation to be provided in the given tabular format received with the notice (as per books). Here, aggregate turnover means the actual aggregate turnover, as per GSTR-3B, and not estimated criteria.  

Arjun (Fictional Character): Krishna, what shall be the effects of reporting of turnover through the reply to this notice?

Krishna(Fictional Character): Arjuna, the option for GST Audit & Annual return that is required to be filed, shall now be enabled on the GST portal on the basis of this turnover. In case any taxpayer has an aggregate turnover above Rs. 5 Cr., the option of GST Audit & Annual return shall be enabled on his GST portal & vice versa. The same goes for the applicability of due dates, late fees & interest of GST returns.

Arjun (Fictional Character): Krishna, what should the taxpayer learn from this?

Krishna(Fictional Character): Arjuna, the taxpayer has to be very keen about reporting the turnover, as the due dates, late fees, & interest rates are different for taxpayers below Rs. 5 Cr. & for taxpayers above Rs. 5 Cr. The small taxpayers having turnover below Rs. 5 Cr., have numerous reliefs in due dates, late fees, & interest rates. But, the same is not the case for large taxpayers having turnover above Rs. 5 Cr. as they do not have the same reliefs. They are as if put to quarantine punishment by the GST department.