GSTR 9 Audit incase of GTA service provider

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A GTA service provider is facing challenges filing their GSTR 9 for FY 2018-19 due to a significant difference between sales reported in GST returns (based on billing) and their Income Tax Profit & Loss account (based on cash receipts). The difference arises from exempt transportation services. The user is seeking advice on how to reconcile these figures and whether their cash-based accounting for Income Tax is appropriate, especially as they are under tax audit and considering revising their Income Tax return.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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29 October 2020 Dear Sir,

I am filing GSTR 9 of my client for FY 2018-19 who is into the business of providing GTA services and he is exempt from paying GST on transportation.

But while filing income tax return Sales amount in Profit and Loss account was shown on receipt basis as per bank entries whereas Sales shown in GST returns were shown on the basis of actual bills made during the whole financial year. This has resulted in huge difference in Sales amount shown in Profit and loss account and Sales shown in GST returns for F.Y. 2018-19.

How can I resolve this issue. The difference between GST sales and Income tax Sales is 3 crore.

There is no GST liability on this 3 crore amount as it comes under exempt supply. Is it the right way of maintaining accounts incase of Transporters under Income tax.

Please help me regarding this matter.

Regards,
Divyesh Jain

Lekhraj sood

Lekhraj sood (Expert)
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29 October 2020 The books of accounts are to be maintained on accrual basis. In GSTR9 you have to show based on invoicing,in my view.If 9C is applicable then you can explain the difference there.
You may have to revise your Income Tax return.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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30 October 2020 But is it possible to revise Income tax return for F.Y. 2018-19 now if the person is under tax audit?

Lekhraj sood

Lekhraj sood (Expert)
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30 October 2020 Yes you could file the revised return by 31st March 2020.However,this time you may take the benefit of covid relaxations. Please consult a professional for a proper advice depending upon the facts of your case.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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30 October 2020 Ok, But in my case I checked the Books of Accounts are kept on Cash basis. Hence Sales is shown as Amount received in bank during F.Y. 2018-19.

What will be the implication of GST Sales in such case. In GSTR-1 I have filed the returns based on the bills booked during that year

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