The Finance Ministry issued new clarifications regarding the filing of annual returns under the GST to ease taxpayers’ concerns..
The Ministry clarified that the Central Goods and Services Tax (CGST) Act provides an opportunity for self-correction to all taxpayers in case they have not paid tax on some transactions, or have erroneously been granted a refund.
According to the clarification in cases where some information has not been furnished in the statement of outward supplies in Form GSTR-1 or in the regular returns in Form GSTR-3B, such taxpayers may pay the tax with interest through Form GST DRC-03 at any time. The annual return provides an additional opportunity for such taxpayers to declare the summary of supply against which payment of tax is made.
Another major query among taxpayers was regarding the source of the data that must be furnished in the annual return form. The confusion was whether the data must be sourced from the GSTR-1, GSTR-3B, or the books of accounts.
According to the government, the information in Form GSTR-1, Form GSTR-3B and books of accounts should ideally be synchronous and the values should match across different forms and the books of accounts. If the same does not match, either tax was not paid to the government or tax was paid in excess.
If tax was not paid, it should be declared in the annual return and tax should be paid. In the second case, all information must be declared in the annual return and a refund (if eligible) can be applied for through Form GST RFD-01A. Further, no input tax credit can be reversed or availed through the annual return. If taxpayers find themselves liable for reversing any input tax credit, they may do the same through Form GST DRC-03 separately.
The clarification also sought to ease the concerns of small businesses who were finding it difficult to furnish all the data required in the annual return form.It said that taxpayers are advised to declare all such data “to the best of their knowledge and records” and that this data was only for information purposes and “reasonable/explainable variations in the information reported” would not be viewed adversely.
