The mismatch could have been due to retrospective changes or other reasons, but the positive side is that the businesses will be allowed to make changes.
As India Inc is almost a month shy from filing the first Goods and Services Tax (GST) annual returns – GSTR 9 form, the government has proactively come out with clarifications on the queries raised by the industry on the same.
Businesses were confused on the mismatch between the automated data (provided by GSTN based on returns filed) and the entry in the books of accounts or return for the purpose of filing annual return for FY18. The government clarified that the taxpayers should report on the latter i.e. books of accounts or returns filed during the financial year. The mismatch could have been due to various reasons, but the positive side is that the businesses will be allowed to make changes.
As per the clarification: One common challenge reported by taxpayer is where details may have been missed in GSTR-1, detailed outward supply return but tax was already paid in GSTR-3B, summary return and therefore taxpayers see a mismatch between auto-populated data and data in GSTR-3B.
The disclosure for the taxpayer should be made with respect to GSTR-3B, and other adjustments can be made in subsequent table. Further, an outward supply which was not declared by the registered person in either GSTR-1 and GSTR-3B can also be declared in the annual return form.
“…timing of supplies (for reporting purposes) would depend as to when was the GST paid via GST-3B,” said Pratik Jain, Partner and National Leader – Indirect Tax at PwC feels that this clarification has come timely, before the filing of GSTR-9 and GSTR-9C which is June 30, 2019.
Another highlight of this clarification was on the Integrated-GST (IGST) front. For example: The import of goods in March 2018, the delivery to the factory was late by a month, and the credit was then claimed in April 2018. Due to a change in financial year, the credit was availed in FY19, but annual return may show a lapse due to the algorithm coded in it (which was based on actual payment of IGST in the month of March 2018).
Many taxpayers claimed that there was no row to fill in credit of IGST paid at the time of import of goods but availed in the return of April 2018 to March 2019.
As the companies were correct in claiming the input tax credit (ITC), and GSTR 9 showed lapse, an option has been provided to report ITC availed in FY19 on which IGST was paid in FY18.
“Clarifications on aspects like lapsing of credits claimed in FY19 on goods imported in FY18, basis for disclosures made in specific tables of the annual return should help resolve ambiguities of businesses on the precise disclosures to be made in the soon due annual return,” said Abhishek Jain, Partner, EY.
It has also been clarified that in order to determine when the supply has to be reported, it has to be seen as to when was the tax paid in GSTR-3B. If tax on supply was paid through form GSTR-3B between July 2017 and March 2018 then such supply shall be declared in point II of GSTR-9. (Details of outward and inward supplies made during the financial year) .
On the other hand, if the tax was paid through GSTR-3B between April 2018 and March 2019 then such supply should be declared in point V of GSTR-9 (transactions for the FY 17-18 declared in FY 18-19).
An outward supply which was not declared by the registered person in either GSTR-1 and GSTR-3B should be declared in point II of GSTR-9.
Such additional liability should be computed and the gap between the “tax payable” and “paid through cash” column of GSTR-9 should be paid through DRC-03 (a payment form where taxpayers can pay the tax by raising its liability voluntarily or in response to the show cause notice (SCN) raised by the department).
Additionally, the payments made through DRC-03 for any supplies between July 2017 and March 2018 period will not be accounted for in GSTR-9 but should be reported during reconciliation in GSTR-9C (reconciliation statement).
The other points that the release mentioned are the information in GSTR-2A as on May 1, 2019 which will be auto-populated. ITC on inward supplies shall be declared from April 2018 to March 2019 in Table 8C .
Jain of PwC pointed out, “Industry has represented that in view of many ambiguities (some of them have now been clarified), the due date for filing the return and audit report should be extended by at least three months. It remains to be seen if this issue is picked up in the upcoming GST council meeting.”
Source : https://cfo.economictimes.indiatimes.com/news/govt-clarifies-industry-confusions-over-correct-filing-of-gstr-9/69652478