The Ministry of Finance has now declared that any mismatch in the GST monthly sales return and outward supply details should be reported in the annual return form and due taxes should be paid.
In a clarification on annual returns and statement for reconciliation, the ministry said it has received various queries from businesses asking whether the primary source of data for filing the annual return and the statement for reconciliation should be GSTR-1, GSTR-3B or just the books of accounts.
While form GSTR-1 is an account of details of outward supplies (i.e. sales), GSTR-3B is where the summaries of all transactions are declared by the taxpayer himself/herself and payments are made.
The ministry said further that information in form GSTR-1, GSTR-3B, and books of accounts should be synchronous and the values should match across different forms as well as the books of accounts.
But, if due to any reason, the same does not match appropriately, there can be broadly two scenarios, i.e. either the tax was not paid to the government or the tax was paid in excess.
As per the announcement made by the Finance Ministry, “In the first case, the same shall be declared in the annual return and tax should be paid, and in the latter, all information may be declared in the annual return and refund (if eligible) may be applied through Form GST RFD-01A”.
Furthermore, the Ministry added, ITC can’t be reversed or availed through the annual return. If taxpayers find themselves liable for reversing any ITC, they can do so through Form GST DRC-03 separately.
It also said that if a taxpayer has not paid, short paid or has erroneously obtained/ been granted a refund or has wrongly availed or utilized Input Tax Credit then before the service of a notice by any tax authority/GST department, the taxpayer can pay the amount of tax along with interest. In such cases, no penalty will be levied.
The Finance Ministry said further “Therefore, 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. In fact, the annual return provides an additional opportunity for such taxpayers to declare the summary of supply against which payment of tax is made”.
GSTR-9 is the annual return form for normal GST registered taxpayers, GSTR-9A is for composition dealers, while GSTR-9C is a reconciliation statement. The last date for filing annual return is 31st August 2019.