Nothing is more expensive than a missed opportunity – H. Jackson Brown, Jr.
Month of September, being tax audit season, is always an important month for many of the businessmen and also professionals from Direct taxes point of view. Now, from indirect taxes point of view too, this month is now made critical, not for annual return or audit but return for month/quarter of September is last chance to add/correct/delete/ modify any details of either outward supplies or inward supplies pertaining to previous financial year i.e. any rectifications in the details already furnished in returns of July 2017 to March 2018 may be corrected/added in the return to be filed for the month of September 2018. Details of outward supplies can be modified on or before 31.10.2018 (being due date for filing GSTR 1) and details of inward supplies on or before 20.10.2018 (being due date for filing GSTR 3B). This article focuses on most probable errors in the returns and way to correct them.
1. Invoice pertaining to FY 2017-18 missed in GSTR 1 – The invoice may be added in GSTR 1 along with invoices of September 2018 in Table 4 with original date. If the tax pertaining to invoice is also not paid, the same may be added to taxable value and tax of the month of September, 2018 and pay the tax along with interest from due date of payment of tax till date of actual payment. However, the Annual return format i.e. GSTR 9 does not have a facility to add these type of missing invoices but the most suitable disclosure may be in Part V, Point 10 of Form GSTR 9.
2. B2B Invoice details wrongly entered in GSTR 1 –Here is a case where the invoice details are entered in GSTR 1 but some fields are wrongly mentioned. Some of the situations are:-
These details may be modified in Table 9A, 9B, 9C of GSTR 1. The same may be disclosed in Part V, Point 10 or 11 in GSTR 9.
3. B2C details wrongly entered in GSTR 1–There will be again 2 types of errors in B2C details.
3A. B2B invoice entered as B2C – If an B2B invoice pertaining to month of January 2018 entered as B2C in GSTR 1 of January 2018, this error can be rectified by adding the invoice details in GSTR 1 of September 2018 along with September B2B invoices and amending the B2C supplies of January 2018 using Table 10 of GSTR 1. To correct B2C details of a month,
Step 1 – Select the financial year and month (2017-18 & January, in this case)
Step 2 – Amount of B2C supplies already disclosed in January 2018 return appears
Step 3 – Reduce the B2C amount with the taxable value as per B2B invoice.
Then, B2C details of January 2018 stand corrected.
If the invoice is already declared in GSTR 3B correctly, the liability is not affected and the same needs not be disclosed anywhere in GSTR 9.
3B. B2C Intra-state supplies entered as Inter-state – If B2C supplies of an assessee from the state of Karnataka entered as B2C supplies of Andhra Pradesh i.e. Intra state entered as inter-state, the same may be rectified using Table 10 of GSTR 1. However, if the same error is also continued in GSTR 3B too, the liability may be affected since IGST is paid instead of CGST+SGST. This can be rectified by paying CGST+SGST and claiming refund of IGST. The same needs to be disclosed in Part V, Point 10 of GSTR 9.
3C. B2C Inter-State supplies wrongly entered as different state– If B2C supplies made to Andhra Pradesh was entered as B2C supplies to Telangana by a supplier registered in Odisha; the tax liability doesn’t change but the state mentioned is wrong. This also doesn’t affect the liability but the wrong details needs to be rectified for correct disclosure.
1. Failed to avail ITC– Did you miss claiming ITC on any invoice pertaining to FY 2017-18. No Worries, the same can be claimed upto the month of September 2018. Include the same in GSTR 3B of September 2018 and the ITC can be availed and utilised. These details are to be declared in Point 13 of Part V of GSTR 9.
2. GSTR 2A Vs GSTR 3B – Monthly data of GSTR 2A can be downloaded in Excel format now. Many have been ignoring the reconciliation of ITC as per GSTR 3B with details available in GSTR 2A. This reconciliation exercise should be a continuous process since it is a time consuming one but major outcomes are as under:-
It is appropriate to mention here that minimum requirements for eligibility of invoice to avail ITC have been relaxed recently. The following details are minimum requirements to avail ITC.
3. Excess ITC claimed – There may be situations where excess ITC would have been claimed due to error. For example, instead of entering only tax amount in ITC IGST column in GSTR 3B, amount of purchases may be entered which inflates IGST ITC. The same may be rectified now by reversing the excess ITC availed by entering the amount to be reversed in Table 4(B)(2) of GSTR 3B for the month of September 2018 and the same may be disclosed in Part V Point 12 of GSTR 9.
The situations discussed in the article are the most common issues which are required to be addressed in this September return. Now, one may agree that September month is made crucial even from indirect taxes point of view and hence please be cautious and re visit all the returns filed, reconcile with books of accounts and GSTR 2A and claim the missed ITC and also rectify any errors that were made while filing the returns for FY 2017-18. Happy September return in the month of October.
(Author – CA Vinay Gandhi Billapati, Email- email@example.com)