Arjun (Fictional Character): Krishna, many taxpayers are getting emails, stating their aggregate turnover is more than Rs. 5 Cr. during FY 2019-20, or not, considering returns of FY 2019-20 filed upto 25th July, 2020. What is this email about?
Krishna (Fictional Character): Arjuna, GST department computes system based aggregate turnover of the taxpayer, considering the returns filed in Form GSTR-3B by all registrations on the common PAN. They have found the same to be above Rs. 5 Cr. for some taxpayers where returns filed upto 25th July, 2020 have been considered. This email is to be taken very crucially, as now, the reported aggregate turnover will be used for enabling certain validations in the system such as determining due date of return filing, computation of late fee by the system etc.
Arjun (Fictional Character): Krishna, how is Rs. 5 Cr. calculated by the GST Department?
Krishna (Fictional Character): Aggregate turnover of Rs. 5 Cr. is calculated on the basis of GSTR-3B returns filed till the period of FY 2019-20 & FY 2020-21 upto 25/07/2020. For periods of GSTR-3B not filed, turnover shall be calculated on the following basis:
[(Turnover declared/No. of GSTR-3B filed) * No. GSTR-3B liable to be filed] i.e. Average turnover on the basis of filed returns.
Turnover for this purpose shall include taxable supplies, exempt supplies, & Non-GST supplies reported in GSTR-3B of the taxpayer.
Arjun (Fictional Character): Krishna, what should the taxpayer do if he receives this email from the department?
Krishna (Fictional Character): Arjuna, there can be only two scenarios in which the taxpayer could receive this email, and he should deal with it in the following manner :
1. If aggregate turnover as per books of the taxpayer is less than 5 crore, but reported turnover as per GSTR 3B is more than 5 crore :
In this scenario, the taxpayer should first file his pending returns if any, and then assess his actual aggregate turnover, including non-filed period of FY 2019-20. Then if such computation of aggregate turnover results to be less than Rs. 5 Cr., the taxpayer should raise a grievance on the Self Service Portal if GSTN. (i.e. https://selfservice.gstsystem.in) for redressal, with the actual computation to be provided in the given tabular format received with the email.
Such discrepancies can arise due to the following reasons :
i. Turnover of FY 2018-19 is reported in FY 2019-20.
ii. Credit notes of FY 2019-20 is not reported in GSTR-3B.
iii. Wrong figures are reported in GSTR-3B.
2. If aggregate turnover is more than Rs. 5 Cr. and he received the email:
The email is sent to taxpayers having aggregate turnover more than Rs. 5 Cr. to confirm that the correct selection of filing status has been selected. This is to ensure the correct extended due dates as per the Notification No. 52/2020 dated 24.06.2020 and Notification. No. 57/2020-CT dated 30.06.2020 based on criteria of Turnover i.e. 5 crore. has been properly enabled & executed. So no discrepancy, & no need to reply to the email.
Arjun (Fictional Character): Krishna, what shall be the other effects of reporting of turnover through reply of this email?
Krishna (Fictional Character): Arjuna, in case any taxpayer has an aggregate turnover above Rs. 5 Cr., the option of GST Audit & Annual return shall be enabled on his GST portal & vice versa. The same goes for applicability of due dates, late fees & interest of GST returns.
Arjun (Fictional Character): Krishna, what should the taxpayer learn from this?
Krishna (Fictional Character): Arjuna, taxpayer has to be very keen about reporting the turnover, as the due dates, late fees, & interest rates are different for taxpayers below Rs. 5 Cr. & for taxpayers above Rs. 5 Cr. The small taxpayers having turnover below Rs. 5 Cr., have numerous reliefs in due dates, late fees, & interest rates due to COVID-19 pandemic. But, the same is not the case for large taxpayers having turnover above Rs. 5 Cr. as they do not have the same reliefs. It seems, GST department wants to identify large taxpayers & quarantine them!
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