GST Department issued Clarifications regarding Issues relating to Incorrect Reporting of GSTR-1 and ITC

The Mumbai Goods and Services Tax (GST) department has issued a clarification about the improper reporting of GSTR-1 and ITC claims.

The guidelines with respect to technical issues pertaining to return scrutiny have been issued by Mumbai GST Department. There are certain legal issues that have arisen in the course of the work of return scrutiny. From an examination of the issues, it is seen that the issues have cropped up due to the bonafide errors committed by the taxpayers in their compliances. Such errors are largely due to a lack of understanding of the provisions of law and issues of the GSTN system in the initial stage (FY 17-18 and 18-19) of implementation of GST.

Hence, in order to clarify the doubts of field officers, the following guidelines are issued. This circular applies to return scrutiny of tax periods 2017-18 and 2018-19.

Issues arising from incorrect reporting of GSTR 1

The proper officers may Obtain the transaction-wise details of outward supplies from taxpayers for the period under scrutiny and reconcile it with category-wise outward supplies reported in GSTR-1 of the corresponding period. Identify the transactions reported in B to B and B to C category.

Figure out the transactions which have been shifted to B to B from its original B to C. Take on record the details of GSTR-1 in which such shifting had been done

Issues arising from ITC claim

The proper officer may in cases where the difference in ITC claim (CGST+SGST or IGST) per supplier is 2.5 Lakh or more ask the claimant to obtain certification from the Chartered accountant of the said supplier certifying the output transactions and tax paid thereon so as to comply with provisions of Section 16.

In cases where the difference in ITC Claim (GSST+SGST+IGST) per supplier is below 2.5 Lakh ask the claimant to obtain ledger confirmation of the concerned supplier along with his/ her certification.

Differences in ITC May be allowed on the Basis of the Above.

In the circular, it is Further Mentioned that these guidelines are clarificatory in nature and be applied as per the facts and circumstances of the cases. These guidelines shall not be used in the interpretation of the provisions of law. The difficulties in the implementation of this circular shall be brought to the notice of this office.

Detailed Circular can be Downloaded from the Below Link.