Reetu | Oct 11, 2022 |
ICAI Submits Suggestions on draft Form GSTR-3B to CBIC
The Institute of Chartered Accountants of India (ICAI) considers it a privilege to submit the suggestions on draft Form GSTR-3B to the Central Board of Indirect Taxes and Customs (CBIC).
The GST & Indirect Taxes Committee of ICAI developed an online utility for seeking suggestions from members and other stakeholders on draft Form GSTR-3B. Above 550 suggestions were received from all over India, which were then examined and discussed threadbare by the members of the Committee and experts with a view to submit relevant and useful suggestions to the CBIC. We place on record our gratitude to CA. Shaikh Abdul Samad A, CA. Shankara Narayanan V and CA. Ganesh Prabhu for assisting the Committee in finalizing the proposals.
Para 2 (a) of the instructions contained in Annexure-B of the concept paper mentions that figures will be auto-populated from Table – 4, 6, 8, 11 and proposed Table 14 of FORM GSTR-1 other than row (f) which will be partly auto-populated from GSTR-2B and partly user entry. However, in respect of the proposed Table-14 of GSTR-1, no details have been released in the public domain till date. Therefore, clarification is required on the same.
As per para 2a. of instruction in Annexure-B of concept paper, only figures from Table 4, 6, 8, 11 and proposed Table 14 of GSTR-1 will auto-populated in Table 3 Part-A.
As per para 2b. of instruction in Annexure-B of concept paper, Part B of Form GSTR – 3B would get auto-populated from relevant entries of Table 4, 5 & 7 of GSTR-1. Part B contains details of inter-State Outward Supplies made to unregistered persons, composition taxable persons and UIN Holders out of the supplies declared in Part-A.
Currently, Table 3.2 of existing Form GSTR-3B is only for the purpose of presentation not for addition of tax liability and entries in this table are auto populated from Table 3.1. Table 3 Part B may be considered similar to Table 3.2 of existing Form GSTR-3B. Table 3 Part B does not even contain Central Tax and State Tax column, therefore, it is necessary to include the details from Table No. 5 & 7 of Form GSTR-1 in Table 3 Part-A. Hence, instructions as provided in para 2a and 2b need to be amended accordingly.
Instruction given in para 2a may be changed in a way to include the details being auto-populated from Table No. 7 & Table No. 5 of Form GSTR-1, otherwise the liability of B2C transaction will not be added in Part A and instruction given in para 2b may be changed so that details showing in para B should be auto populated from Table 3 Part A.
CGST & SGST column may be disabled for Rows (b) & (c) of Table-3 Part A as exports are treated as inter-State supply and IGST is applicable in case of export as well as supplies made to SEZ unit or SEZ developer.
CGST, SGST & CESS column may be disabled for Rows (f) (1) of Table-3 Part A as imports are treated as inter-State supply.
As per the draft Form GSTR – 3B, inward supplies (liable to reverse charge) other than the import of services are required to be reported in row (f) (2) – Others. However, the person supplying services can be registered as well as unregistered. Therefore, this field may be divided into following fields:
a. Registered Supplier
b. Supplies specified u/s 9(3) by Unregistered Supplier
c. Notified Supplies specified u/s 9(4) by Unregistered Supplier
The details of the procurement from the unregistered suppliers, which are liable for RCM may be allowed to be entered manually, as the same cannot be captured from GSTR-2B.
Example – Unregistered Supplier –supplies specified u/s 9(3):
Services of Goods Transport Agency supplied by an unregistered person to the specified person comes under reverse charge mechanism. This procurement will not get auto populated in Form GSTR 2B, since the supplier is not registered under GST. Hence, registered person should be allowed to fill these particulars separately in his returns and also prepare the self-invoice as obligated in section 31 of the CGST Act, 2017.
Example – Unregistered Supplier – notified supplies u/s 9(4):
As per Notification No. 07/2019 C.T. (Rate) dated 29.03.2019 tax on the supplies of goods or services or both from an unregistered supplier is payable on a reverse charge basis by a promoter for the construction of project as per section 9 (4) of the CGST Act, 2017.
This procurement will not get auto populated in Form GSTR 2B, since the suppliers are not registered and have not filed Form GSTR 1. Hence registered person should be allowed to fill these particulars separately in his returns and also prepare the self invoice as obligated in section 31 of the CGST Act, 2017.
The details relating to the registered supplier may be auto-populated from GSTR – 2B. The registered suppliers who provide taxable services or goods or both, which are liable to RCM, are supposed to report these transactions in Table 4B of Form GSTR-1. However, it is generally seen that some of the suppliers either do not report their outward invoices in Form GSTR – 1 under “Reverse Charge Applicable” or they report it under the tax rate of 0%. This results in no tax pay-out as the tax liability does not appear in Form GSTR 2B of the recipient.
Currently, figures are auto-populated from Form GSTR – 2B, and Form GSTR – 3B is system generated. Hence to comply with the provisions of the law the recipient is forced to change the auto-populated values. These changes are highlighted by marking the row with red colour and a warning message is displayed for the difference in data. Moreover, it can also be a parameter for scrutiny proceedings.
Hence, the registered recipient should be permitted to report the values without any warning message.
Instruction contained in Annexure – B of the concept paper at Para No. 2 (a) mentions that any Debit/ Credit Note issued in the current tax period will not be considered in Table 3 Part-A. Para No. 2 (c) (i) proposes to include the same at Table 3 Part-C row (a) of draft Form GSTR-3B which includes amendment made in the Statement of Outward Supplies relating to details furnished in Part-A in earlier tax period.
However, the same appears to be an incorrect position for the reason that Credit or Debit Notes issued in accordance with the provisions of section 34 of CGST Act, 2017 are not an amendment made in the outward supplies but the same are either an addition to tax payout or reduction in tax payout on account of the reasons as specified in section 34(3) and section 34 (1) respectively of CGST Act, 2017 and accordingly it should form part of Part-A only.
Therefore, separate row may be added in Part A for debit note and credit note which will capture debit note and credit note relating to taxable supply/ exempted supply/ nil-rated supply/ non- taxable supply.
The Advances received/ Advances adjusted in the current tax period may be split into 2 rows:
1. Advance Received
2. Advance Adjustment
The reason for the same is advances received and advances adjusted should not be mixed-up as both are different nature of transaction. These are also reflected separately [Table 11A- Advance Received & Table 11B- Advance Adjustment] in Form GSTR -1. It should also be dealt separately in GSTR-3B. However, as per draft Form GSTR-3B, these are required to be shown in one row by netting off.
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