GSTR -1 VS 3B

[giri gattupalli]

respected sir ,

dealers are getting GSTR-1 VS GSTR-3B notices frequently in these days. excess declaration of out put tax in FORM GSTR-1, when compared to GSTR-3B is giving scope to issuing of notices by proper officer. in this scenario i like to know some valid points from our group eminent minds.

1. as per GST ACT-2017 whether Form GSTR-1 got more leagal weight or GSTR-3B. in this regard ,if there is any rule or circular or judgement or some thing available , please share.

2.is there any time limitation for making amendments to FORM -GSTR-1 ,to reduce excess liability which is wrongly declared.

3.whether submission of audited profit & loss account is enough to establish genuinity of our net-sales declared in form GSTR-3B

4.as our turnover is below two crores , FORM --GSTR-9 is optional and we have not filed for FY 2019-20. if not filed as per provisions it is deemed to be filed... and now we have received notice for excess declaration of out put tax in dec-2019. but we filed audited statement with income tax department with actual turnover of books of accounts which tally with FORM GSTR-3B filed..

please discuss and guide me with participation in discussion

thanking you

giri

[KASTURI SETHI]

Question-wise reply is as under :-

1..Both returns are integrally correlated. Both must match as per books of accounts.

2.Yes.

3. No. During audit, I have detected short-levy and non-levy from audited Balance Sheets (including P & L Accounts) while comparing/verifying with books of accounts.

4. You will have to justify the difference between both returns to the GST Department despite having accepted the figures mentioned in GSTR 3B by the Income Tax Department. Income Tax return is not a statutory record. Books of accounts are a statutory records.You cannot get any relaxation from GST Department on the basis of assessed ITR.

[Amit Agrawal]

Even though there are many grounds to defend such liabilities and one needs to submit as much supporting evidences as possible, please allow me to give you some more pointers:

A. W.r.t. your question No. 3, in addition to audited annual statements, ITR etc., I would suggest to submit a supporting certificate from practicing chartered accountant, based on checking your books of accounts, certifying value of supply as well as tax-liability for material month under dispute (i.e. Dec, 19) as well as for whole FY (then, link it with all GSTR-3B for the FY) and annual statements.

B. I also suggest to quote & rely on Section 39 (1) which reads as follows:

"39. 7[(1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars, in such form and manner, and within such time, as may be prescribed:

...................."

B1. And then, explain, how you have mentioned 'correct' turnover as well as tax-payable in the return (i.e. GSTR-3B) furnished u/s 39.

B2. And then, explain, how you have corrected your mistakes made in furnishing details of outward supplies u/s 37 (i.e. GSTR-1) while filing return u/s 39 (i.e. GSTR-3B).

C. You can quote and reply on Section 59 which states that 'Every registered person shall self-assess the taxes payable under this Act and furnish a return for each tax period as specified under section 39.'

C1. Return u/s 39 is Form GSTR-3B & not Form GSTR-1 and there in GSTR-3B, you have self-assessed tax-payable correctly and shown the same as required u/s 59.

These are strictly personal views of mine and the same should not be construed as professional advice / suggestion.

[giri gattupalli]

thank you sir, giving valuable advice.

[Amit Agrawal]

You are welcome!

I would suggest to combine my views with Shri Kasturi Sethi Ji's views and prepare your reply with supporting evidences to defend yourself effectively & comprehensively.

We are lucky to have Shri Kasturi Sethi Ji's views as it - besides giving legal pointers - also gives us Department's perspectives as well. It is always better have this perspective as well in mind - while defending any case - instead of solely relying on self-defending arguments.

These are strictly personal views of mine and the same should not be construed as professional advice / suggestion.

AI Summary

Return self-assessment: GSTR-3B treated as self-assessed tax return requiring reconciliation of GSTR-1 discrepancies with supporting evidence. Both returns must reconcile with statutory books of account; GSTR-3B is the self-assessed monthly return reflecting tax payable and is the operative statement for liability. Audited financials and ITR are not automatically sufficient to establish GSTR-3B figures; taxpayers should amend GSTR-1 where appropriate, justify differences to the tax department, and submit supporting evidence including a CA certificate verifying supply values and tax liability.