CMP 08 and Annual return

[Sudhir Kumar]

The department has issued a notice to my client for short payment of GST in CMP-08 in comparison to the GST liability declared in annual return GSTR-4 for the period 2019-20. My query is whether declaring excess liability in annual return GSTR-4 that of the CMP-08 is liable for any action for recovery under section 73. Have there any short payment at the end of the taxpayer? Please.

[Shilpi Jain]

Mere difference in CMP-08 and GSTR-4 should not lead to liability. You need to find out the reason for the difference and if it is due to any error in disclosure and there has actually been no supply on which GST has been missed to paid then mere difference should not lead to liability

[KASTURI SETHI]

The notice is  NOT FINAL as it is subject to your justification of difference with your books of account and other documentary evidence.  

[Padmanathan KV]

Dear Sudhir Kumar sir,

What was the reason for difference between GSTR-4 and CMP-08? was it a clerical error in GSTR-4? or was there actual short payment which was corrected in GSTR-4? also check whether any amounts have been paid via DRC-03. 

AI Summary

Client Faces GST Discrepancy Issue: Investigate Causes Before Recovery Action Under Section 73 for Short Payment. A notice was issued to a client for short payment of GST in CMP-08 compared to the declared liability in the annual return GSTR-4 for 2019-20. The query is whether this discrepancy could lead to recovery action under section 73. Responses suggest that a mere difference does not automatically result in liability unless it stems from an error. It is advised to investigate the cause of the discrepancy, whether it was a clerical mistake or an actual short payment, and to substantiate the difference with documentary evidence. Additionally, checking if any payments were made via DRC-03 is recommended.