From Jan 1, GST officials can directly recover for mismatch in sales in GSTR-1, 3B
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From Jan 1, GST officials can directly recover for mismatch in sales in GSTR-1, 3B

By Jessica

New Delhi: Come January 1, GST officers can directly initiate recovery action against errant businesses that show higher sales in monthly return GSTR-1 but under-report it while tax payment in GSTR-3B.

The move will help curb the menace of fake billing whereby sellers would show higher sales in GSTR-1 to enable purchasers to claim input tax credit (ITC), but report suppressed sales in GSTR-3B to lower GST liability.

Under the goods and services tax law, so far, show cause notices were first issued and then recovery process was initiated in such cases of mismatch in GSTR-1 and GSTR-3B.

The government had brought in this change as part of the Finance Act, passed by Parliament earlier this year. The Central Board of Indirect Taxes and Customs (CBIC) on December 21 notified January 1, 2022, as the date on which this provision unde GST law would come into effect.

Through the Finance Act, the government inserted an explanation in sub-Section(12) of Section 75 of CGST Act, to clarify “self-assessed tax” shall include the tax payable in respect of outward supplies furnished in GSTR 1 but not included in the return furnished in GSTR-3B.

Section 75 of GST Act states where there is any self-assessed tax, then it can be recovered without issuing show cause notice and the recovery proceedings under Section 79 can be directly invoked.

AMRG & Associates Senior Partner Rajat Mohan said this is a “draconian provision” giving the exclusive powers to GST department to initiate tax recovery proceedings wherein a short liability reported in GSTR-3B than that appearing in GSTR-1.

For businesses now, it is imperative that GSTR -3B and GSTR-1 should match with each other, and no differences should be permitted in the same irrespective of the reasons. Also Read: SBI invests Rs 100 crore in JSW Cement to pick minority stake

“This new change may arrest one significant part of fake billers, however, misuse of such wide provisions by field officers could not be ruled out,” Mohan added. Also Read: Monster.com raises Rs 137.5 crore from Mohandas Pai, others to invest in product, marketing

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