The Finance Ministry on Wednesday issued a slew of clarifications regarding the filing of annual returns under the Goods and Services Tax (GST) in a bid to ease taxpayers’ concerns. Notable among the clarifications are that taxpayers can still pay tax and interest on items that were not declared earlier, and regarding the source of data that must be provided in the annual return.

The Ministry clarified that the Central Goods and Services Tax (CGST) Act provides an opportunity for self-correction to all taxpayers in case they have not paid tax on some transactions, or have erroneously been granted a refund. “Therefore, in cases where some information has not been furnished in the statement of outward supplies in Form GSTR-1 or in the regular returns in Form GSTR-3B, such taxpayers may pay the tax with interest through Form GST DRC-03 at any time,” the clarification said. “In fact, the annual return provides an additional opportunity for such taxpayers to declare the summary of supply against which payment of tax is made.” Another major query among taxpayers is regarding the source of the data that must be furnished in the annual return form. The confusion is whether the data must be sourced from the GSTR-1, GSTR-3B, or the books of accounts.

“Ideally, information in Form GSTR-1, Form GSTR-3B and books of accounts should be synchronous and the values should match across different forms and the books of accounts,” the government said. “If the same does not match, there can be broadly two scenarios, either tax was not paid to the government or tax was paid in excess.” In the first case, the government said, this should be declared in the annual return and tax should be paid. In the case of latter, all information must be declared in the annual return and a refund (if eligible) can be applied for through Form GST RFD-01A. “Further, no input tax credit can be reversed or availed through the annual return,” the clarification noted. “If taxpayers find themselves liable for reversing any input tax credit, they may do the same through Form GST DRC-03 separately.”

‘Declare data’

The clarification also sought to ease the concerns of small businesses who were finding it difficult to furnish all the data required in the annual return form. It said that taxpayers are advised to declare all such data “to the best of their knowledge and records” and that this data was only for information purposes and “reasonable/explainable variations in the information reported” would not be viewed adversely.

        Source:thehindu