Contributed by CA. Anil Gupta
1. What is the purpose of returns?
a) Mode for transfer of information to tax administration;
b) Compliance verification program of tax administration;
c) Finalization of the tax liabilities of the taxpayer within stipulated period of limitation; to declare tax liability for a given period;
d) Providing necessary inputs for taking policy decision;
e) Management of audit and anti-evasion programs of tax administration.
2. Who needs to file Return in GST regime?
Ans. Every registered taxable person who crosses the threshold limit for payment of taxes. There are some other class of persons who need to be registered and therefore will have to file returns like interstate suppliers, TDS deductors, composition dealers, e commerce operators, suppliers supplying goods through e-commerce operators etc. [Section 34 (1) of the CGST/SGST Act.]
3. What type of outward supply details are to be filed in the return?
Ans. A normal registered taxpayer has to file the outward supply details in GSTR-1 in relation to various types of supplies made in a month, namely outward supplies to registered persons, outward supplies to unregistered persons (consumers), details of Credit/Debit Notes, zero rated, exempted and non-GST supplies, exports, and advances received in relation to future supply. [Section 32(1) of SGST/CGST Act]
4. Whether all invoices will have to be uploaded?
It depends on whether B2B or B2C plus whether Intra-state or Inter-state supplies.
For B2B supplies, all invoices, whether Intra-state or Interstate supplies, will have to be uploaded. Why So? Because ITC will be taken by the recipients, invoice matching is required to be done.
In B2C supplies, uploading in general may not be required as the buyer will not be taking ITC. However still in order to implement the destination based principle, invoices of value more than Rs.2.5 lacs in inter-state B2B supplies will have to be uploaded.
For intra-state invoices below Rs. 2.5lacs and all intra-state invoices, state wise summary will be sufficient. Refer Specimen of GSTR-1 Sln.6
5. Whether description of each item in the invoice will have to be uploaded?
In fact description will not have to be uploaded. Only HSN code in respect of supply of goods and Accounting code in respect of supply of services will have to be fed. The minimum number of digits that the filer will have to upload would depend on his turnover in the last year. Source
6. What is HSN code?
Ans. Harmonized System Nomenclature (HSN) is an internationally standardized system of names and numbers to classify traded products. These codes are basically used to fix rate of tax on various products at the time of export and import.
In Indian context it is proposed to use HSN codes at invoice level to make the Indian taxation system of international standard. Under GST supply invoices will be made by capturing HSN codes in case of goods and service accounting codes in case of services.
7. What is accounting code?
Ans. HSN code is used in case of goods similarly accounting code is used in case of services, known as “Service Accounting Code” (SAC).
8. Whether value for each transaction will have to be fed? What if no consideration?
Ans. Yes. Not only value but taxable value will also have to be fed. In some cases both may be different. In case there is no consideration, but it is supply by virtue of schedule 1, the taxable value will have to be uploaded.
9. How will you compute taxable value?
Ans. It shall be calculated on the basis of valuation rules in this behalf.
10. Can a recipient feed information in his GSTR-2 which has been missed by the supplier?
the recipient can himself feed the invoices not uploaded by his supplier. The credit on such invoices will also be given provisionally but will be subject to matching.
On matching, if the invoice is not uploaded by the supplier, both of them will be intimated.
If the mismatch is rectified, provisional credit will be confirmed.
But if mismatch continues even after intimation, the credit provisionally allowed will be reversed. Refer Specimen of GSTR-2 Sl.no.4
11. What details are required to be matched by the recipient (customer) under the Model CGST/SGST Act?
Ans. The details of every inward supply furnished by a registered taxable person (customer) for a tax period shall, in the manner and within the time prescribed, be matched with:-
a. Corresponding details of outward supply furnished by the corresponding taxable person (supplier) in his valid return for the same tax period or any preceding tax period;
b. Additional duty of customs paid under section 3 of the Customs Tariff Act, 1975 (51 of 1975) in respect of goods imported by him;
c. For duplication of claims of input tax credit. [Section 37 (1) of the CGST/SGST Act read with Rule-10 of the Return Rule]
12. What if the invoices do not match? Whether ITC given or denied? If denied, what action is taken against supplier?
Ans. If invoices in GSTR-2 do not match with invoices in counter-party GSTR-1, the ITC will be reversed if the mismatch continues even after it is made known to both and still it is not rectified.
Mismatch can be because of two reasons. First, it could be due to mistake at the side of the recipient, and in such a case, no further action is required. Secondly, it could be possible that the said invoice was issued by supplier but he did not upload it and pay tax on it. In such a case, recovery action shall be taken against the supplier. In short, all mismatches will lead to proceedings if the supplier has made a supply but not paid tax on it.
|Dashboard: Receiver and Supplier Mismatch Reports
|Mismatch with supplier Report
||Total Taxable Amount
||Total Mismatch Credit
||Input Tax Credit Claimed
13. What is the procedure for final acceptance of ITC and communication thereof?
Ans. The final acceptance of ITC will be made available electronically to the registered taxable person in the form of GST ITC-1 [Section 37 (2) of CGST/SGST Act read with Rule-11 of the Return Rule]
14. What is the special feature of GSTR-2?
Ans. The special feature of GSTR-2 is that the details of supplies received by a recipient can be auto populated on the basis of the details furnished by the counterparty supplier in his GSTR-1. [Refer specimen of GSTR-2]
15. What will happen, in case there is discrepancies in claiming the input tax credit by the recipient in his return?
Ans. In case, input tax credit claimed by a recipient in respect of his inward supply is in excess of:-
• The tax declared by the supplier for the same supply; or
• The outward supply is not declared by supplier in his valid returns.
Then the same will be communicated to both supplier as well as recipient in Form GST ITC-1 [Section 37 (3) of the CGST/SGST Act read with Rule 12 (1) of the Return Rule].
16. What are the consequences if the discrepancies for excess availment of credit is not rectified even after the communication ?
Ans. The amount of credit shall be added to the output tax liability of the recipient [Section 37 (5) of the CGST/SGST Act read with Rule-12 (4) of the Return Rule]
17. What happens in case of duplication of claim of Input Tax Credit by the recipient?
Ans. The claim shall be communicated the registered taxable person in form GST ITC-1 electronically through common portal and shall be added to the output tax liability of the recipient [Section 37 (4) (6) of CGST/SGST Act read with Rule 13 of the Return Rule]
18. Whether interest is to be paid on the output tax liability added under section 37 (5) (6) of the CGST/SGST Act?
A recipient in whose output tax liability any amount has been added under subsection (5) or, as the case may be, under sub-section (6), shall be liable to pay interest at the rate specified under sub-section (1) of section 45 on the amount so added from the date of availing of credit till the corresponding additions are made under the said sub-sections. [Section 37 (8) of the CGST/SGST Act].
The supplier and the recipient to whom discrepancies are communicated may make suitable rectification in the details of outward/inward supplies to be furnished for the month in which the discrepancy is made available. [Rule 16 (2) (3) of the Return Rule]
Thereafter, if the discrepancy is not rectified by the recipient in his valid return, then that discrepancy shall be added to the output tax liability of the supplier . [Section 38 (5) of the CGST/SGST Act read with Rule-16 (4) of the Return Rule]
19. If output tax liability is reduced after the required details are furnished by the recipient in his return, what happens to the interest paid earlier at the time of addition in the output tax liability?
Ans. Where any reduction in output tax liability is accepted, the interest paid under sub-section (8) shall be refunded to the supplier by crediting the amount in the corresponding head of his electronic cash ledger in the manner as may be prescribed. [Section 38 (9) of the CGST/SGST Act read with Rule-18 of the Return Rule]
Further, the supplier shall be eligible to reduce, from his output tax liability, the amount added under sub-section (5) if the recipient declares the details of the credit note in his valid return within the time specified [Section 38 (7) of the CGST/SGST Act read with Rule-18 of the Return Rule]
20. Do the taxable person have to feed anything in the GSTR-2 or everything is auto-populated from GSTR-1?
Ans. While a large part of GSTR-2 will be auto-populated, there are some details that only recipient can fill like details of imports, details of purchases from non-registered or composition suppliers and exempt/non-GST/nil GST supplies etc. Refer Specimen of GSTR-2
21. What will be the legal position in regard to the reversed input tax credit if the supplier later realizes the mistake and feeds the information?
Ans. At any stage, but before September of the next financial year, supplier can upload the invoice and pay duty and interest on such missing invoices in his GSTR-3 of the month in which he uploaded the invoice.
The recipient will then automatically get ITC on that invoice. The interest paid by the recipient at the time of reversal will also be returned to the recipient through an automated system on the GSTN.[Section 37 (7) / (9) of the SGST/CGST Act]
22. Whether the ITC denied can be restored?
Ans. If the supplier uploads the invoice at any time after the reversal but by September of the next financial year, the credit reversed earlier gets restored along with refund of the interest paid during reversal. [Section 37 (7) / (9) of the SGST/CGST Act]
23. Do tax payers under the composition scheme also need to file GSTR-1 and GSTR-2?
Composition tax payers do not need to file any statement of outward or inward supplies. They have to file a quarterly return in Form GSTR-4 by the 1st of the month after the end of the quarter. [Section 34 (2) of SGST/CGST Act read with Rule-4 of Return Rule]
Since they are not eligible for any input tax credit, there is no relevance of GSTR-2 for them and since they do not pass on any credit to their recipients, there is no relevance of GSTR-1 for them.
In their return, they have to declare summary details of their outward supplies along with the details of tax payment. They also have to give details of their purchases in their quarterly return itself, most of which will be auto populated.
24. Do Input Service Distributors (ISDs) need to file separate statement of outward and inward supplies with their return?
the ISDs need to file only a return in GSTR-6 and the return has the details of credit received by them from the service provider and the credit distributed by them to the subsidiaries. Since their return itself covers these aspects, there is no requirement to file separate statement of inward and outward supplies. [Section 34 (4) of SGST/CGST Act read with Rule-6 of the Return Rule]
25. How does a taxpayer get the credit of the tax deducted at source on his behalf? Does he need to produce TDS certificate from the deductee to get the credit?
Ans. Under GST, the deductor will be submitting the deductee wise details of all the deductions made by him in his return in Form GSTR-7 to be filed by 10th of the month next to the month in which deductions were made.[Rule 7 (2) of the Return Rule]
The details of the deductions as uploaded by the deductor shall be auto populated in the GSTR-2 of the deductee.
The taxpayer shall be required to confirm these details in his GSTR-2 to avail the credit for deductions made on his behalf. To avail this credit he does not require producing any certificate in physical or electronic form.
The certificate will only be for record keeping of the tax payer and can be downloaded from the Common Portal.
26. What is annual return?
Ans. Every registered taxable person including composition dealer but other than ISD, a person u\s 46 (TDS) , 56 (E commerce), casual taxable person and non resident taxable person shall furnish under sub-section (1) of section 39 an annual return electronically in FORM GSTR-9 on or before the 31st Day of December following the end of such financial year through the Common Portal either directly or from a Facilitation Centre, notified by the Board or Commissioner:
Provided that a taxable person paying tax under section 9 (composition scheme) shall furnish the annual return in FORM GSTR-9A.
27. Is an Annual Return and a Final Return one and the same?
Ans. No. Annual Return has to be filed by every registered taxable person paying tax as a normal or a compounding taxpayer.
Final Return has to be filed only by those registered taxable persons who have applied for cancellation of registration. This has to be filed within three months of the date of cancellation or the date of cancellation order.
28. If a return has been filed, how can it be revised if some changes are required to be made?
Ans. In GST since the returns are built from details of individual transactions, there is no requirement for having a revised return. Any need to revise a return may arise due to the need to change a set of invoices or debit/ credit notes.
Instead of revising the return already submitted, the system will allow changing the details of those transactions (invoices or debit/credit notes) that are required to be amended.
They can be amended in any of the future GSTR- 1/2 in the tables specifically provided for the purposes of amending previously declared details. [Section 34 (9) of the SGST/CGST Act read with Rule 12 (2) (3) of Return Rule]
29. Is it compulsory for taxpayer to file return by himself?
Ans. No. A registered taxpayer person can also get his return filed through a Tax Return Preparer, duly approved by the Central or the State tax administration. [Rule 24 (7) of return rule]
Views presented in this article are personal view of the author. Information presented in this article is intended for information purpose only and does not constitute any legal opinion or advice. Readers and Users are requested to seek formal legal advice prior to acting upon any of the information provided herein.