Additional GST Liability on Mismatch in GSTR -1 and GSTR-3B: CBIC notifies GST Amended Rules

The Central Board of Indirect Taxes and Customs, amongst laying down procedures to meet the recommendations from the 48th GST Council Meeting, has inserted a new rule, Rule 88C after the Rule 88B, by amending the Central Goods and Services Tax Rules, 2017.

Rule 88C lays down the manner of dealing with difference in liability reported in statements of outward supplies and that reported in return. This is likely to affect the taxpayers in case of any inconsistency in filings of GSTR-1 and GSTR-3B.

Applicability of Rule 88C

This provision is applicable when the tax payable by a registered person, in accordance with the statement ofoutward supplies furnished by him in FORM GSTR-1 or using the Invoice Furnishing Facility in respect of a tax period, exceeds the amount of tax payable by such person in accordance with the return for that period furnished by him in FORM GSTR-3B. Such mismatch will be considered under the provisions of Rule 88C.

Intimation of taxpayer

The Department shall intimate the registered person, about the mismatch or difference in amount and by such amount and such percentage, as may be recommended by the Council, in Part A of FORM GST DRC-01B.

As per the notification, the intimation can be done electronically on the common portal, and a copy of such intimation shall also be sent to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said difference and directing him to :–

(a) pay the differential tax liability, along with interest under section 50, through FORM GST DRC03;  or

(b) explain the aforesaid difference in tax payable on the common portal.

It is to be noted that a period of seven days is given as the limitation for the intimation in this regard.

Procedure for Taxpayer to follow upon intimation of mismatch

(2) The registered person referred to sub-rule (1) shall, upon receipt of the intimation referred to in that subrule,  either,-

(a) pay the amount of the differential tax liability, as specified in Part A of FORM GST DRC-01B, fully or partially, along with interest under section 50, through FORM GST DRC-03

Subsequently, the taxpayer shall furnish the details thereof in Part B of FORM GST DRC-01B electronically on the common portal; or

(b) furnish a reply electronically on the common portal, incorporating reasons in respect of that part of the differential tax liability that has remained unpaid, if any, in Part B of FORM GST DRC-01B, within the period specified in the said sub-rule.

Consequence of non-compliance of Rule 88C

As per the sub-clause (3) of the inserted provision, Where any amount specified in the intimation referred to in sub-rule (1) remains unpaid within the period specified in that sub-rule and where no explanation or reason is furnished by the registered person in default or where the explanation or reason furnished by such person is not found to be acceptable by the proper officer, the said amount shall be recoverable in accordance with the provisions of Section 79.

Section 79 of the Central Goods and Services Tax states that,  Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the proper officer may file an application to the appropriate Magistrate and such Magistrate shall proceed to recover from such person the amount specified thereunder as if it were a fine imposed by him.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates