The Commissioner of Kerala Goods and Service Tax issued the detailed guidelines in the form of a circular so as to guide people to file the periodic return in GSTR-3B to avoid incorrect disclosure of Input Tax Credit (ITC).
The fund transferred from the center (IGST) on account of settlement and appointment of IGST is based on the return filed by the taxpayers. Incorrect disclosure of ITC of IGST on account of interstate inward supplies of goods or services will result in a short settlement of the amount of funds transferred to the state.
The Circular elaborated on the procedure of fund transfer and appointment, which is based on the information of GSTR-3B returns available with the GSTN. So it necessitates the availability of correct data and information of GSTR-3B returns with the GSTN for proper settlement and appointment of funds.
The other procedure which was highlighted by the Commissioner in the circular was the correct declaration of ITC in monthly GSTR-3B. If only the net effects are shown by the taxpayers in the returns, it would result in a short settlement of IGST. Therefore the reversal of ITC and ineligibility of ITC has to be reported by taxpayers while filing the due returns.
The circular laid down the emphasis on the procession for the corrections in return filed earlier.
Firstly, those taxpayers who have committed errors of wrongly reporting or not reporting ineligible ITC as well as reversal of ITC in the returns filed for the financial period 2018-19 shall have to report it in the annual return to be filed in form GSTR-9.
Secondly, the taxpayers who have committed errors of wrongly reporting or not reporting ineligible ITC as well as reversal of ITC in the returns filed for the financial period 2019-20 have to report it in return GSTR-3B for the period from April to September 2020.
Lastly, The taxpayers who have committed errors of wrongly reporting or not reporting ineligible ITC as well as the reversal of ITC in any returns filed for the return periods from April 2020 shall report it in subsequent GSTR 3B to be filed by giving net effect in that subsequent return.
“Such incorrect information of ITC in periodic returns indicates impropriety in returns filed by taxpayers. It may result in the selection of cases of sud: tax payers for scrutiny. And, which later on might result in the imposition of penalty under the CGST/SGST Act(s),” the circular said.
Therefore, all taxpayers were instructed to follow the guidelines of the circular and file the periodic returns in GSTR-3B henceforth correctly. The taxpayers shall also correct the figures reported in the returns filed for earlier periods, if any, in the manner prescribed in the Circular.
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