The Goods and Services Department has been noticing the mismatches in the Input Tax Credit Claim in GSTR-3B and GSTR-2B while filing the returns. Also, they were continuously sending the GST ASMT-10 to the taxpayers for such mismatches in the claims.
The GST ASMT-10 is a notification issued by tax authorities to registered taxpayers in instances where discrepancies or inconsistencies are identified in the GST returns filed by the taxpayer.
The GST authorities have the right to warn a firm in situations where there is a discrepancy between the input tax credit (ITC) claimed by a business and the output tax liability declared by the supplier.
The business may be required to pay an amount equal to the “excess of credit claimed” in addition to any relevant interest and penalties if it fails to respond in a timely manner.
GSTR-3B
The Form GSTR-3B is a simplified summary return and the purpose of the return is for taxpayers to declare their summary GST liabilities for a particular tax period and discharge these liabilities. A normal taxpayer is required to file Form GSTR-3B returns for every tax period.
The central government may notify the GSTR-3B due date extension from time to time if any.
GSTR-2B
GSTR-2B is an auto-drafted ITC statement which is generated for every normal taxpayer on the basis of the information furnished by his suppliers in their respective GSTR-1/IFF, GSTR-5 (non-resident taxable person) and GSTR-6 (input service distributor).
The statement indicates availability and nonavailability of input tax credit to the taxpayer against each document filed by his suppliers.
The Department may issue a GST notice to the taxpayer if the discrepancy between the ITC claimed in GSTR-3B and GSTR-2B is greater than 20% or surpasses Rs. 25 lakh, according to the reports. The same is an agenda for the 50th GST council to be held on 11th July 2023.
As per reports, there has been a rising trend of fraudulent input tax credit (ITC) claims and fictitious businesses, leading to significant financial losses for the government. The Directorate General of GST Intelligence (DGGI) has taken action by apprehending several key individuals involved in such fraudulent activities.
Consequently, this issue presents a complex challenge for both the government and the economy. Even a single discrepancy can result in receiving notifications, incurring interest charges, and being subject to penalties.
It is recommended to exercise caution while filing your tax returns and seek assistance from a tax practitioner. Additionally, it is crucial to thoroughly review all documents and numbers for accuracy and completeness.
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