GST Filing gets tougher: Tax payer will no longer be able to Edit Auto Populated Tax Liability in GSTR-3B from July
Taxation experts say that to address discrepancies in GSTR-1 filings, a new form—GSTR-1A—has been introduced but it isn’t real-time
The Goods and Services Tax (GST) framework will undergo a major change starting in July: taxpayers will no longer be able to modify the tax burden that is automatically supplied in their GSTR-3B filings. This upgrade was released by the GST Network (GSTN) in an effort to stop abuse and stop revenue leaks. Tax experts caution, meanwhile, that this will require suppliers to be more accurate and may cause customers to experience cash flow issues.
Taxation experts say that to address discrepancies in GSTR-1 filings, a new form—GSTR-1A—has been introduced but it isn’t real-time. This means any corrections made through GSTR-1A could delay Input Tax Credit (ITC) for buyers, potentially leading to working capital issues.
As reported in atoztaxcorp, the co-chairman of the Indirect Tax Committee at the Gujarat Chamber of Commerce and Industry (GCCI) said that “At the moment, suppliers submit GSTR-1, which feeds into the purchasers' GSTR-2B and automatically populates their GSTR-3B. Currently, suppliers can directly modify GSTR-3B if they make a mistake or wish to change their tax due. "There won't be that option anymore.”
Starting in July, the sole opportunity for a supplier to fix a mistake in GSTR-1 is to file GSTR-1A before the GSTR-3B deadline, which is the twentieth of each month. However, late revisions might only show up in the following month's ITC cycle, which would delay credit and tie up cash because GSTR-2B, which buyers need to file GSTR-3B, is generated on the 14th.
A senior GST official, speaking on condition of anonymity, explained the reasoning for the decision, saying, "The decision to restrict editing in GSTR-3B has been in the pipeline for nearly 18 months." The output tax liability is automatically entered into the system and included in the buyer's Input Tax Credit (ITC) when a supplier submits GSTR-1. GSTR-3B is due on the twentieth of each month, and this occurs by the tenth. The entire recovery chain is affected if a supplier fails to pay taxes. Misuse was occurring as a result of enabling modifications in GSTR-3B, which effectively allowed ITC to be passed on without the associated tax being paid. The system must eventually be safeguarded in order to safeguard public funds.
Chartered accountants assert that the ruling, which tries to prevent false claims, will undoubtedly make it more difficult for taxpayers to comply.
"There is no doubt that this modification will stop revenue loss and lessen false ITC claims. However, the burden of compliance is also increased. In order to prevent penalizing honest taxpayers, he stated that GSTR-1A must be streamlined. Only then can even legitimate errors in GSTR-1 be corrected.
"The margin for error has shrunk dramatically," said another chartered accountant, echoing the worries. Now, all suppliers must file GSTR-1 as accurately as possible. Any delay could affect their clients' ability to submit an ITC claim on time. One of the biggest modifications to the GST system since its introduction is this one.
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