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June 3, 2021

Madras High Court permits Assessee to re-submit Form GSTR-1 with the correct distribution of credit

by Mahesh Mara in GST, Legal Court Judgement

Madras High Court permits Assessee to re-submit Form GSTR-1 with the correct distribution of credit

What is section 39 of the CGST act?

Section 39 of the CGST act deals with Furnishing of returns. As per section 39(1) Every registered person, other than the below:

  • An Input Service Distributor or
  • A non-resident taxable person or
  • A person paying tax under the Composition Scheme or
  • Person liable for deduction of TDS or
  • Person liable for collection of TCS

Shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars as may be prescribed, on or before the 22nd day of the month succeeding such calendar month or part thereof where the aggregate turnover less than or equal to Rs 5 crore in the previous financial year. In case the aggregate turnover more than Rs 5 crore in the previous financial year than the return shall be filed on or before the 20th day of the month succeeding such calendar month or part thereof.

A registered person paying tax under the provisions of section 10 i.e. paying tax under the composition scheme shall, for each quarter or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, of turnover in the State or Union territory, inward supplies of goods or services or both, tax payable and tax paid within eighteen days after the end of such quarter. For example return for the Quarter ended June 2021 shall be filed on before 18th July 2021.

Every registered person required to deduct tax at source under the provisions of section 51 shall furnish, in such form and manner as may be prescribed, a return, electronically, for the month in which such deductions have been made within ten days after the end of such month. For example return for the Month ended June 2021 shall be filed on before 10th July 2021.

Every taxable person registered as an Input Service Distributor shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, within thirteen days after the end of such month. For example return for the Month ended June 2021 shall be filed on before 13th July 2021.

Every registered non-resident taxable person shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, within twenty days after the end of a calendar month or within seven days after the last day of the period of registration specified under sub-section (1) of section 27, whichever is earlier.

The Commissioner may, for reasons to be recorded in writing or by notification, extend the time limit for furnishing the returns under this section for such class of registered persons as may be specified therein. Provided that any extension of time limit notified by the Commissioner of Central tax shall be deemed to be notified by the Commissioner.

Every registered person, who is required to furnish a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax due as per such return not later than the last date on which he is required to furnish such return.

Every registered person who is required to furnish a return under sub-section (1) or sub-section (2) shall furnish a return for every tax period whether or not any supplies of goods or services or both have been made during such tax period.

Subject to the provisions of sections 37 and 38, if any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed, subject to payment of interest under this Act:

Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier

A registered person shall not be allowed to furnish a return for a tax period if the return for any of the previous tax periods has not been furnished.

Fact and issue of the case

The petitioner is a partnership firm and a registered dealer in terms of the provisions of the Tamil Nadu Goods and Service Tax Act, 2017. Regular returns of turnover are being filed computing the tax payable after setting off Input Tax Credit (ITC) as against the output tax liability. The ITC claimed is the cumulative amount of Central (CGST), State (SGST) and Intra-state (IGST).

Monthly returns were filed by the petitioner for the period August 2017 to December 2017 in the GST portal in Form GSTR-3B. There was, however, an inadvertent error in reporting the credit in Form GSTR-1 in regard to the outward supplies and Intra-state sales had been erroneously reported as inter-state sales, as a result, the CGST and SGST credit was reflected in the IGST column. The petitioner submitted a request for amendment of Form GSTR-1 that came to be rejected on August 12, 2019 on the ground that there was no provision to grant the amendment sought, in any event, not after March 31, 2019 as Notification 71/2018 had extended the time for submission of the amended GSTR-1 till March 31, 2019, for the period 2017-18. The petitioner was thus unable to correct the error. The petitioner has, therefore, come up with the writ petition seeking a statutory duty directing the Assistant Commissioner (ST)/R1 to permit it to correct Form GSTR-1 for the period August 2017 to December 2017 and redistribute the credit available from the IGST column to the CGST and SGST fields.

Observation of the court

High Court observed that the petitioner has committed an error in the filing of the details relating to credit. What should have figured in the CGST/SGST column has inadvertently been reflected in the ISGT column. It is nobody’s case that the error was deliberate and intended to gain any benefit, and in fact, by reason of the error, the customers of the petitioner will be denied credit which they claim to be legitimately entitled to, owing to the fact that the credits stand reflected in the wrong column. It is for this purpose, to ensure that the suppliers do not lose the benefit of the credit, that the present writ petition has been filed. Court also observed that the 31st of March 2019 was the last date by which rectification of Form – GSTR 1 may be sought. However, and also admittedly, the Forms, by the filing of which the petitioner might have noticed the error and sought amendment, viz. GSTR-2A and GSTR-1A are yet to be notified. Had the requisite Forms been notified, the mismatch between the details of credit in the petitioner’s and the supplier’s returns might well have been noticed and appropriate and timely action taken. The error was noticed only later when the petitioners’ customers brought the same to the attention of the petitioner.

Conclusion

Court held that in the absence of an enabling mechanism, assesses should not be prejudiced from availing credit that they are otherwise legitimately entitled to. The error committed by the petitioner is an inadvertent human error and the petitioner should be in a position to rectify the same, particularly in the absence of an effective, enabling mechanism under the statute. Court held that the petitioner is permitted to re-submit the annexure to Form GSTR-3B with the correct distribution of credit between IGST, SGST and CGST within a period of four weeks from the date of uploading of this order and the respondents shall take the same on file and enable the auto population of the correct details in the GST portal.

Read the Court Order from below

Madras-High-Court-permits-Assessee-to-re-submit-Form-GSTR-1-with-the-correct-distribution-of-credit

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