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Difference in Outward Supply and Corresponding Liability in GSTR-1 vs. GSTR-3B

Jul 20, 2024

Lecture on Difference in Outward Supply and Corresponding Liability in GSTR-1 vs. GSTR-3B

Key Points

  1. Difference in GSTR-1 vs. GSTR-3B

    • Scenario: Outward Supply and liability in GSTR-1 at 10 lakh vs. 1 lakh in GSTR-3B.
    • Rule 88C effective from December 26, 2022.
    • If there is a disparity by a certain amount and percentage (as recommended by the GST Council), a notice under Part A DRC-01B will be issued.
    • Two options in response to the notice:
      • Pay the differential liability along with interest via DRC-03.
      • Provide a reason for the difference.

  2. Possible Situations

    • Clerical/Error/Mistake: In cases of genuine clerical mistakes by the supplier.
      • Must respond in Part B of DRC-01B within 7 days.
      • Errors cannot be revised but can be amended in subsequent tax periods.
      • Rectification allowed till November 30th following the relevant financial year (effective from October 1, 2022).

  3. Recovery Proceedings

    • If no payment or response within 7 days, recovery proceedings under Section 79 will be initiated.
    • No issuance of show-cause notice under Sections 73 or 74.
    • New Rule 142B effective from August 4, 2023.
      • Non-payment will lead to notice in DRC-01D.
      • Liability will be added to Part II of the e-liability ledger.
      • Initiation of recovery proceedings without a show-cause notice under Sections 73 or 74.

  4. Specifics of the New Rules

    • Difference as per Rule 88C is seen as self-assessment tax under Section 75(12).
    • Notices issued to ensure liability is paid or explained.
    • Designed to prevent intentional over-reporting in GSTR-1 to pass ineligible credits to buyers.

  5. Action Steps for Taxpayers

    • Respond to DRC-01B within 7 days.
    • Monitor the GST common portal and registered email for notices.
    • Rectify any omissions or errors in GSTR-1 by November 30th of the following financial year.

Conclusion

  • Rules to ensure compliance and prevent tax evasion.
    • Importance of timely response and correction to avoid recovery proceedings.
    • Stay vigilant for notices and keep records accurate.

Note: Always stay updated about the latest GST rules and amendments to ensure compliance.

Full transcript