By CA Vipul Khandhar,
(Author is a well know Chartered Accountant practicing at Ahmedabad)
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2. GST Scrutiny Guidelines Given By The Mahagst:
The Maharashtra Government has issued Guidelines with respect to scrutiny parameters, system, or data-related issues faced during return scrutiny under GST. The return is a very important aspect of taxpayers’ compliance under GST Act(s), which is the base for the Department to keep track over tax payment, Input Tax Credit availed and Input Tax Credit.
|In Parameter related to claim of ITC on account of IGST paid on import of goods vis-a-vis actual IGST paid while import of goods, it is found that difference is on account of non-inclusion of transactions of imports in EIU / GSTN BIFA data. Those import transactions may be made by air under air way bills, import of goods from SEZ or import by ocean mode of transport as the case may be. What should be the line of action on such differences?
|The importer of goods is required to pay applicable IGST while filing of bill of entry along Import Duty. The field to report GSTIN of the importer was also provided in bill of entry. However, in initial phase of the GST system many importers have not reported their GSTIN in bill of entries, therefor information of IGST paid on such import might had not been transmitted to GSTN. Department had used the information from GSTN BIFA for generating this parameter. In view of this proper officers are advised to obtain the list of all bill of entries of which ITC on import of goods was claimed in GSTR-3B, download the GSTR-2A / 2B for the period under scrutiny and match it with details of bill of entries appearing in Part D of GSTR-2A / 2B of the corresponding period, separate out the bill of entries not appearing in the list of GSTR-2A /2B and verify those bill of entries on ICEGATE portal. It shall be kept in mind that in GSTR 2A / 2B separate tables with respect to overseas import and import from SEZ are available. Hence, separate list may be obtained in this regard or may be separated by the officer before comparison. The differences on account of transactions which are verified on the ICEGATE portal may be allowed subject to the verification those which is really in excess of what is appearing Part D of GSTR-2A/2B and their place of import is in State of Maharashtra.
|In few cases, mis-match of ITC claim on account of IGST paid on import of goods pertains to import by courier of which data is not available on ICEGATE portal also. How to deal with such ITC differences?
|Some courier companies are allowed as an authorized importer. Usually it happens by air mode. The duty, where leviable is paid by the courier company on behalf of importers before taking delivery of the parcels. In view of this, the submission of taxpayer containing the details namely, airway bill or any other document stating details of transport by air, courier bill of entry evidencing payment of IGST, assessment note containing the details of imported goods, courier note, certificate of authorized courier importer, etc. may be accepted if found proper.
|With respect to parameter of excess claim of ITC on account of IGST paid on Import of goods in GSTR-313 / GSTR9 vis a vis actual payment. The bill of entry wise data has not been provided. The bill of entry wise data of overseas import and import from SEZ units /SEZ developers would be necessary to take this issue to logical end.
|Tax officers are advised to download the GSTR-2A / GSTR-2B of all return period covered in the period of scrutiny and consolidate it. This information is already available in PART D of GSTR 2A / 2B under heading of tax paid on overseas import of goods and import of goods from SEZ. Also the said information is made available on the SAS WRS portal by EIU, it may be referred by officers.
|In regards to parameter of ITC of ISD credit availed in GSTR- 3B/GSTR-9 which is in excess of ISD credit available in GSTR 2A, the line item wise data of documents uploaded by ISD has not been provided by EIU to enable proper scrutiny.
|Tax officers are advised to download the GSTR-2A / GSTR-2B of all return period covered in the period of scrutiny and consolidate it. The line item wise information of transactions uploaded by ISD is available in PART B of GSTR 2A / 2B under heading of ISD credit and amendments to ISD credits. The officer may use the consolidated of line item wise information of PART-B above.
|While communicating parameters the information of tax head wise (COST, SGST, IGST, Cess) differences put together are communicated to field officers. It made difficult for field officer to generate statutory notices as tax head wise differences are required for creation of notices like DRC- 01A, DRC-01 and DRC-07 order. How to proceed in this situation?
|The information of differences by putting together various tax head was used for selection of cases to return scrutiny. In Internal Circular 6A of 2021, proper officers were directed to verify the mis-matches on BO system before issuing statutory notices and notices shall be issued in cases where such mis-matches are confirmed on BO system. The tax head wise summery of mis-matches is available under taxpayer record (return) on BO system with respect to parameters of GSTR 1 vs GSTR-3B and GSTR-3B vs GSTR-2A.
|As a policy of financial year based return scrutiny, parameters are drawn for a longer period of financial year. The officers of MGSTD are used to with earlier provisions of interest under MVAT Act, by which calculation of interest from the immediate next date of the end of FY. In view of this what will be the date from which interest is to be calculated?
|The provision of earlier VAT Act is not pari-material to GST Act so far as levy of the interest is concerned. The interest under GST is required to be calculated according to return period taking into consideration the due date for making payment under GSTR- 3B of the concerned return period. The liability on account of mis-matches of the transaction covered in the particular return period shall be considered as the liability of that return period for this purpose.
|The transaction wise information is not provided by EIU along with parameters. In the absence of this, calculation of month wise interest for the transactions covered in particular month become difficult. How to handle this issue?
|The transactions wise information of most of the parameters can be obtained by downloading GSTR-1 and GSTR- 2A/26 of the return periods under scrutiny. Whereas, the similar details with respect to few parameters, which is not in BO, are provided by EIU. The proper officers are advised to download the GSTR-1, GSTR-3B, GSTR-2A /2B for all periods under scrutiny including relevant GSTR-2A. Also they can obtain the list of invoices or other relevant documents from taxpayer of which ITC is claimed by him / her, match it with list transactions downloaded in GSTR-2A. The period wise differences would be useful for calculation of interest as per period of return.
|In cases, where GTSR-9 was filed the comparison of ITC claimed in GSTR-9 with GSTR- 2A /2B was provided by EIU. Whereas, in some cases where GSTR-9 are not filed or may not be liable to file it, the ITC differences between GSTR-313 & GSTR-2A have been communicated as parameter (invoice wise 86 tax head wise data based on which such parameters are drawn is not made available to officer). Later on during confirmation of parameter from the data of BO system GSTR-2A, the ITC differences are reduced due to dynamic nature of GSTR2A. In this situation how to confirm the invoices uploaded after specified date (Para 79)?
|The proper officers are advised to download the GSTR-2A / 2B of all periods under scrutiny and may use it upon consolidation of PART A of GSTR-2A. The date of filing of GSTR-1 by supplier is also available against the invoices appearing in said information of GSTR-2A / 2B, the said date of filing of GSTR-1 shall be the date of uploading invoices for the purpose of proviso to section 16 (4) and for said parameter 79.
|With respect to parameter of excess ITC claimed in GSTR 3B/9 which is not confirmed in GSTR 2A or in table 8A of GSTR 9, the field formation requires the date on which GSTR 2A is fetched for matching should be provided, difference between the GSTR-2A and GSTR3B provided by EIU data, is not same as on date or GSTR 9 / Sr. No 8D. Clarification may be issued which difference should be considered while finalizing the case?
|In this regard the proper officers are advised to refer the Internal Circular 6A of 2021. It has already been clarified that proper officer should refer the actual mis-match on BO system. They shall also download the GSTR-2A/2B and consider the date of upload of GSTR-1 by supplier available in said GSTR2A for limitation purpose.
|In some cases, the ITC claim of GSTR-3B vis a vis GSTR-2A the ITC claims appears to be in excess of available. Whereas, while filing of GSTR-9 (annual return) taxpayer had reconciled the differences in Table-8 of GSTR-9. How to verify the propriety of reconciliation in Table-8 of GSTR-9?
|The table-6 of GSTR-9 is meant to report the ITC details wherein ITC claimed in GSTR-3B returns auto-populates in Table 6 (A) and its bifurcation is to be furnished in Table – 6 (B) to (0). In said table taxpayer may report ITC reclaimed in column 6(H) of GSTR 9, ITC claimed on account of any other reasons, ITC claimed in subsequent year, etc. In next Table-8 taxpayer is required to reconcile the ITC available in GSTR-2A with actual ITC claim. In view of this and in order to deal with such cases, the proper officers are advised to consider the ITC shown in Column 6M of GSTR-9 “Any other ITC availed but not specified above” as well as ITC claimed in subsequent financial year in Column 8C of GSTR-9 should also be considered for reconciliation.
|One of the parameter for return scrutiny is less payment of tax under RCM by recipient of supplies under RCM in GSTR 9/ 3B/ 4 than the supplies shown by suppliers in his GSTR- 1 field formation need line item wise details of such invoices uploaded by supplier. In the absence of such line item wise details they are able to verify the compliance submitted by taxpayers. How to get it?
|The tax liability of recipient under RCM is arrived at by use of transactions uploaded by supplier in table 4B of his /her GSTR-1 and consolidated value of it is compared with the tax payment in GSTR-3B / GSTR-9 or as the case may be GSTR-4. The transaction wise information available in GSTR-2A part B of the taxpayer under scrutiny contains the details of such transactions. In column “Supply attracts Reverse Charge” where the flag Yes / No has been provided. The proper officers are advised to download this table for by applying filter as “Yes” and may consolidate it for the period under scrutiny by downloading GSTR-2A of all period s under scrutiny.
|With respect to parameter 79, ITC with respect to suppliers who filed GSTR-1 after March 2019 return due date, the invoice details for were provided by EIU. But it does not contain invoice numbers, which will facilitate the verification process. In invoice data additional data for identification about whether invoice wise data is from original GSTR1 or amended GSTR-1 data may be provided to facilitate the verification process. However, in some cases invoice level data is not received Kindly provide the data for all cases.
|Although, EIU has provided the information of supplier-wise data after the specified date, the tax officers are advised to refer the guidelines of Internal Circular 6A. Accordingly, the proper officer shall refer the details like invoice number, invoice date, upload date etc. available in GSTR-2A. Thus, proper officer shall download GSTR-2A of all periods covered under scrutiny and refer the invoice number of which filing date of GSTR-1 / GSTR-5 by the corresponding supplier is beyond specified date.
|In parameter GTR-3B vs GSTR- 2A the difference amount as communicated by EIU does not matches with the amount in the report of GST BO system, which shall be considered for statutory actions?
|The information available in GST BO system is more updated and accurate in terms of data error. As well as act wise bifurcation is also available in BO System report. Hence, officers are advised to refer the BO report in such cases. It is advised that tax officer first download the GSTR-1, GSTR-2A / 2B for all tax periods covered in scrutiny notices and consolidate it according to heads and minor heads of the return table like B to B supplies, credit notes, debit notes, Import bill of entries overseas / SEZ, ISD credit, TDS / TCS credit etc. This would be helpful to proper officer in verification of compliance submitted by taxpayer.
|EIU has not provided the invoice wise data of the ITC to be disallowed for various reasons. Hence during the adjudication proceedings, the supplier wise & invoice wise excess claim of ITC can’t be determined to communicate to the taxpayers to seek the compliance. EIU may develop a tool which enables taxpayers / proper officers to procure the invoice wise purchase register. Which may subsequently be matched with GSTR 2A. So that the miss- matched transactions could be easily identified.
|GST return system is designed in such a way that invoice wise details of inward supplies are not taken in periodic returns of the taxpayer. Therefore, the invoice wise data against all parameters could not be available. In cases of some parameters wherever possible it is made available by EIU. In view of this proper officers are advised to obtain the invoice wise details of inward supplies for the period of scrutiny. He / she should also download the GSTR-2A/2B of all return periods under scrutiny and based on matching of these details the invoices missing in GSTR-2A / 2B can be identified. Due to different manner of data entries, the matching by some utility may not be complete and officer still have to do some manual work. The ITC matching tool is already available for taxpayers, which may be obtained from taxpayers for time being.
|n case of data communicated by EIU pertaining to parameter related to section 16 (4), the dates of filing of GSTR-3B and GSTR-1 communicated by EIU are different from date of BO system.
|Again proper officers are advised to refer to the guidelines of Internal Circular 6A and confirm the date of filing of GSTR-3B from BO system as well as dates of filing of GSTR-1 by supplier as appearing in GSTR-2A of taxpayer under scrutiny before finalizing the demand notice or demand orders.
|Due to non-availability of invoice wise data of inward supplies, the identification of ITC and applicable interest thereon on account of supplies from suppliers whose RCs have been cancelled or who were Return Non fillers, become difficult. How to deal with this issue?
|Tax officers are advised to obtain the invoice wise inward supply register from the taxpayer and match it up with the downloaded GSTR-2A / 2B. Compare the cancellation effect date as well as return filing status of supplier. Thus, accordingly they shall arrive at ineligible ITC of each tax period and help in calculation of interest according to tax period. It will also enable to verify the issues pertaining to ineligible ITC under section 17 (5).
|Access to the transaction data of import of goods not available to most of STOs & ACs. How to get this data?
|As stated herein before the transaction data of IGST paid on import of goods is available in GSTR-2A / 2B and proper officers are advised to use the said data by downloading GSTR-2A / 2B. As also EIU has obtained the data of imports from DG System. EIU had put GSTIN in few transactions based on PAN & IEC code, therefore this data would definitely include more transactions than the above said table of GSTR-2A / 2B. EIU has made available this data on SAS WRS portal. The access of WRS portal has been given to all Addl. CSTs, all JCs, all DC Investigation. The officers may seek help of those officer who have been provided with access of WRS Reports.
|With respect to parameter of excess outward tax in E-way Bills compared to GSTR 3B, the line item wise details of e way bill data is required for verification of cases of FY 2018-19 as taxpayers are demanding transaction data against scrutiny notices. How to get it? The EWBs wise information has been made available on SAS WRS portal of the Department. The access of said portal has been given to all JCs, all DCs investigation and Addl. CSTs. The information may be accessed by use of said portal rep
|The EWBs wise information has been made available on SAS WRS portal of the Department. The access of said portal has been given to all JCs, all DCs investigation and Addl. CSTs. The information may be accessed by use of said portal reports.
- Important Judgements & AARs:
(i) Decision of Hon’ble Supreme Court Regarding Blatant abuse of power in Expiry of e-way Bill :
(Applicant – Satyam Shivam Limited)
The Hon’ble high court set aside the order passed by the Revenue Department in the case of Satyam Shivam papers Pvt. Ltd. V. Assistant Commissioner ST & Ors, which states about the imposition of penalty on the Assessee due to expiry of the e-way bill.
The Hon’ble High Court held that it is the responsibility of the respondent to consider the explanation offered by the petitioner for non-delivery of goods on time. In this case, there was no material before the Respondent to prove that there was evasion of tax by the petitioner. Consideration of the expiry of the e-way bill as an intention to evade tax is completely arbitrary and illogical. The Hon’ble court stated that there has been an abuse of power by the Respondent in collecting the tax and penalty from the Petitioner. It has been held that no presumption can be drawn that there was an intention to evade tax on account of the expiry of the validity of the e-way bill by the petitioner.
This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.