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Taxmen to give ‘reasonable time’ to biz to explain reasons for mismatch in GSTR-1, 3B before recovery action

Taxmen to give ‘reasonable time’ to biz to explain reasons for mismatch in GSTR-1, 3B before recovery action

Taxmen to give ‘reasonable time’ to biz to explain reasons for mismatch in GSTR-1, 3B before recovery action
As per the changes in the GST law effective January 1, GST officers were allowed to directly initiate recovery action against those errant businesses which showed higher sales in monthly return GSTR-1 but under-report it while tax payment in GSTR-3B.

The move was aimed at curbing the menace of fake billing whereby sellers would show higher sales in GSTR-1 to enable a purchaser to claim an input tax credit (ITC) but report suppressed sales in GSTR-3B to lower GST liability.

So far, under the goods and services tax law, show-cause notices were first issued and then a recovery process was initiated in such cases of mismatch in GSTR-1 and GSTR-3B.

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