Introduction:
In India, the Central Board of Indirect Taxes & Customs (CBIC) is the body in charge of managing indirect taxes like the Goods and Services Tax (GST), central excise, service tax, and customs, among others. On Friday, the GST will have been in effect for six years. Specialists say the new tax system has now begun to live up to its promises of improved tax collection and compliance. The goods and services tax (GST) revenues have steadily climbed over the last six years thanks to strengthened compliance regulations a national campaign against tax evaders, and fake invoices.
What is the new update?
The new feature created by CBIC focuses on helping taxpayer on a real-world basis whatever tax liability they have incurred and give them the chance to clarify any inconsistency in tax filings before making any tax demands.
Recently, the Goods and Services Tax (GST) enabled taxpayers to file tax returns on the GST site directly and clarify any mistakes or disparities in their inbound and outgoing supplies without fear of being notified by the tax authorities.
The Central Board of Indirect Taxes and Customs (CBIC) has added a new feature to its portal that allows taxpayers to determine their precise tax burden on a real-world basis and allows them to address any discrepancies in their tax filings before any tax demands are made.
This service will start working in the coming days.
In a notice published on Thursday, the network that handles GST stated: "It has been notified that GSTN has created a feature that allows the individuals to give clarity between GSTR-1 and 3B return online."
What is the difference between GSTR-1 and 3B returns?
The information required for GSTR-1 and GSTR-3B returns is different in their applications. The information on all outbound supplies, or turnover, is included in the GSTR-1 report, which is submitted on a monthly or quarterly basis. Depending on the business turnover, it determines whether to file monthly or quarterly.
The dealer does have to submit GSTR-3B, a self-assessment report, in which they list their expenditures and acquisitions of both import and export items. The return has to be submitted each month regardless the turnover.
The invoice used to prepare the GSTR-1 return must contain information on both business-to-business and customer-to-business turnover, exempted goods, and the export of goods and services within the reporting period. A summary of the goods made within that period, as well as information on receivables on account and repayment, should also be included in the return.
On the contrary, the GSTR-3B return specifies the taxable value, CGST, SGST, and IGST as well as data on the turnover, exemption supplies, and exports of goods or services for the month. Input tax credit availability for the month as a whole and information on inbound supplies that are subject to the reverse charge should also be included.
What are the obligations?
It has already been authorized and ordered by the GST Council.
This novel attribute will distinguish between the obligation disclosed in the GSTR-1 form and the liability incurred in the GSTR-3B for each return period. A monthly self-declaration return known as GSTR-3B is filed by all registered taxpayers, except composition dealers, under GST. This report gives an introduction to a company's tax liabilities, comprising details on output tax liabilities and input tax credit (ITC) claims.
The GSRT-1, a monthly statement of external supplies that taxpayers are required to file, contains information about the commodities and services that were supplied using a variety of methods, including sale, transfer, barter, exchange, license, renting, lease, and other modes.
The taxpayer will be informed and allowed to offer details regarding the disparity using the DRC-01B form if the stated obligation above the paid responsibility by a certain amount or if the percentage difference exceeds a predetermined threshold.
Before this, businesses having inconsistencies between GSTR-1 and GSTR-3B were required to provide GST officers with information regarding all invoices for which ITC was claimed. This was carried out before initiating any legal action against unpaid taxes or short payments, which raised the likelihood of litigation.
The portal also includes an extensive guide to help people become comfortable with the new feature step-by-step.
"This being a system-driven usefulness, will perform tax payable assessments on an ongoing basis, providing the highest compliance with minimum governance," said Rajat Mohan, a partner at the tax consulting firm AMRG & Associates.
Conclusion:
This feature on CBIC’s portal will enable taxpayers to determine their precise tax liability on a real-world basis and give them the chance to explain any differences in tax filings before making any tax demands. Comparing 2017–18 to FY22 and FY23, the standard monthly revenue was Rs 0.9 lakh crore, up from Rs 1.19 lakh crore and Rs 1.51 lakh crore, respectively. In order to avoid receiving a warning from the tax authorities, taxpayers under the Goods and Services Tax (GST) can now clarify the discrepancy in their internal and outgoing supplies reported in their tax return on the GST portal itself.
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