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GST TAX LIABILITY

After various presentations and comments received from stakeholder regarding clarification on the procedure for rectification of errors made while filing their GSTR-3B return, We summarised Excess/Short/Wrong GST tax liability reported in GSTR-3B and its solutions as below:

Situation 1: GST tax liability was under-reported while filing GSTR-3B return and confirmed submission by the taxpayer.
Example: Maduka Yoga Mat while filing their return for the month of July, they missed one invoice to report in GSTR-3B. Since they had already submitted and confirmed their output supply details, they were not sure of how to proceed. What can they do?
Solution: Maduka Yoga Mat may use the ‘edit return’ facility to add such liability in their submitted return and then proceed for the filing of their return.

Situation 2: GST tax liability was under-reported, confirmed submission and short cash was added to the electronic cash ledger.
Example: Sony Bag Store while filing their return for the month of July, they missed one invoice to report in GSTR-3B. Since they had already submitted and confirmed their output supply details, they were not sure of how to proceed. As well they added cash in the cash ledger to the extent of their undervalued tax liability. What can they do?
Solution: Sony Bag Store may use the ‘Edit return’ facility to add such liability in their submitted return. Further, they may generate a fresh challan under FORM GST PMT-06 to additional cash or utilize their credit and furnish their return.

Situation 3: GST tax liability was under-reported, paid short to the extent of their undervalued tax liability as well all liabilities were offset by debiting the cash and credit ledger and finally return filed.
Example: Bliss Health Products, while filing their return for the month of July, they missed one invoice to report in GSTR-3B. The owner of Bliss Health Products, in hurry, on the Last day of filing GSTR-3B in order to not pay late fee and other penalties.
Solution: In such a situation, they may report this additional tax liability in the next month return and pay tax with interest up to filing date. Of course, this additional liability certainly not reported in GSTR-1 of the month or quarter, this liability may be declared in a subsequent month or quarter’s GSTR-1 in which payment was made.

 

 

Situation 4: GST tax liability was over reported while filing GSTR-3B return and confirmed submission by the taxpayer.
Example: Netgear Security Store while filing their return for the month of July, they had reported an inter-State sale but realized that the same sale was counted twice and hence was not to be reported. Since they had already submitted and confirmed their output supply details, they were not sure of how to proceed. What can they do?
Solution: Netgear Security Store may use the ‘edit return’ facility to reduce such liability in their submitted return and then proceed for the filing of their return.

Situation 5: GST tax liability was over-reported, confirmed submission and excess cash was added to the electronic cash ledger.
Example: Laxmi Graduation Dresses while filing their return for the month of July, they had reported an inter-State sale but realized that the same sale was counted twice and hence was not to be reported or taxed. But the return form was already submitted and no change could be done to reduce the liabilities. Further, the company had already deposited cash in their cash ledger before realizing this error What can they do?
Solution: Laxmi Graduation Dresses has the option to use the ‘edit’ facility to reduce such liability. Once, this is done, they can partially debit their cash ledger to offset their tax liability. Further, the remaining balance can either be claimed as a refund or used to offset future liabilities.

Situation 6: GST tax liability was over-reported, paid excess cash to the extent of their overvalued tax liability as well all liabilities were offset by debiting the cash and credit ledger and finally return filed.
Example: Metro Shoes, had reported an inter-State sale but realized that the same sale was counted twice and hence was not to be reported or taxed. But the return form was already filed and no change could be done to reduce the liabilities.What can they do?
Solution: Metro Shoes may reduce this liability in the return of subsequent months or claim a refund of the same. Of course, this overvalued liability certainly reported in GSTR-1 of the month or quarter, this liability may be amended through amendments under Table 9 of FORM GSTR-1.

Situation 7: GST tax liability was wrongly (i.e. Instead of IGST reported CGST & SGST)reported while filing GSTR-3B return and confirmed submission by the taxpayer.
Example: Zen Computers is registered in the Gujarat state. While entering their outward supplies in FORM GSTR-3B, the firm realized that they had inadvertently, shown inter-State supply as intra-State supply and submitted the return.What can they do?
Solution: Zen Computers will have to rectify wrongly reported liability using the edit facility. Here, the Zen Computers will reduce their Central Tax / State tax supplies and liability and add integrated tax liability and proceed to file their return.

Situation 8: GST tax liability was wrongly reported, confirmed submission and cash were added to the electronic cash ledger as per the return liability (i.e. Cash added to CGST+SGST instead of IGST.
Example: Gautam Tuxedo Stores, selling Classic Black Tuxedo only and is registered in the Gujarat state. While entering their outward supplies in FORM GSTR-3B, the firm realized that they had inadvertently, shown inter-State supply as intra-State supply and submitted the return.Further, they also had updated their Central Tax and State tax cash ledgers.What can they do?
Solution: Gautam Tuxedo Stores will have to rectify wrongly reported liability using the edit facility. The company will reduce their Central Tax / State tax liability and add integrated tax liability. Further, they will have to pay integrated tax and update their cash ledger. They may seek for Central Tax / State tax cash refund in due course or use the same for offsetting future liabilities.

Situation 9: GST tax liability was wrongly reported, cash was added to the electronic cash ledger as per the return liability (i.e. Cash added to CGST+SGST instead of IGST) as well as all liabilities were offset by debiting the cash and credit ledger and finally return filed.
Example: Canon Computers was registered in the Gujarat State. While entering their outward supplies in FORM GSTR-3B, the firm realized that they had inadvertently, shown inter-State supply as intra-State supply and submitted the return. They paid their wrong liability and filed their return in order to avoid late fee and penalty? What can they do?
Solution: Therefore, the return has already been filed, then the firm will have to report the inter-State supply in their next month’s liability and adjust their wrongly paid intra-State liability in the subsequent month’s returns or claim refund of the same. Moreover, Such taxpayers will have to file for amendments by filling Table 9 of the subsequent month’s or quarter’s FORM GSTR-1.

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One thought on “When Excess/Short/Wrong GST tax liability reported in GSTR-3B

  1. Asha says:

    What is the procedure to claim refund in example 6 given above?

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