In order to increase taxpayer convenience and ease of filing returns, the indirect tax department has proposed a set of changes in the GSTR-3B form, which is a composite return form that has details of sales, purchases, and input tax credit (ITC) and taxes to be paid.
In a concept note floated by the Central Board of Indirect Taxes, a copy of which is with TNIE, it has now proposed that GSTR-3B forms should have specific rows for showing various reversals and subsequent reclaims of ITC. In the existing system, there is no clarity with respect to reporting of reversals of ITC in specific rows of Form GSTR-3B. While ineligible ITC has to be reported in a separate table, some taxpayers report it in Table 4(D), others just take net ITC (after reducing ineligible credit).
The Board has also proposed a separate amendment table in GSTR-3B to display the changes made by the taxpayers in GSTR-1, which contains details of all the sales made by a business. Similarly, it has been proposed to include an amendment table in GSTR-3B to show any amendment in the ITC portion.
Besides, the board has also suggested that the auto-population of values of GSTR-1 into GSTR-3B should be specific rows so as to establish one-to-one correspondence to a large extent between rows of GSTR-1 & GSTR-3B, thereby providing clarity to the taxpayer and tax officers. The concept note opines that this would minimize the requirements of user input in GSTR-3B and ease the GSTR-3B filing process.
It is to be reminded here that GSTR-1 is filed monthly or quarterly depending on the annual turnover of the business, while GSTR-3B has to be filed on a monthly basis irrespective of the turnover.
The concept paper also proposes a separate table for details of all the negative tax liabilities and carrying forward negative values of the previous tax period to the current tax period.
“Considering various operational challenges, trade and industry had requested the government to modify the return reporting process and it is good that now a concept paper has been released for public consultation,” says Anita Rastogi, partner, PwC.
She, however, warns that the amendments in return format should not lead to changes in software currently being used by an assessee to pull out relevant data for filing returns. Or else it would lead to another challenge for the industry.