INFORMATION RETURN UNDER GST LAW

[Dr. Sanjiv Agarwal]

Obligation to furnish information return (Section 150)

Section 150 casts obligations upon various persons as stipulated in sub-section (1) to furnish information returns, authorization to commissioner to ensure furnishing of required information, issuance of show cause notice, if the information is not furnished etc.

Who is required to furnish information return [Section 150 (1)]

Following persons including a taxable person is required to furnish information return in respect of period, within time and in form as prescribed:

1. a taxable person; or
2. a local authority or other public body or association; or
3. any authority of the State Government responsible for the collection of value added tax or sales tax or State excise duty or an authority of the Central Government responsible for the collection of excise duty or customs duty; or
4. an income tax authority appointed under the provisions of the Income-tax Act, 1961; or
5. a banking company within the meaning of clause (a) of section 45A of the Reserve Bank of India Act, 1934; or
6. a State Electricity Board or an electricity distribution or transmission licensee under the Electricity Act, 2003, or any other entity entrusted with such functions by the Central Government or the State Government; or
7. the Registrar or Sub-Registrar appointed under section 6 of the Registration Act, 1908; or
8. a Registrar within the meaning of the Companies Act, 2013; or
1. the registering authority empowered to register motor vehicles under the Motor Vehicles Act, 1988; or
10. the Collector referred to in clause (c) of section 3 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013; or
11. the recognized stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956; or
50. a depository referred to in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996; or
1000. an officer of the Reserve Bank of India as constituted under section 3 of the Reserve Bank of India Act, 1934; or
14. the Goods and Services Tax Network, a company registered under the Companies Act, 2013; or
15. a person to whom a Unique Identity Number has been granted u/s 25(9); or
16. any other person as may be specified, on the recommendations of the Council, by the Government.

The above persons are responsible for maintaining record of registration or statement of accounts or any periodic return or document containing details of payment of tax and other details of transaction of goods or services or both or transactions related to a bank account or consumption of electricity or transaction of purchase, sale or exchange of goods or property or right or interest in a property under any law for the time being in force and are obligated to file information return in prescribed manner.

Objectives of Information Return

Under GST law, everything is online and returns are filed on common portal. The information return would provide the information which may help co-relate and verify the returns uploaded by various persons in relation to input supply, output supply, TDS, TCS or input tax credit. Such verification is intended to detect or identify the following:

1. Suppression of value of taxable supplies
2. Leakage of tax revenue
3. Coherency in the information supplied to GST and to various other departments (eg. Sales information uploaded under GST can be compared with sales information uploaded/provided to income tax)
4. Mis-Statement of the transaction details (e.g. Taxable supply may misstated as non-taxable supply)
5. Reconciliation of tax data with specific sectors in the economy (such as Growth in GST paid under construction sector would have a proportional increase in income tax of iron and steel sectors, cement industries, builders and developers etc.)
6. Synergy in action of the direct, indirect and enforcement departments of the Central Government.
7. Checking the validity of information uploaded under GST (e.g. RBI data/bank data of actual foreign inward remittance and value of service claimed as export)

The words used in Section 150 is ‘such person shall furnish the information return’. Since the intent of the provision is to procure information, the words ‘shall’ be read as mandatory obligation of such person. Hence the person to whom show cause notice is issued shall have to compulsorily provide information to the GST officer.

Power of Commissioner in case of non-compliance [Section 150 (2)]

According to sub-section (2), the consequence is that the Commissioner or Officer authorised by commissioner would consider the information return submitted ‘defective’ and intimate the defect to the person who has furnished such information return and give him an opportunity to ‘rectify’ the defect within a period of thirty days from the date of such intimation or within such further period which, on an application made in this behalf.

The Commissioner or Officer authorized by commissioner, notwithstanding anything contained in any other provisions of CGST Act, would treat that ‘no information’ has been furnished by the required person. The provisions of the Act for non-furnishing the information would apply to such person.

Removal of Defects [Section 150 (2)]

The details filed in return are found to be defective:

• Defect should be intimated to the person who has furnished such information return.
• Reasonable opportunity should be given to rectify the defect in the return.
• Defect should be rectified within a period of 30 days from the date of such
• information or within such further period.

If the defect in the return is not rectified within the time prescribed, the information return should be treated as not submitted.

Issuance of show cause notice [Section 150 (3)]

Where any person who is required to furnish information return fails to furnish information return, the Commissioner or Officer authorised by commissioner, may serve upon such person, a show cause notice requiring him to furnish such information return within a period not exceeding 90 days from the date of service of the notice and such person shall furnish the information return.

Penalty for non-compliances

Though, there is no specific penalty in section 150 for non-functioning of information return, penalty can be levied under section 123 of the CGST Act, 2017.

In terms of Section 123, if a person who is required to furnish an information return u/s 150 fails to do so within the period specified in the show cause notice, the proper officer may direct that such person shall be liable to pay a penalty of one hundred rupees for each day of the period during which the failure to furnish such return continues. However the maximum penalty that can be imposed is Rs. 5,000/-.