INTRODUCTION - Handbook of GST Law & Procedures (CBIC) [October 2024] - GST

CHAPTER III RETURNS SCRUTINY THEREOF 1. INTRODUCTION 1.1. In every taxation system the liability of tax payable by a person has to be determined and assessed. The GST law provides for various kinds of assessment. Self-assessment of the tax liability is one of them. Every registered taxable person is required to himself assess his liability of taxes payable and furnish a return for each tax period. 1.2. The provisions of CGST Act, 2017 and CGST Rules, 2017 relevant to this Chapter are as under Sr. No. Section/ Rules Provisions pertaining to 1. Section 37 and Rule 59 Furnishing details of outward supplies 2. Section 38 and Rule 60 Furnishing details of inward supplies 3. Section 39 and Rule 61 Furnishing of returns 4. Section 10 Annual return filed by Composition Scheme taxpayers 5. Section 40 First return 6. Section 44 and Rule 80 Filing annual returns 7. Section 45 and Rule 81 Filing of return by taxpayers whose registration is cancelled 8. Section 46 and Rule 68 Notice to return defaulters 9. Section 47 Levy of late fee 10. Section 50 Interest on delayed payment of tax 11. Section 61 Scrutiny of returns 12. Section 62 Assessment of Non-Filers of returns 13. Section 83 Provisional attachment to protect revenue in certain cases 14. Rule 63 Submission of return by non-resident taxable person 15. Rule 64 Submission of return by persons providing online information and database access or retrieval services 16. Rule 65 Submission of return by Input Service Distributor 17. Rule 67 Form and manner of submission of statement of supplies through an e-commerce operator 18. Rule 67A Manner of furnishing of return or details of outward supplies by SMS facility 19. Rule 68 Notice to Non-Filer 20. Section 125 Delay in filing GSTR-9C attracts general penalty 21. Rule 82 Details of inward supplies of persons having UIN 22. Rule 99 Scrutiny of returns 1.3. A GST return is a document containing details of all purchases, sales, taxes paid on purchases (input tax) and taxes collected on sales (output tax). A GST Taxpayer (every taxpayer holding GSTIN) is required to file the return electronically on the GST Common Portal. Return is the basis for assessment and an important aspect under GST law, as all control over the tax paid and input tax credit availed is on the basis of return filed by the Taxpayer. 1.4. There are a whole lot of activities that form a part of the process of Returns under GST. These include: Filing different types of GST returns electronically. Uploading invoice wise details. Auto-population of details with regards to input tax credit from returns filed by suppliers to return filed by recipients. Matching of invoice information. Automatic reversal of ITC in the event of mismatch of the invoice information. 1.5. The returns filed by the Taxpayer are scrutinised by the proper officer to verify the correctness of the tax liability discharged on the supplies made by such Taxpayer. If any discrepancies are observed, then the officer may ask for an explanation from the Taxpayer and if the explanation is not found satisfactory then he may initiate further proceedings, as provided under the CGST Act, 2017 and the rules made thereunder for recovery of the tax short-paid or not paid or input tax credit wrongly availed. 1.6. In GST the basic features of the return mechanism include electronic filing of returns, uploading of invoice level information, auto-population of information relating to input tax credit from returns of supplier to that of recipient, invoice level information matching and auto-reversal of input tax credit in case of mismatch. The returns mechanism is designed to assist the taxpayer to file returns and avail ITC. 1.7. The provisions under Section 37 to Section 40 of the CGST Act, 2017 stipulate the various types of Returns to be filed under the GST law. The type (Form) and manner of furnishing the returns by various class of Taxpayers is provided under Rule 59 to 67A of the CGST Rules, 2017. 1.8. A regular Taxpayer has to furnish monthly returns and one annual return. The GST law also provides a facility called Quarterly Return Monthly Payment (QRMP), for the Taxpayers with turnover less than Rs. 5 Crore during the preceding financial year and current financial year, under which the returns in FORM GSTR-3B and FORM GSTR-01 are required to be filed on Quarterly basis with monthly payment of tax. As per Notification No. 84/2020-Central Tax dated 10.11.2020, a registered person who is required to furnish a return in FORM GSTR-3B and has an aggregate turnover upto Rs. 5 Crore in the preceding financial year, is eligible for the QRMP scheme, whereunder such person can opt to file the return on Quarterly basis. However, the tax payment shall be on monthly basis. Circular No. 143/13/2020-GST dated 10.11.2020, issued by CBIC provides the details of the QRMP Scheme and the clarifications thereof. 1.9. Taxpayers are mandatorily required to file returns, depending on the activities they undertake. There are separate returns for the Taxpayer registered under the Composition Scheme, Non-resident Taxpayer, Taxpayer registered as an Input Service Distributor, a person liable to deduct or collect the tax (TDS/TCS), a person granted Unique Identification Number, etc.