Clarification On Amendment , Error And Rectification In GST Returns – Circular No. 26/26/2017 GST

Posted on 29-12-2017:

Click here to download the Circular: Filing of Returns under GST-Circular No. 26/26/2017-GST

F. No. 349/164/2017/-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
GST Policy Wing

New Delhi, Dated the 29thDecember , 2017

To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/ Commissioners of Central Tax (All)
The Principal Director Generals/ Director Generals (All)

Subject: Filing of Returns under GST- regarding

The GST Council, in its 23rd meeting held at Guwahati on 10th November 2017, has taken certain decisions in regard to filing of returns by taxpayers. Subsequently, various representations have been received seeking clarifications on various aspects of return filing such as return filing dates, applicability and quantum of late fee, amendment of errors in submitting / filing of FORM GSTR-3B and other related queries. In order to consolidate the information in various notifications and circulars regarding return filing and to ensure uniformity in implementation across field formations, the Board, in exercise of its powers conferred under section 168 (1) of the Central Goods and Services Tax Act, 2017 hereby clarifies the following issues:

1. Return Filing Calendar:

1.1       Dates for filing of FORM GSTR-1 and FORM GSTR-3B have been put in a calendar format for ease of understanding as under:

1.2 It may be noted that all registered persons are required to file their FORM GSTR-3B on a monthly basis in terms of Notification No. 35/2017-Central Tax(referred to as “CT‟ hereinafter) dated 15th September, 2017 and 56/2017-CT dated 15th November 2017. Further, Notification No. 71/2017-CT and Notification No. 72/2017 – CT both dated 29th December 2017 (superseding Notification No. 57/2017-CT and 58/2017-CT both dated 15th November 2017) have been issued to notify the due dates for filing of outward supply statement in FORM GSTR-1 for various months / quarters (as depicted in the calendar above) by registered persons having aggregate turnover in the previous financial year or current financial year of upto 1 .5 Crores rupees and above 1.5 Crores rupees respectively. Since, the option of quarterly filing was not available earlier, many taxpayers have already filed their FORM GSTR-1 for the month of July, such taxpayers shall not file these details again and shall only file details for the month of August and September, 2017. For those, who have not filed their FORM GSTR-1 for the month of July, they shall also file their FORM GSTR-1 for the month of July separately and then file their FORM GSTR-1 on quarterly basis for the month of August and September, 2017.

1.3 It has been further decided that the time period of filing of FORM GSTR-2 and FORM GSTR -3 for the months of July 2017 to March 2018 would be worked out by a Committee of officers and communicated later.

1.4 Registered persons opting for Composition scheme are required to file their returns quarterly in FORM GSTR-4. The due date for filing of FORM GSTR-4 for the quarter ending September 2017 has been extended to 24th December 2017 vide Notification No. 59/2017-CT dated 15th November 2017. For the remaining quarters, the last date for filing of FORM GSTR-4 is within eighteen days after the end of such quarter.

1.5 It is also clarified that the registered person will self-assess his aggregate turnover in terms of Section 2(6) of the CGST Act, 2017 for the previous financial year or the current financial year (in case of new registrants). Based on this self-assessed turnover, the registered person with turnover up to Rs. 1.5 Crore will be required to file FORM GSTR-1 on quarterly basis instead of on monthly basis. It is also clarified that the registered person may opt to file FORM GSTR-1 on monthly basis if he so wishes even though his aggregate turnover is up to Rs. 1.5 Crore. Once he falls in this bracket or if he chooses to file return on monthly basis, the registered person will not have the option to change the return filing periodicity for the entire financial year. In cases, where the registered person wrongly reports his aggregate turnover and opts to file FORM GSTR-1 on quarterly basis, he may be liable for punitive action under the CGST Act, 2017.

2. Applicability and quantum of late fee:

2.1 The late fee for the months of July, August and September for late filing of FORM GSTR – 3B has already been waived off vide Notification No. 28/2017-CT dated 1st September 2017 and 50/2017-CT dated 24th October 2017.

2.2 It has been decided that for subsequent months, i.e. October 2017 onwards, the amount of late fee payable, by a taxpayer whose tax liability for that month was „NIL‟, will be Rs. 20/- per day (Rs. 10/- per day each under CGST & SGST Acts) instead of Rs. 200/- per day (Rs. 100/- per day each under CGST & SGST Acts). For other taxpayers, whose tax liability for that month was not „NIL‟, late fee payable will be Rs. 50/- per day (Rs. 25/- per day each under CGST & SGST Acts) instead of Rs. 200/- per day (Rs. 100/- per day each under CGST & SGST Acts). Notification No. 64/2017-CT dated 15th November 2017 has already been issued in this regard.

3. Amendment / corrections / rectification of errors:

3.1 Various representations have been received wherein registered persons have requested for clarification on the procedure for rectification of errors made while filing their FORM GSTR-3B. In this regard, Circular No. 7/7/2017-GST dated 1st September 2017 was issued which clarified that errors committed while filing FORM GSTR – 3B may be rectified while filing FORM GSTR-1 and FORM GSTR-2 of the same month. Further, in the said circular, it was clarified that the system will automatically reconcile the data submitted in FORM GSTR-3B with FORM GSTR-1 and FORM GSTR-2, and the variations if any will either be offset against output tax liability or added to the output tax liability of the subsequent months of the registered person.

3.2 Since, the GST Council has decided that the time period of filing of FORM GSTR-2 and FORM GSTR -3 for the month of July 2017 to March 2018 would be worked out by a Committee of officers, the system based reconciliation prescribed under Circular No. 7/7/2017-GST dated 1st September 2017 can only be operationalized after the relevant notification is issued. The said circular is therefore kept in abeyance till such time.

3.3 The common errors while submitting FORM GSTR-3B and the steps needed to be taken to rectify the same are provided in the table annexed herewith. The registered person needs to decide at which stage of filing of FORM GSTR-3B he is currently at and also the error committed by him. The corresponding column in the table provides the steps to be followed by him to rectify such error.

4. It is clarified that as return in FORM GSTR-3B do not contain provisions for reporting of differential figures for past month(s), the said figures may be reported on net basis alongwith the values for current month itself in appropriate tables i.e. Table No. 3.1, 2, 4 and 5, as the case may be. It may be noted that while making adjustment in the output tax liability or input tax credit, there can be no negative entries in the FORM GSTR-3B. The amount remaining for adjustment, if any, may be adjusted in the return(s) in FORM GSTR­3B of subsequent month(s) and, in cases where such adjustment is not feasible, refund may be claimed. Where adjustments have been made in FORM GSTR-3B of multiple months, corresponding adjustments in FORM GSTR-1 should also preferably be made in the corresponding months.

5. Where the taxpayer has committed an error in submitting (before offsetting and filing) the information in FORM GSTR-3B, a provision for editing the same has been provided. The facility to edit the information can be used only before offsetting the liability and editing will not be permitted after offsetting the liability. Hence, every care should be taken to ensure the accuracy of the figures before proceeding to offset the liabilities.

6. It is further clarified that the information furnished by the registered person in the return in FORM GSTR-3B would be reconciled by the department‟s system with the information furnished in FORM GSTR-1 and discrepancies, if any, shall be dealt with in accordance with the relevant provisions of the CGST Act, 2017 and rules made thereunder. Detailed instructions regarding reconciliation of information furnished in FORM GSTR-3B with that contained in FORM GSTR-2 and FORM GSTR-3 will be issued in due course of time.

7. It is requested that suitable trade notices may be issued to publicize the contents of this circular.

8. Difficulty, if any, in implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow.

7 Common Error & Solutions 

Common Error– I	Stage of Return Filing (GSTR – 3B)
	Stage 1	Stage 2	Stage 3	Stage 4
	Confirmed Submission	Cash Ledger Updated	Offset Liability	Return Filed
	Return   liabilities   /   Input   tax   credit availed  were  confirmed  and  submitted and therefore no  change can  be done to the  liability.  No  action  was  taken  after this step.	Cash was added  to the electronic cash ledger as per the return liability. No action was taken after this step.	All     liabilities     were offset  by  debiting  the cash and credit ledger. No   action   was   taken after this step.	Return was filed.
Liability was under reported	Use “Edit” facility to add under reported liability.	Use  “Edit”  facility  to  add  such  liability  and additional    cash,    if    required    (i.e.    where sufficient  balances  are  not  available  in  the credit or cash ledgers) may be deposited in the cash  ledger  by  creating  challan  in  FORM GST PMT-06.	Liability  may  be  added  in  the  return  of subsequent    month(s)    after    payment    of interest.
	Company  A  has  four  units  in  Haryana, while filing their return for the month of July,    they    inadvertently,    missed    on details of a last minute order. Since, they had   already   submitted   and   confirmed their output supply details, they were not sure  of  how  to  proceed.  What  can  they do? The  company  may  use  the  „edit  return‟ facility   to   add   such   liability   in   their submitted  return  and  then  proceed  for filing of their return.	Company A has four units in Haryana, while filing their return for the month of July, they inadvertently,   missed   on   details   of   a   last minute    order.    Since,    they    had    already submitted  and  confirmed  their  output  supply details, but were not sure of how to proceed. They  added  cash  in  the  cash  to  the  extent  of their  under  reported  liability.  What  can  they do? The company may use the „edit return‟ facility to add such liability in their submitted return. Further,  the  company  may  generate  a  fresh challan   under   FORM   GST   PMT-06   to additional  cash  or  utilize  their  credit   andfurnish their return.	Company  A  has  four  units  in  Haryana, while  filing  their  return  for  the  month  of July,  they  inadvertently,  missed  on  details of  a  last  minute  order.  The  Company  had filed  their  returns  in  order  to  not  pay  late fee and other penalties. What can they do? In this case, they may report this additional liability in the return of next month and pay tax with interest.
Change in FORM GSTR-1	If such liability was not reported in FORM GSTR-1 of the month/quarter, then such liability may be declared in the subsequent month’s/quarter’s FORM GSTR-1 in which payment was made.

Common Error – II	Stage of Return Filing (GSTR – 3B)
	Stage 1	Stage 2	Stage 3	Stage 4
	Confirmed Submission	Cash Ledger Updated	Offset Liability	Return Filed
	Return   liabilities   /   Input   tax   credit availed  were  confirmed  and  submitted and  therefore  no  change  can  be  done  to the  liability.  No  action  was  taken  after this step.	Cash was added to the electronic cash ledger as per the return liability. No action was taken after this step.	All     liabilities     were offset  by  debiting  the cash  and  credit  ledger. No   action   was   taken after this step.	Return was filed.
Liability was over reported	Use    “Edit”    facility   to    reduce    over reported liability.	Use  “Edit”  facility  to  reduce  over  reported liability   and   cash   ledger   may   be   partially debited        to        offset        such        liability. Remaining  balance  may  either  be  claimed  as refund or used to offset future liabilities.	Liability   may   be   adjusted   in   return   of subsequent   month(s)   or   refund   may   be claimed where adjustment is not feasible.
	Company  B  had  reported  an  inter-State sale but realized that the same sale was counted  twice  and  hence  was  not  to  be reported.   But   the   return   form   was already  submitted  and  no  change  could be   done   to   the   liabilities.   What   can company B do? In  this  case,  Company  B  has  the  option to  use  the  “edit”  facility  to  reduce  such liability and proceed to file their return.	Company  B  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 company B do? In this case, Company B 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,   remaining   balance   can   either   be claimed  as  refund  or  used  to  offset  future liabilities.	Company B 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 company B do? In this case, they may reduce this liability in the  return  of  subsequent  months  or  claim refund of the same.
Change in FORM GSTR-1	Where  the  liability  was  over  reported  in  the  month’s  /  quarter’s  FORM  GSTR-1  also,  then  such  liability  may  be  amended through amendments under Table 9 of FORM GSTR-1

Common Error – III	Stage of Return Filing (GSTR – 3B)
	Stage 1	Stage 2	Stage 3	Stage 4
	Confirmed Submission	Cash Ledger Updated	Offset Liability	Return Filed
	Return  liabilities  /  Input  tax  credit availed      were      confirmed      and submitted  and  therefore  no  change can be done to the liability. No action was taken after this step.	Cash  was  added  to  the  electronic  cash  ledger  as  per  the  return liability. No action was taken after this step.	All    liabilities     were offset  by  debiting  the cash and credit ledger. No  action  was  taken after this step.	Return was filed.
Liability was wrongly reported	Use “Edit” facility to rectify wrongly reported liability.	Use  “Edit”  facility to rectify wrongly reported liability and  cash ledger  may  be  debited  to  offset  new  liability,  where  sufficient balances      are      not      available      in      the      credit      ledger. Remaining balance, if any may be either claimed as refund or used to offset future liabilities.	Unreported liability may be added in the next month‟s return with interest, if applicable. Also,  adjustment  may  be  made  in  return  of subsequent   month(s)   or   refund   may   be claimed where adjustment is not feasible.
	Company C is registered in the State of   Haryana.   While   entering   their outward  supplies  in  FORM  GSTR- 3B,  the  company  realized  that  they had  inadvertently,  shown  inter-State supply   as   intra-State   supply   and submitted  the  return.  What  can  they do? In this case, the company will have to rectify    wrongly    reported    liability using   the   edit   facility.   Here,   the company  will  reduce  their  Central Tax /  State tax supplies and liability and  add  integrated  tax  liability  and proceed to file their return.	Company C is registered in the State of Haryana. While entering their outward supplies in FORM GSTR-3B, the company 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? In  this  case,  the  company  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.	Company  C  was  registered  in  the  State  of Haryana.    While    entering    their    outward supplies  in  FORM  GSTR-3B,  the  company realized  that  they  had  inadvertently,  shown inter-State  supply  as  intra-State  supply  and submitted the return. The company paid their wrong liability and filed their return in order to avoid late fee and penalty? What can they do? Since, the return has already been filed, then the  company  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  months  returns  or claim refund of the same.
Change in FORM GSTR-1	Such taxpayers will have to file for amendments by filling Table 9 of the subsequent month’s / quarter’s FORM GSTR-1.

Common Error – IV		Stage of Return Filing (GSTR – 3B)
		Stage 1	Stage 2	Stage 3	Stage 4
		Confirmed Submission	Cash Ledger Updated	Offset Liability	Return Filed
		Return  liabilities  /  Input  tax  credit  availed were  confirmed  and  submitted  and  therefore no  change  can  be  done  to  the  liability.  No action was taken after this step	Cash was added to the electronic cash ledger as per the return liability. No action was taken after this step.	All liabilities were offset by debiting the  cash and credit  ledger.  No  action was taken after this step.	Return was filed.
Input tax credit was under reported		Use ‘Edit” facility to add un-availed input tax credit.  Input  tax  Credit  will  be  added  to  the credit  ledger  and  may  be  used  for  offsetting this month or subsequent month‟s liability.	No Action required in cash ledger	Input  tax  credit  which  was  not  reported  may  be availed    while    filing    return    for    subsequent month(s).
		Company D, while filing their FORM GSTR – 3B   for   the   month   of   July,   inadvertently, misreported     Input     tax     credit     of     Rs. 1,00,00,000/-  as  Rs.  10,00,000/-.    They  had confirmed  and  submitted  their  return.  What can they do? The  company  may  use  the  “edit”  facility  to add  more  Input  tax  credit  to  their  submitted FORM  GSTR-3B.  Once,  this  is  done,  such credit  will  be  reflected  in  their  Electronic Credit  ledger  and  may  be  utilized  to  offset liabilities  for  this  month  or  for  subsequent months.	No Action required in cash ledger	Company D, while filing their FORM GSTR – 3B for  the  month  of  July,  inadvertently,  misreported Input   tax   credit   of   Rs.   1,00,00,000/-   as   Rs. 10,00,000/-.  They had filed their return and paid Rs. 90,00,000/- in cash.  What can they do? Since, the return has already been filed, Company D may add such Input tax credit in their return for subsequent month(s).
Change in FORM GSTR-1		No Action

Error – V	Stage of Return Filing (GSTR – 3B)
	Stage 1	Stage 2		Stage 3	Stage 4
	Confirmed Submission	Cash Ledger Updated		Offset Liability	Return Filed
	Return   liabilities   /   Input   tax   credit availed  were  confirmed  and  submitted and  therefore  no  change  can  be  done  to the  liability.  No  action  was  taken  after this step.	Cash was added to the electronic cash  ledger as per the return liability. No action was taken after this step.		All     liabilities     were offset  by  debiting  the cash  and  credit  ledger. No   action   was   taken after this step.	Return was filed.
Input tax credit was over reported	Use  “Edit”  facility  to  rectify  the  over reported input tax credit	Additional cash, if required, may be deposited in   the   cash   ledger   by   creating   challan   in FORM GST PMT-06		Pay  (through  cash)  /  Reverse  such  over reported  input  tax  credit  with  interest  in return of subsequent month (s).
	While  filing  their  FORM  GSTR  3B  for the  months  of  July,  2017,  Company  E inadvertently,    reported    their    eligible input   tax   credit,   as   Rs.   20,00,000/- instead of Rs. 10,00,000/-. What can they do? Since, the company has submitted details of their input tax credit but not used such credit for offsetting their liabilities, they can reduce their input tax credit by using the “edit” facility.	While  filing  their  FORM  GSTR  3B  for  the months     of     July,     2017,     Company     E inadvertently, reported their eligible input tax credit,   as   Rs.   20,00,000/-   instead   of   Rs. 10,00,000/-. What can they do? Since,  the  company  has  submitted  details  of their input tax credit but not used such credit for offsetting their liabilities, they can reduce their   input   tax   credit   by   using   the   “edit” facility.    Since,    they    have    deposited    Rs. 10,00,000/-   only   in   their   input   tax   credit ledger    they    may    deposit    additional    Rs. 10,00,000/-  in  the  cash  ledger  by  creating challan in FORM GST PMT-06.		While filing their FORM GSTR 3B for the months    of    July,    2017,    Company    E inadvertently,  reported  their  eligible  input tax credit, as Rs. 20,00,000/- instead of Rs. 10,00,000/-.  Company  E  also  utilized  their additional  input  tax  credit  and  filed  their returns. What can they do? Since,  the  company  had  utilized  ineligible credit to offset such liabilities, the company will  have  to  pay  (through  cash)  /  Reverse such over reported utilized input tax credit with interest.
Change in FORM GSTR-1	No Action

Common Error – VI	Stage of Return Filing (GSTR – 3B)
	Stage 1	Stage 2	Stage 3		Stage 4
	Confirmed Submission	Cash Ledger Updated	Offset Liability		Return Filed
	Return   liabilities   /   Input   tax   credit availed  were  confirmed  and  submitted and  therefore  no  change  can  be  done  to the  liability.  No  action  was  taken  after this step	Cash   was   added   to   the   electronic   cash ledger as per the return liability. No action was taken after this step.	All  liabilities  were  offset by  debiting  the  cash  and credit  ledger.  No  action was taken after this step.		Return was filed.
Input Tax Credit of the wrong tax was taken	·   “Edit”  facility  to  be  used  to  rectify such liability. ·   New Input tax credit will be added to the credit ledger. ·   Input   tax   credit   reduced   will   be adjusted  in  the  credit  ledger  without any additional liability	Additional    cash,    if    required,    may    be deposited  in  the  cash  ledger  by  creating challan in FORM GST PMT-06	Pay(through   cash)   /   Reverse   any   wrongly reported    input    tax    credit    in    return    of subsequent                                          month(s). For  under  reported  input  tax  credit,  the  same may   be   availed   in   return   of   subsequent month(s).
	While  filing  their  FORM  GSTR  3B  for the  months  of  July,  2017,  Company  E inadvertently, reported their Central Tax credit  of  Rs.  20,00,000/-  as   Integrated tax. What can they do? Use edit facility to claim correct central tax credit under the right head.	While filing their FORM GSTR 3B for the months    of    July,    2017,    Company    E inadvertently,  reported  their  Central  Tax credit of Rs. 20,00,000/- as Integrated tax. What can they do? They   can   use   “edit”   facility   to   correct central tax credit under the right head. For offsetting    any    integrated    tax    liability, additional  cash  may  be  deposited  in  the cash  ledger  by  creating  challan  in  FORM GST PMT-06.	While  filing  their  FORM  GSTR  3B  for  the months     of     July,     2017,     Company     E inadvertently,   reported   their   Central   Tax credit  of  Rs.  20,00,000/-  as  Integrated  tax credit. In order to avoid late fee and penalties, they paid Rs. 20,00,000/- Central Tax in cash and did not utilize their Integrated tax credit. What                can                they                do? Since,  the  company  has  filed  the  returns  and there is  an  unutilized  Integrated  tax  credit  of Rs.   20,00,000/-   which   was   inadmissible   to them,  they  will  have  to  pay  /  reverse  such credit  in  the  return  of  subsequent  month(s). Further, Central Tax credit of Rs. 20,00,000/- can   be   availed   in   return   of   subsequent month(s).
Change in FORM GSTR-1	No Action

Common Error – VII	Stage of Return Filing (GSTR – 3B)
	Stage 1	Stage 2	Stage 3	Stage 4
	Confirmed Submission	Cash Ledger Updated	Offset Liability	Return Filed
	Return   liabilities   /   Input   tax   credit availed   were   reported   correctly   and thereafter    confirmed    and    submitted. Therefore  no  change  is  required  to  be done to the liability. No action was taken after this step.	Cash was added to the electronic cash ledger as per the return liability. No action was taken after this step	All     liabilities     were offset  by  debiting  the cash  and  credit  ledger. No   action   was   taken after this step	Return was filed.
Cash ledger wrongly updated	No Action	Add     cash     under     the     right     tax     head and seek cash refund of the cash added under the wrong tax head.	No Action
	No Action	While  filing  their  FORM  GSTR-3B  return, Company F while generating payment challan added  Rs.  5,00,000/-  under  the  Central  Tax head,   while   they   wanted   to   deposit   Rs. 5,00,000/-   under   the   integrated   tax   head. What can they do? Since,  they  have  already  filed  their  challan, they  will  have  to  add  Rs.  5,00,000/-  in  their integrated  tax  head  and  file  their  returns. Further,    they    may    seek    refund    of    Rs. 5,00,000/- from their cash ledger.	No Action
Change in FORM GSTR-1	No Action