The promise of the Goods and Services Tax (GST) to bring clarity has finally started showing. As GST officers unleash the force of data analytics, no discrepancy or mismatch will escape their scrutiny.
Even if it’s less than one rupee. GST officers can go as far as 17 decimal points to square their accounts.
The intolerance for gaps is so extreme that a proprietor of an Ahmedabad-based engineering company received a notice from the state tax department stating there was a discrepancy of Rs 0.77999999999883585 in his tax payment.
“Please clarify difference between GSTR-1 and GSTR-3B amount of tax for the period Oct-17 to Dec-17. The Amount is Rs 0.77999999999883585,” stated the notice.
GST officers have started sending scrutiny notices to companies whose tax payment did not match the final sales return, after revenue authorities detected underpayment of GST by about 34 per cent, PTI reported. Besides, companies whose final sales return GSTR-1 did not match GSTR-2A, which is a purchase return auto-generated by system from his seller’s return, have also received scrutiny notice.
As per an analysis done by the revenue department in March, 34 per cent of businesses paid Rs 34,400 crore less tax between July-December while filing initial summary return (GSTR-3B). These 34 per cent of the businesses have paid Rs 8.16 lakh crore to the exchequer by filing GSTR-3B, whereas analysis of their GSTR-1 data show that their tax liability should have been Rs 8.50 lakh crore.
EY Partner Abhishek Jain told PTI that the activity of data analytics at the end of revenue authorities had commenced with various players receiving notices, seeking clarifications on differences between GSTR-1 and GSTR-3B as well as GSTR-2A and GSTR-3B.
While the reconciliation between GSTR-1 and 3B is to essentially verify payment of taxes for all outward supplies made, reconciliation between GSTR-2A and GSTR-3B is to ensure that credits claimed by businesses only pertain to taxes actually paid by the suppliers and there not being any loss to the government exchequer on this account, Jain said.
There is little chance that a taxpayer can delay the process or buy time. GST officers want taxpayers to respond promptly otherwise required legal action is launched without informing them. In one notice issued by Gujarat GST commissionerate on May 4, taxpayers have been asked to explain the reason for “discrepancies” in return GSTR-3B and GSTR-1 for October-December period by May 14. “If no explanation is received by the aforesaid date, it will be presumed that you have nothing to say in the matter and proceedings in accordance with law may be initiated against you without making any further reference to you in this regard,” the notice said.
The monthly GST collections crossed Rs 1 lakh crore for the first time in April, indicating that the indirect tax regime was stabilising. GST was rolled out across the country on July 1 last year.