Concept of revision of Tax returns is a very usual and vital part of the tax system as it allows taxpayers to rectify unintentional errors made while filing tax returns. Every tax system including income tax provides a facility to revise tax returns upto specified time period. Under pre-GST regime as well, taxpayers were available with the option file revised VAT, Central Excise and Service Tax return. However, Goods and Service Tax has not yet provided that facility to revise GST returns to the taxpayers.
Any error in GSTR-1 can be rectified by making amendment in GSTR-1 of future period under Amendment tabs upto specified period. However, there is no option to amend the incorrect information furnished in GSTR-3B. Due to non-availability of option to revise GST return, many taxpayers have received Show Cause Notice under GST DRC-01 on accounting of discrepancy in GST returns and this has increased litigations.
However, there is good news for taxpayers as the GST portal may soon roll out the option to file revised GST returns.
1. Option of filing of revised GST return
The Central Board of Indirect Taxes and Customs (CBIC) is finalising the proposal’s details to allow taxpayers to revise GST returns. There after, Such proposal shall be considered by the GST Council law committee. Later, The proposal will finally be forwarded to the GST Council for final decision.
The provision may be initially launched for yearly returns and then expanded to bring quarterly ones under its ambit.
As per GST officials, The GST network will need a major upgrade if the proposal gets approved. The Centre will be able to implement the new facility by April, 2025 if everything goes well.
2. Benefit of providing option to revise GST return
Allowing taxpayers to file updated GST returns or revise GST returns will reduce the litigation in cases where taxpayers had no intention to evade the tax. Any unintentional mistake or calculation error can be resolved by filing revised or updated GST returns.
As per statistics, Tax officials have sent around 33,000 GST notices to businesses for discrepancies in returns filed and short payment of taxes in the 2017-18 and 2018-19 financial years.