Rajat Negi

Basic GST mismatch

Screenshot 2022 06 05 152532 - Basic GST mismatch

What will happen if I filed GST return with the wrong figures? Well, this is a case of GST mismatch. GST mismatch is not but the input of wrong figures while filing GST returns from the supplier side. Well, It runs on the blockchain method. 

The obligation to pay tax under the GST framework arises at the point of supply, as decided for goods and services. As a result, every registered person should calculate his tax due every month using input tax credit against outward tax liability and make the balance liability payment. On a monthly or annual basis, all registered taxpayers must submit several GST forms.

On a monthly or annual basis, all registered taxpayers must file several GST forms.

There is a possibility of an input tax credit discrepancy between GSTR-3b and the auto-generated GSTR-2A.

Due to a temporal lag in reporting, there may be a GST mismatch in outward supply between GSTR-1 and GSTR-3B. In Other Words, we can say that there is a GST mismatch between sale and purchase for a particular supplier.

Notice of GST mismatch

The GST department has the authority to send a notice if you break one of the GST laws, such as

Tax underpayment/nonpayment, incorrect refund claims, and incorrect input tax credit claims.

Section 73 deals with circumstances when there is no intention or invocation of deception in the non-payment or underpayment of tax.

Section 74 refers to the Determination of tax not paid, short paid, erroneously returned, or input tax credit mistakenly availed or exploited as a result of fraud or any deliberate misrepresentation or concealment of facts.

If both of these scenarios occur, a taxpayer can make a voluntary payment of tax, including interest and penalties, as well as the GST late charge, within 30 days of receiving the notification. If that fails, the department will take whatever action it deems appropriate.

GST returns and correction in the GST mismatch

GSTR-2A is nothing more than purchase information generated by the system from GSTR-1.

GSTR-1 is a monthly/quarterly return that taxpayers must complete to report their outgoing supplies for the month/quarter, as well as their tax due. It simply includes those invoices that supplies have issued to its customers.

GSTR-3B is a monthly summary return in which the taxpayer must disclose his external supply, tax due, claimed input tax credit, and so on. It simply includes all of the purchase invoices generated by the provider.

There may be some reporting inconsistencies between the GSTR-1 and GSTR-3b responses.

  • The difference between GSTR-1 and GSTR-3B in terms of invoice reporting timing.
  • The debit/credit note is issued one month after the invoices are sent out.
  • GSTR-3B reports supplies under the wrong table, although GSTR-1 reports them appropriately.
  • Interstate supplies to unregistered persons are no longer recorded in GSTR-3B, although they are accurately reported in GSTR-1.
  • The amount of tax paid is presented under the incorrect heading. For example, instead of CGST and SGST, use IGST.

Different scenarios of GST mismatch

  • GST mismatches are a common occurrence.
  • TRANS-I and TRANS-II both claim transitional credit.
  • Goods and services received in FY2017-18 but used in FY2018-19 are referred to as ITC.
  • The supplier forgot to upload the invoice in his GSTR-1, and as a result, the invoice is not reflected in the recipient’s GSTR-2A. Since the supplier has not uploaded the invoice, the registered buyer won’t be able to claim the input tax credit. 
  • In GSTR-1, the supplier declared inaccurate excess/duplicate outbound supply, while the recipient did not record the same in his GSTR-3B.
  • The recipient claims the IGST credit on services imported in GSTR-3B, whereas the provider is not needed to fill out the matching GSTR-1 because it is an import.

Result of GST mismatch

Any extra credit claimed by the taxpayer as a result of certain discrepancies must be paid, as well as interest. In other circumstances, the mismatches must be reported to the supplier, who must make the appropriate corrections if the problem is his fault. 

If the invoice is not paid or corrected on time, the department may issue a demand notice.

Final Words

Well, I suggest you be careful while filing a GST return so that you won’t face any GST mismatch issues. 

Also, before submitting GSTR-9, a taxpayer should reconcile his books and returns and take remedial action on any mismatches in the return, as well as remedy any discrepancies in the books of accounts, if necessary. The consistency of data reported in all returns, i.e. GSTR-3B, GSTR-1, GSTR-2A, and GSTR-9, is ensured through timely action on inconsistencies.

I hope, I gave you some insights about GST mismatch and delivered it in the best possible way. 

DO SHARE THIS ARTICLE with your friends or family who are not aware of the GST mismatch.  You can tweet out your thoughts by tagging me @rajatinr on Twitter.

To your Success

-Rajat Negi, Logging Out 🤗

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Rajat Negi

Compound Investor (Who loves to talk to stock)
Digital Marketer (Who loves to make brands)

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