Government Notifies Rectifiable GSTR-1A, Pan-India Aadhaar Authentication
The GST council also approved pan-India rollout of biometric-based Aadhaar authentication for new registrations to prevent frauds.
The government on Thursday notified about pan-India Aadhaar authentication, following decisions made during the 53rd Goods and Services Tax Council meeting. These include the introduction of the new GSTR-1A form and a reduction in the threshold for reporting B2C inter-state supplies.
The introduction of the GSTR-1A form is expected to provide considerable relief to taxpayers by allowing them to rectify their GSTR-1 submissions, which detail outward supplies of goods or services. However, such amendments must be made before filing the GSTR-3B for the corresponding tax period.
GSTR-1 serves as a sales return, while GSTR-3B consolidates all sales, purchases, taxes owed, and credits claimed.
Monthly filers typically update GSTR-1 by the 11th day of the following month, and quarterly filers by the 13th day of the month following the quarter's end.
Similarly, taxpayers file GSTR-3B by the 20th of the subsequent month, or by the 22nd/24th for quarterly filers, with details often auto-populated from GSTR-1.
By allowing for the rectification of the GSTR-1, it should curb inadvertent errors between GSTR-1 and GSTR-3B and resultant unwarranted disputes on routine reconciliation, according to Abhishek Jain, indirect tax head and partner at KPMG.
Jain noted that enabling provisions for allowing correction of GSTR-1 is a welcome move and should help businesses, while not significantly impacting the input tax credit reconciliation process.
"This amendment not only minimizes the risk of penalties and interest due to incorrect filings but also significantly reduces the compliance burden, underscoring the CBIC's commitment to a more responsive and taxpayer-friendly GST regime," Rajat Mohan, Moore Singhi's Executive Director told PTI.
The council has recommended for the insertion of a functionality by way of form GSTR-1A, which would allow a taxpayer to add any particulars of current tax period which he/she may have missed out on in reporting in the GSTR-1.Union finance minister Nirmala Sitharaman while announcing outcomes of 53rd GST Council Meet
Pan-India Aadhaar Authentication
Following successful pilots in Gujarat and Puducherry, the GST council in June also approved the pan-India rollout of biometric-based Aadhaar authentication for new registrations in an attempt to prevent fraudulent input tax credit claims made through fake invoices. The new notification released by the government on July 10 includes an amendment in Rule 8 to realise the same initiative.
In terms of B2C inter-state supplies, the threshold for reporting B2C inter-state supplies invoice-wise in Form GSTR-1 was recommended to be reduced from Rs 2.5 lakh to Rs 1 lakh in the last council meeting. The change is expected to come into effect from Aug. 1, 2024.
The move, which is expected to lead to an increase in the invoice-wise reporting of B2C transactions, also finds a mention in the amended rule 59 and 60 of the notification, Ritesh Kanodia, partner for indirect tax at Aurtus Consulting, told NDTV Profit.
And in terms of corporate guarantees, clarifications issued at the council meeting were put into effect.
In cases of corporate guarantee services between related parties and where the recipient is eligible for full input tax credit, the invoice value being considered as taxable value comes as a big relief for businesses, says KPMG's Jain.
"The restriction of the deemed valuation (1% per annum) to only domestic transactions would as well be helpful, given continuance of arms length pricing being possible for international related entity transactions," Jain added.
