GST UPDATE ON MADRAS HIGH COURT DECISION ALLOWING RECTIFICATION OF GSTR-1 149/2020-21

GST UPDATE ON MADRAS HIGH COURT DECISION ALLOWING RECTIFICATION OF GSTR-1:-

In GST Laws, there is stringent timeline for availing input tax credit and for making amendments in the returns filed. For the financial year 2017-18, the last date for rectifying the returns was 31.03.2019 but as the GST law is new and in view of the fact that the deadlines have been extended from time to time, it is justifiable to deny amendment in genuine cases after the stipulated time? This issue was recently dealt by the Hon’ble Madras High Court in the case of M/S SUN DYE CHEM [W.P. NO. 29676 OF 2019] wherein the issue was rectification of GSTR-1 wherein the intra state sales were mistakenly reflected as inter-state sales. As the recipient of the petitioner was posing difficulty in claiming credit due to reflection of IGST credit instead of CGST and SGST, the petitioner requested to amend GSTR-1 which was rejected on the grounds that the last date for amendment for the financial year 2017-18 was 31.03.2019. The petitioner was informed that as they made request on 16.08.2019 seeking rectification of GSTR-1, much after the stipulated date, i.e., 31.03.2019, the officer was handicapped and could not grant them any relief and that only government can help them by amending the timelines as per section 164 of the Act, upon recommendation of the GST Council.

After referring to the provisions contained in section 37, 38 and 39 of CGST Act, 2017 pertaining to filing of returns, it was held that the provisions of mismatch to be notified by the recipient of goods/service in FORM GSTR-1A and GSTR-2A are not yet operational. It was held that reflection of details in IGST column instead of CGST/SGST is inadvertent error and the customer of the petitioner would be denied legitimate credit merely due to wrong reflection in the column. The hon’ble High Court held that since the matching concept as contemplated is not yet operational, the mistake could not be identified at earlier stage. Hence, the error committed by the petitioner is an inadvertent human error and petitioner should be in position to rectify the same manually, particularly, in the absence of enabling mechanism under the Statue.

This decision is a boon to the assessees who have committed mistakes for which no rectification is possible as of now. It is pertinent to mention that this is not the first time that the High Court have granted relief to the petitioner for non-implementation of matching concept. On earlier occasion, the Hon’ble Delhi High Court allowed manual rectification of GSTR-3B in the case of M/s BHARTI AIRTEL LTD. in the absence of mechanism to verify the input tax credit available to the petitioner as the FORM GSTR-2A was not operational for the financial year 2017-18. It is very common that the assessees have committed lot of mistakes during the initial years of GST implementation and so lenient view is to be taken as regards compliance of timelines for rectification of genuine mistakes.

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GST UPDATE ON MADRAS HIGH COURT DECISION ALLOWING RECTIFICATION OF GSTR-1 149/2020-21

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