Aim is to cut down on unnecessary litigation
New Delhi: The Central Board of Indirect taxes and Customs (CBIC) is working on a new advanced invo-ice management system that will prevent system-generated notices being sent automatically to taxpay-ers for mismatch in the goods and services tax (GST) returns.
The idea is to cut down on unne-cessary litigation and allow taxpa yers to fix discrepancies in disclo sures and details between various GST forms directly on the portal, officials said.
The move will stop about 200,000 GST mismatch notices issued eve-ry year, involving nearly Rs 10 lakh crore in disputes, they said.
This new technical enhance-ment is going to be a game changer for our litigation management and will prevent all such system-gene rated notices, which end up in un-necessary litigation…and collec tions were miniscule,” a senior of-ficial told ET. The official added that the work on the software is on and the new system will be ready in another 2-3 months.
We were initially aiming to launch it simultaneously with the implementation of new GST rates, but the software required some more work,” the person said.
Mismatch-related notices had been a major pain point for the industry.
For compliances under GSTlaws, there are multiple data points, such as the details of outward supplies submitted in form GSTR 1, details of inward supplies recei ved in forms GSTR 2A and 2B, form GSTR 6 for distribution of input tax credit, and form GSTR 3B, which is monthly return for pay-ment of taxes, covering all details of supplies, tax payment etc.
In case of any mismatches betwe-en disclosures and details in these forms, the tax authorities send a mismatch notice where the taxpay-er needs to provide a clear explana-tion with reconciliations.
Many of these discrepancies ari-se due to timing differences or cor-rection of manual errors,” said Karthik Mani, partner, indirect tax, at BDO India. However, the tax aut-horities send notices for every mis-match, requiring the businesses to spend time providing detailed ans-wers to each notice.
He said such mismat-ches are generally add-ressed at the time of pre-paration of the annual returns, where the taxpayers reconcile all the data as per the GST filings as well as the financial statements.
It would be more trade friendly, if the mismatch-related reconcili-ations and options to correct the differences are provided as part of the forms for GST annual re-turns,” Mani said. This would provide data comfort to the tax aut-horities and opportunity to amend mismatches to the taxpayer, witho-ut having to spend time regularly in responding to mismatches.
Currently there is GSTR form 1A, allowing the users to make changes in the invoice, which is from the out-ward side. From the inward side is the invoice management system. But the facilities are optional, and
