HC allows rectification of GSTR-1 after expiry of statutory time limit

This Tax Alert summarizes a recent ruling[1] of Orissa High Court (HC) allowing rectification of GSTR-1 return filed for the period September 2017 and March 2018.

Assessee in the present case had inadvertently reported supplies to a particular recipient as B2C supplies instead of B2B in its GSTR-1 return. This error resulted in recipient holding up the running bill amount of the assessee.

Assessee requested Revenue to permit it to correct its GSTR-1 return, but the same was rejected on the ground that the timeline to apply for rectification was over. Aggrieved, assessee filed a writ petition before the Orissa HC.

HC observed that there will be no loss to Revenue in allowing assessee to rectify the above error. It was not a case of escapement of tax, but the benefit of input tax credit (ITC) which in any event has to be given. If not permitted, then the assessee will be unnecessarily prejudiced.

The Court relied on the order of the Madras HC[2] wherein, in similar circumstances, plea of assessee was accepted, and it was allowed to file the corrected form.

Accordingly, HC permitted assessee to submit the corrected GSTR-1. Court further directed Revenue to receive the same manually and thereafter facilitate the uploading of details on the web portal.

Comments

Taxpayers who have committed similar errors in the initial phase of introduction of GST may rely on this judgement to rectify their GSTR-1.

CBIC had issued Circular No. 183/15/2022 dated 27 December 2022 to deal with cases where ITC availed in GSTR-3B was different from amount reflected in GSTR-2A for FY 2017-18 and 2018-19 due to incorrect details furnished by the supplier in GSTR-1.

Karnataka HC [2023-VIL-22-KAR] in its recent judgement on similar facts, observed that the above Circular would be directly applicable to such cases.

^{[1] TS-79-HC(ORI)-2023-GST
[2]WP no. 29676 of 2019}