GST Update

 Desk of CA Praveen Sharma – 937 Series (CAPS) 

In the case of Sterling & Wilson Pvt. Ltd., the GST Appellate Authority dealt with an appeal relating to mismatch between GSTR-1 and GSTR-3B for FY 2018–19.

The company, an EPC contractor, had challenged the tax demand raised on account of difference in turnover reported in GSTR-1 and GSTR-3B. The original authority had raised tax, interest and a substantial penalty alleging short payment of tax. In the first appeal, tax and interest were upheld, but the penalty was reduced as there was no clear finding of fraud.

The appellant submitted that the mismatch arose due to credit notes, debit notes and adjustment of advances pertaining to different periods. These were recorded in the books and reflected in GSTR-3B, but corrections could not be made in GSTR-1 because of technical limitations on the portal.

The department argued that the reconciliation was not properly supported by statutory documents and that certain credit notes were beyond the permissible time.

The Tribunal observed that in a second appeal, it has wide powers to examine both facts and law. It found that there was no clear evidence of fraud or suppression. However, it noted that proper verification of reconciliation and supporting documents was required.

Accordingly, the earlier orders were set aside to that extent and the matter was remanded to the Proper Officer for fresh adjudication after giving opportunity of hearing. The appellant was allowed to file necessary amendments within one month.

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Regards
CAPS