How to File Rectification in GST?

Goods and Services Tax (GST) is a very remarkable indirect tax reform in India. Every registered taxpayer must comply with the GST regulations and rules, which include filing timely and accurate returns. However, mistakes can happen while filing returns, leading to the need for rectification. Rectification of GST returns is essential to compliance with the regulations, avoiding unwanted penalties, and ensuring the accurate and clear reporting of tax liabilities and various other complications and complexities that hamper the process of GST filing.

This article will deal with detailed guidelines on how to rectify errors in GST filings, common mistakes and their resolution process, rectification procedures, deadlines, and FAQs and will cover some other aspects as well.

Understanding GST Rectification

Rectification in GST refers to making corrections to the errors during the process of GST returns filed by taxpayers. Mistakes can arise in invoice details, tax amounts, HSN codes, GSTIN numbers, or missing transactions. The GST laws allow rectifications within specified time limits to maintain compliance and avoid penalties and other complexities that hamper the process of GST filing.

Common Errors in GST Returns Requiring Rectification

Some mistakes and errors in GST returns may arise due to various reasons, including clerical mistakes, technical errors, incorrect data entry, incorrect calculations or system glitches. Some of the common errors include:

1. Incorrect GSTIN: Entering an incorrect GST Identification Number (GSTIN) while filing returns.
2. Wrong Tax Amount: Errors in tax calculation may lead to underpayment or overpayment.
3. Mismatched Invoice Details: Discrepancies in invoice numbers, dates, or amounts between GSTR-1 (outward supply) and GSTR-2A (auto-populated inward supply).
4. Omitted Invoices: Forgetting to include certain invoices in the returns.
5. Wrong HSN/SAC Codes: Incorrect classification of goods and services, leading to incorrect tax rates.
6. Reversal of Input Tax Credit (ITC): Errors in claiming ITC against non-eligible invoices.

Legal Provisions for GST Rectification

Section 39(9) of the CGST Act allows rectification of errors in GST returns within the due date of furnishing returns for September of the following financial year or before filing the annual return, whichever is earlier.

Key Points:

• Rectifications can only be made in the subsequent return.
• No rectification is allowed once the annual return (GSTR-9) is filed.
• Errors leading to tax shortfall must be paid with interest.
• Rectifications affecting Input Tax Credit (ITC) should be reflected in GSTR-2B and GSTR-3B accordingly.

Process of Rectifying Errors in GST Returns

GST laws allow taxpayers to rectify mistakes in subsequent return periods within specified deadlines. Below is a step-by-step guide to rectifying errors in GST returns:

1. Rectifying GSTR-1 Errors

GSTR-1 is a process that can be a monthly or quarterly return for reporting supplies outward. If errors occur, they can be rectified in subsequent GSTR-1 filings.

Steps to Rectify GSTR-1 Errors:

1. Login to the GST Portal: Visit gst.gov.in and log in using your credentials.
2. Navigate to GSTR-1: Go to ‘Returns Dashboard’ and select the tax period for the upcoming filing.
3. Modify Incorrect Details:
   • If an incorrect invoice was reported, add the correct invoice and mark the wrong one as ‘Amended’.
   • If an invoice was omitted, include it in the next return.
4. Submit and File: After rectification, validate the return and file it using a Digital Signature Certificate (DSC) or an Electronic Verification Code (EVC).

2. Rectifying GSTR-3B Errors

GSTR-3B is a summary return for reporting tax liabilities and ITC. Since it does not have an amendment option, corrections must be made in future filings.

Steps to Rectify GSTR-3B Errors:

1. Underpaid Tax: Pay the shortfall using the ‘Payment of Tax’ option in the next return.
2. Overpaid Tax: Adjust the excess tax against future tax liabilities or claim a refund using Form RFD-01.
3. Incorrect ITC Claims:
   • If excess ITC was claimed, reverse the excess in the next return under ‘ITC Reversal’.
   • If ITC was underclaimed, claim the correct amount in the following period.

3. Rectifying GSTR-9 (Annual Return) Errors

GSTR-9 is the annual return summarizing yearly transactions. If errors occur, they can be corrected in the next return before the deadline.

Steps to Rectify GSTR-9 Errors:

1. Compare Data: Match details with GSTR-1, GSTR-3B, and books of accounts.
2. Make Corrections in Books: Adjust mismatches in the following financial year’s returns.
3. File GSTR-9C: If applicable, get the reconciliation statement audited by a Chartered Accountant.

Deadlines for GST Rectifications

GST rectifications are allowed only within specified time limits:

• For GSTR-1 & GSTR-3B: Rectifications must be made before September 30th of the following financial year or before the annual return is filed, whichever is earlier.
• For GSTR-9: Corrections can be made while filing before the due date, usually December 31st.
• For Refund Claims: Corrections related to excess tax paid can be filed within two years from the relevant date.

Consequences of Not Rectifying Errors

Failure to rectify GST errors can lead to:

• Penalty and Interest: Interest on tax shortfalls and penalties for incorrect returns.
• Input Tax Credit Denial: Suppliers may face ITC rejection if invoices are incorrect.
• GST Notices and Audits: The department may issue notices for discrepancies.

Conclusion

Filing GST returns accurately is essential to ensure compliance and avoid penalties because it’s a very essential and critical process in which there are chances of errors and mistakes, so you need to be very careful about it otherwise, you face various consequences to avoid those complexities you must be careful during that process for filing of GST. However, if errors occur, they must be rectified within the prescribed deadlines through subsequent filings, otherwise it may disturb the entire process of GST filing and you may face various hampering element. Understanding the rectification process helps businesses avoid unnecessary tax liabilities and maintain good standing with tax authorities. Always keep records of corrections and consult a tax expert for complex cases. It’s always advisable to consult with a financial expert or any Chartered accountant to get a better understanding of the regulations and the entire process of GST return filing so that you can avoid silly mistakes that can cause a problem for you.

Frequently Asked Questions

1. Can I rectify GST returns after filing?

Yes, errors in GST returns can be rectified in subsequent periods within the allowed deadlines.

2. What happens if I miss the rectification deadline?

You may have to pay penalties and interest or submit a revised statement through legal channels.

3. Can rectifications be done online?

Yes, rectifications are done through the GST portal in subsequent return filings.

4. Is there a fee for rectifying GST returns?

There is no additional fee, but interest or penalties may apply if tax liabilities are affected.

5. Can I amend the GSTR-3B return directly?

No, there is no option for corrections in such a case; in that situation, corrections must be made in the next return.