From Jan 2022, GST Officers Can Directly Initiate Recovery For Mismatch Sales In GSTR-1 And GSTR 3-B

New Delhi: With the start of New Year January 2022, the Goods and Services Tax (GST) officers can surprise errant businesses by initiating direct recovery action against them for showing higher sales in monthly return GSTR-1 but not reporting the same while tax payment in GSTR-3B.

The move is expected to curb the menace of fake billing whereby sellers would show higher sales in GSTR-1 to enable purchasers to claim Input Tax Credit (ITC) but they didn't show the figure in GSTR-3B to lower GST liability.

Till the time, as per the GST law, first show cause notices were issued and then recovery process was initiated in such cases of mismatch in GSTR-1 and GSTR-3B.

Notably, the government had introduced this change as part of the Finance Act, passed by the parliament earlier this year. However, the Central Board of Indirect Taxes and Customs (CBIC) has notified January 1, 2022, as the effective date.

Through the said act, the government has inserted an explanation in sub-Section(12) of Section 75 of CGST Act, to clarify "self-assessed tax" shall include the tax payable in respect of outward supplies furnished in GSTR 1 but not included in the return furnished in GSTR-3B.

Section 75 of GST Act states where there is any self-assessed tax, then it can be recovered without issuing show cause notice and the recovery proceedings under Section 79 can be directly invoked.

Now, with this change, it is mandatory that both GSTR-3B and GSTR-1 should match with each other.

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