Finance Ministry Introduces GSTR-1A for Enhanced GST Compliance

The finance ministry has introduced the GSTR-1A form, which allows taxpayers to amend their outward supply return forms. This form must be filed before the GSTR-3B return. The move aims to reduce manual errors, minimize penalties, and streamline the GST compliance process, benefiting businesses and taxpayers alike.

The finance ministry has officially notified the launch of the GSTR-1A form, providing taxpayers with an option to amend their outward supply or sales return forms.

Last month, the GST Council recommended the introduction of this optional facility through GSTR-1A to allow amendments and declarations of additional details in form GSTR-1 for a specific tax period.

However, the GSTR-1A form must be filed before the GSTR-3B return for the corresponding tax period.

On July 10, the finance ministry notified the implementation of the GSTR-1A form.

Rajat Mohan, Executive Director at Moore Singhi, remarked that the Central Board of Indirect Taxes and Customs (CBIC) has significantly enhanced the GST compliance framework with the introduction of GSTR-1A.

'By facilitating timely corrections, form GSTR-1A ensures that the correct tax liability is auto-populated in form GSTR-3B, reducing manual errors and fostering a streamlined compliance process,' he said.

This change not only minimizes the risk of penalties and interest due to incorrect filings but also significantly reduces the compliance burden, showcasing CBIC's commitment to a more responsive and taxpayer-friendly GST regime, according to Mohan.

Abhishek Jain, Head & Partner of Indirect Tax at KPMG, noted that the new provisions allowing rectifications in GSTR-1 are a welcome move and should help avoid unnecessary disputes during the routine reconciliation between GSTR-1 and GSTR-3B, specifically regarding inadvertent errors for businesses.

'Also, the prescribed method shouldn't significantly impact the input tax credit reconciliation process for businesses,' Jain added.

This development will enable taxpayers to add or amend any supply particulars of the current tax period that were missed in GSTR-1 reporting, including those in the Invoice Furnishing Facility (IFF) for quarterly taxpayers, to ensure correct liability is auto-populated in GSTR-3B.

Currently, GST taxpayers file their outward supply return GSTR-1 by the 11th day of the next month, while GSTR-3B is filed staggeredly between the 20th and 24th day of the following month.

Taxpayers with an annual turnover of up to Rs 5 crore can file GSTR-1 quarterly by the 13th day of the end of the quarter, and GSTR-3B between the 22nd and 24th day of the succeeding month.

(With inputs from agencies.)