GST UPDATE

Desk of CA. Praveen Sharma Series- 493 Correction Of Bonafide, Inadvertent Error In GST Returns Should Be Permitted

The recent ruling by the Bombay High Court sheds light on the imperative need to address bona fide, unintentional errors in GST returns, emphasizing the importance of acknowledgment and allowance for corrections by the tax authorities. The court emphasized that inaccuracies in GST filings could not only impact the taxpayer but also have far-reaching consequences for third parties involved.

In a case brought forth by a private company contesting the rejection of its request to amend FORM GSTR-1 for the fiscal year 2021-2022, the High Court, represented by a Division Bench headed by Justice G.S. Kulkarni and Justice Jitendra Jain, stressed the inadvertent and non-malicious nature of the errors made by taxpayers. Recognizing the predominantly electronic nature of the GST framework, the court acknowledged the challenges faced by taxpayers in navigating the complexities of the system.

The petitioner company, operating in the electronic components manufacturing sector, inadvertently submitted GST identification numbers (GSTIN) belonging to third parties instead of the correct entity while filing Form GSTR-1. Despite efforts to rectify the mistake, the GST portal did not permit modifications, resulting in adverse financial consequences for the company.

In its deliberation, the High Court emphasized the necessity of allowing rectification of inadvertent errors in GST returns, particularly in cases where there is no loss of revenue to the government. It criticized the State Tax Officer's rejection of the company's plea and advocated for a more taxpayer-friendly approach to minimize litigation and enhance revenue collection.

As a result, the High Court granted the petition and directed the tax department to facilitate the petitioner's amendment/rectification of the GST form, underscoring the importance of recognizing and rectifying bona fide errors in GST filings.

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CA. Praveen Sharma 

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