Debate on taxes - A mistake will be very costly

- Sales Tax-Soham Masruwala

Under the GST Act, a specific provision is made regarding forms and tax credits. Earlier, when VAT and Central Sales Tax laws were in place, there was a clear provision that central sales tax credits were not available.

Central Sales Tax is replaced by the IGST Act in the existing GST Act and tax levied under that Act is taxable under IGST. Many times such a situation arises. A very big problem arises in such a situation where the trader has mistakenly claimed CGST and SGST instead of taking IGST tax credit and the account is issued a demand notice. This matter is discussed in today's article.

Situation before rule 36 (4).

Under Rule 36 (4) before 1.1.2022, an opportunity to rectify the claim is available if CGST-SGST has been taken instead of claiming tax credit of IGST for the period which could have been taken apart from the tax credit appearing as per GSTR2B before 1.1.2022.

GSTR2A is an information form and it has very little legal authority and hence prior to 1-10-2022 Section 37 (2) of the CGST Act was in force according to which if there is any deficiency in filling up the form of an external supply which the recipient has under Section 38 (2) According to him, if such mistake can be corrected by the supplier, the government could never give such a structure to the merchant Alam to fill the form.

As only GSTR1 and GSTR3B forms were falsified there was no facility to report or report such false tax returns. In our humble opinion, if tax credit of CGST-SGST instead of IGST or IGST instead of CGST-SGST has been claimed for the period prior to 1.1.2022, the recipient is entitled to rectify the error even after the lapse of time.

Because it was not possible to fill the forms to catch the mistake and not punish the trader by half implementing the law. In this regard, it is imperative that the government takes a liberal attitude and makes a special provision for correcting the error so that every trader does not have to appeal repeatedly before the High Court and double taxation does not occur.

Situation after 1.1.2022

Rule 36(4) has now been given enormous legal supremacy as GSTR 2B has been framed and it has been fired under Section 16(2) that tax credit is payable only if the amount appears in GSTR3B. If tax has been claimed under the GST head, no opportunity to correct the error is available.