GST Advisory No. 614 Dated. 14.11.23 on Introduction of New Online Functionality for Reporting of ITC Mismatch Between GSTR-2B and GSTR-3B (Form GST DRC-01C Introduced)
GST Advisory 614: In a recent groundbreaking update, the Goods and Service Tax Network (GSTN) has informed about introduction of an innovative solution to boost online compliance in handling Input Tax Credit (ITC) mismatches between GSTR-2B and GSTR-3B. Through Advisory 614, released on the 14th of November 2023, the GSTN has declared about this new feature on the GST portal.
This feature empowers taxpayers to clarify any discrepancies between the ITC available in GSTR-2B and the ITC claimed in GSTR-3B, all within the online sphere. This development aims to streamline the process and enhance transparency for taxpayers navigating ITC-related challenges on the GST portal while dealing with ITC mismatches.
Key Highlights
The new functionality centers around the generation of automated intimation in the form of GST DRC-01C. This facilitates taxpayers in providing explanations for variations in Input Tax Credit, aligning with the directives of the GST Council. The functionality is now live on the GST portal, marking a significant stride in fostering a seamless and transparent tax compliance ecosystem.
Functionality Overview
The primary objective of this feature is to scrutinize the ITC declared in GSTR-3B/3BQ against the ITC available in GSTR-2B/2BQ for each return period. Should the claimed ITC in GSTR-3B surpass the available ITC in GSTR-2B by a predefined limit or if the percentage difference exceeds a configurable threshold, the taxpayer will promptly receive an intimation in the form of DRC-01C.
Actionable Steps for Taxpayers
Upon receiving the intimation, the taxpayer is required to file a response using Form DRC-01C Part B. The response can take various forms:
Payment Details Submission (Form DRC-03)
Taxpayers have the option to furnish details of payments made to settle the identified difference using Form DRC-03.
Explanation Submission
Taxpayers can provide a comprehensive explanation for the observed variance, ensuring clarity in the reconciliation process.
Combination Option
Taxpayers also have the flexibility to opt for a combination of both options, tailoring their response to the specific circumstances.
Consequences of Non-Compliance
It is crucial for impacted taxpayers to note that failing to file a response in Form DRC-01C Part B within the stipulated timeframe will have repercussions. Non-compliant taxpayers will be barred from filing subsequent period GSTR-1/IFF, emphasizing the importance of timely and accurate responses.
Conclusion
The introduction of this online functionality signifies a progressive step towards enhancing the efficiency and transparency of GST compliance. By automating the identification and resolution of ITC mismatches, the GSTN aims to provide taxpayers with a streamlined and user-friendly experience. It is imperative for taxpayers to familiarize themselves with this new functionality and respond promptly to any intimation received, ensuring uninterrupted compliance with GST regulations.
To Read the Advisory-614 in GST Portal CLICK HERE
To Read the GST Advisory-613 on ITC Reversal Under Rule-37A CLICK HERE
Read More