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Mismatch in GSTRs Assessee will be Liable for Penalty Us 125

PENALTY ON NON-DISCLOSURE/UNDER DISCLOSURE OF INTERSTATE SUPPLY TO UNREGISTERED DEALERS IN GST RETURNS

As per CBIC circular 89/08/2019-GST dated 18-02-2019, Penalty will be levied if there is mismatch in the details of the Inter-state supply to unregistered person, in GSTR 3B (Table 3.2) and GSTR 1 (Table 7).

Analysis:

  1. If there is inter-state unregistered supply made and value upto Rs. 2.5Lakhs, then details should be shown in GSTR 1 Table 7.
  2. However the details should also be disclosed in the GSTR 3B Table 3.2. But, number of the tax payers are not reporting in GSTR 3B.
  3. After observing that the majority of tax payers are not reporting details in Table 3.2 of GSTR-3B, the circular has been issued  to clarify that the tax payers has to fill the details of supplies to unregistered dealers mandatorily in table 3.2 of GSTR-3B and also in table 7 of GSTR-1.
  4. It is mentioned that such disclosure is essential for distributing the funds to respective states.

Penalty:

If there is mismatch then registered person will get penalized under section 125 of CGST Act

Section 125 of CGST Act:

Any person, who contravenes any of the provisions of this Act or any rules made there under for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to twenty-five thousand rupees.