Details of Filing GST Returns Online, Penalties and Appeals - All You Need to Know

Goods and service tax GST has brought in “One nation one tax “to unite indirect taxes under one umbrella and facilitate Indian businesses to be globally competitive. The Indian GST is structured for efficient tax collection, reduction in corruption, easy inter-state movement of goods etc.

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Here are the details of how to file GST Returns Online, Offences under GST, Penalties underGST and Appeals - All You Need to Know

How To File GST Returns Online? 

Please follow these steps to file GSTR-3B on GSTN portal. This guide has been released by Government on GSTN portal.
  • After login to GSTN portal, select Return Dashboard 
  • Select Financial Year 2017-18 and Month July. Click Search and Select GSTR-3B 
  • Declare your liabilities and ITC claims in Section 3.1 and 4 respectively by clicking on the tiles and furnishing the required information. Transitional ITC cannot be claimed in GSTR 3B. It can be claimed only through TRANS 1 and TRANS 2. 
  • Enter details of interest, if payable, in Section 5.1. Late fee will be computed by the system 
  • Click on Save GSTR-3B After you save the data, Submit button will get enabled. Please note that after submit, no modification is possible. Hence ensure that details are filled correctly before clicking on Submit button. 
  • On clicking Submit GSTR-3B button, System will post (debit) the self-assessed liabilities including system generated late fee in Liability Register and credit the claimed ITC into ITC ledger. 
  • After this the Payment of Tax tile will be enabled, please click it and declare your payment details to pay the taxes and offset the liability. 
  • Click CHECK BALANCE button to view the balance available for credit under Integrated Tax, Central Tax, State Tax and Cess. (This includes transitional credit also, if TRAN-1 and 2 are submitted). This will enable you to check the balance before making the payment for the respective minor heads. The balance is also displayed when the mouse is hovered on the applicable data entry field in payment section. 
  • Please fill out the section that specifies how you wants to set-off your liabilities using a combination of Cash and ITC. 
  • System checks if you have sufficient Cash/ITC balance. 
  • It also checks if the Reverse charge liabilities are set-off only through CASH. 
  • System also checks if all liabilities are set-off. Part payment is not allowed in GSTR-3B. Hence, ensure sufficient balance in Cash and ITC Ledger to Offset liability 
  • In case of ITC utilisations, the system checks the prioritization rules viz. IGST Credit has to be first utilised for paying IGST liability and remaining for CGST liability and thereafter SGST liability; SGST credit has to be first used for paying SGST liability and then IGST liability; CGST Credit has to be first used for CGST liability and the remaining for IGST Liability; SGST credit cannot be used for paying CGST liability and CGST credit cannot be used for paying SGST liability 
  • Transition ITC, if available in ITC ledger, can be used for payment of liabilities of GSTR 3B 
  • Click the OFFSET LIABILITY button to pay off the liabilities 
  • Click on declaration statement 
  • Select Authorized Signatory filing the Form 
  • Click on File GSTR-3B button with DSC or EVC 
Message for successful filing will appear and Acknowledgement will get generated

Offences under GST
To prevent tax evasion and corruption, the GST Law lists the offences and penalties. There are 21 offences under GST, apart from the penalty for availing compounding by a taxable person who is not eligible for it.
  • Offences under GST offences and penalties under GST
  • When has anyone committed an offence under GST?
There are 21 offences under GST. For easy understanding, we have grouped them as-

Fake/wrong invoices
  • A taxable person supplies any goods/services without any invoice or issues a false invoice.
  • He issues any invoice or bill without supply of goods/services in violation of the provisions of GST
  • He issues invoices using the identification number of another bonafide taxable person
Fraud
  • He submits false information while registering under GST
  • He submits fake financial records/documents or files fake returns to evade tax
  • Does not provide information/gives false information during proceedings

Tax evasion

  • He collects any GST but does not submit it to the government within 3 months
  • Even if he collects any GST in contravention of provisions, he still has to deposit it to the government within 3 months. Failure to do so will be an offence under GST.
  • He obtains refund of any CGST/SGST by fraud.
  • He takes and/or utilizes input tax credit without actual receipt of goods and/or services
  • He deliberately suppresses his sales to evade tax

Supply/transport of goods

  • He transports goods without proper documents
  • Supplies/transports goods which he knows will be confiscated
  • Destroys/tampers goods which have been seized
Others
  • He has not registered under GST although he is required to by law
  • He does not deduct TDS or deducts less amount where applicable.
  • He does not collect TCS or collects less amount where applicable.
  • Being an Input Service Distributor, he takes or distributes input tax credit in violation of the rules
  • He obstructs the proper officer during his duty (for example, he hinders the officer during the audit by tax authorities)
  • He does not maintain all the books that he required to maintain by law
  • He destroys any evidence
  • He has opted for composition scheme even though he is not eligible
Offences under GST by Companies, LLPs, HUFs and others

For any offence committed by a company, both the officer in charge (such as director, manager, secretarty) as well as the company will be held liable.

For LLPs, HUFs, trust, the partner/karta/managing trustee will be held liable.

Penalties under GST

For fraud
An offender has to pay a penalty amount of tax evaded/short deducted etc., i.e., 100% penalty, subject to a minimum of Rs. 10,000.
  • Not only the taxable person but any person who-
  • Helps any person to commit fraud under GST
  • Acquires/receives any goods/services with full knowledge that it is in violation of GST rules
  • Fails to appear before the tax authority on receiving a summons
  • Fails to issue an invoice according to GST rules
  • Fails to account/vouch any invoice appearing in the books
-Will have to pay a penalty extending upto Rs. 25,000

For cases of fraud, additional penalties as follows-
  • Tax amount involved         100-200 lakhs   200-500 lakhs     Above 500 lakhs
  • Jail term                                            Upto 1 year         Upto 3 years       Upto 5 year
  • Fine                                                                          In all three cases
For more details please read our article on prosecution on  https://www.gst.gov.in

For other cases (no intention of fraud or tax evasion)

An offender not paying tax or making short-payments has to pay a penalty of 10% of the tax amount due subject to a minimum of Rs.10,000.

[Note: In the earlier model law, the person was penalized if he made short payments “repeatedly”, i.e., in 3 returns out of 6 consecutive tax periods. This has been removed from the revised model law. So it stands, even first-time offenders may be liable to penalty.]

Therefore, the penalty will be high at 100% of the tax amount when the offender has evaded i.e., where there is a deliberate fraud.
For other genuine errors, the penalty is 10% of tax.

General Penalty

Any offense under GST for which penalty is not specifically mentioned will be liable to a penalty extending Rs. 25,000.

General rules regarding penalty

These rules of penalty are generally the same in all laws whether tax laws or contract or any other law.
  • Every taxable person, on whom the penalty is imposed, will be served with a show cause notice first and will have a reasonable opportunity of being heard.
  • The tax authority will give an explanation regarding the reason for penalty and the nature of offense When any person who voluntarily discloses a breach of law, the tax authority may use this fact to reduce the penalty
  • There will not be substantial penalties for minor breaches (tax amount is less than Rs.5000) or errors which are easily rectifiable and clearly made without any motive of fraud. The tax authority may issue a warning in such cases.
  • This will be beneficial to businesses, especially SMEs, who may make genuine mistakes especially in the first few months of GST implementation. Being penalized for genuine errors will be a hard blow to the SMEs who do not have as many resources as the larger organizations to adapt to GST.
  • Persons supplying/receiving goods in contravention of GST law will have such goods confiscated. 

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