GSTR-1 Amendment Functionality Enable Now: Everything Need To Know

In a major relief and welcome move for GST taxpayers across India, the government has now enabled the much-awaited option to amend GSTR-1 returns on the GST portal. This new functionality will make life significantly easier for businesses, allowing them to correct errors and omissions in their sales returns without hassle. Let’s dive into the details of this game-changing update and understand its implications.

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What is GSTR-1 and Why is Amendment Important?

GSTR-1 is a monthly or quarterly return that needs to be filed by all regular GST taxpayers to declare their outward supplies (sales). It contains details of all taxable supplies, exempt supplies, exports, and advances received during the tax period. Accurate filing of GSTR-1 is crucial as it forms the basis for your customers to claim input tax credit (ITC).

However, mistakes can happen, and taxpayers often discover errors or omissions in their GSTR-1 returns after filing. These could be due to incorrect invoice details, missing invoices, wrong GST rates applied, etc. Until now, there was no direct way to amend these errors in the same filing period. Corrections could only be made in the returns of subsequent periods, leading to mismatches and ITC loss for recipients.

CBIC Notifies GSTR-1 Amendment Functionality.

Acknowledging the long-standing demand of taxpayers, the Central Board of Indirect Taxes and Customs (CBIC) has notified the amendment functionality for GSTR-1 through Notification No. 1/2024 dated 10th April 2024. This notification inserts a new sub-rule 1A in Rule 59 of the CGST Rules 2017, enabling the filing of amendments to GSTR-1 for a particular tax period.

The key highlights of the notification are:

• Taxpayers can now amend details of outward supplies furnished in GSTR-1 for a specific tax period
• Amendments can be made before filing the return in GSTR-3B for the said period
• The amended details will be auto-populated in the GSTR-3B, ensuring correct tax liability is discharged
• Amendments can be made multiple times for a tax period until the GSTR-3B filing due date

This means that taxpayers now have the flexibility to revise their GSTR-1 any number of times before the GSTR-3B of the same period is filed. The revised details will reflect in GSTR-3B, avoiding any mismatch and ensuring ITC can be claimed seamlessly by recipients.

Latest Updates for GSTR-1 Amendments in 2024.

The GST Council, in its 53rd meeting held on June 23, 2024, recommended several changes and updates related to GSTR-1 filing and amendments. Here are the key takeaways:

1. Introduction of GSTR-1A for Amending Details.

A new optional facility called GSTR-1A will be introduced for taxpayers to add or amend details in their GSTR-1 for a tax period before filing GSTR-3B. This will allow taxpayers to:

• Add any missed out invoices or details for the current tax period
• Amend any particulars already declared in GSTR-1, including those reported in Invoice Furnishing Facility (IFF) by quarterly filers

GSTR-1A will have to be filed before GSTR-3B of the said tax period to ensure the correct liability is auto-populated. This is a welcome move as it provides taxpayers an opportunity to rectify errors and omissions before payment of taxes, reducing the need for amendments later on.

2. New Tables 14A and 15A for Amending E-Commerce Supplies.

Two new amendment tables, 14A and 15A, have been introduced in GSTR-1 from February 2024 onwards to capture amendments to supplies made through e-commerce operators (ECOs):

• Table 14A: For suppliers to amend details of supplies made through ECOs reported earlier in Table 14
• Table 15A: For ECOs to amend details of supplies reported earlier in Table 15 under various categories like B2B, B2C, etc.

This will simplify the amendment process for e-commerce transactions and improve reconciliation between suppliers and ECOs.

3. Auto-Population of Amended Values in GSTR-3B.

The amended taxable values and tax liabilities from Tables 14A and 15A will be auto-populated to the relevant fields in GSTR-3B:

• Amended taxable values from Table 14A(b) to Table 3.1.1(ii) of GSTR-3B
• Amended taxable values and liabilities from all sections of Table 15A to Table 3.1.1(i) of GSTR-3B

This automation will reduce data entry errors and make GSTR-3B filing easier for taxpayers.

4. Exemption from Annual Return Filing for Small Taxpayers.

Taxpayers with an aggregate annual turnover of up to Rs. 2 crores are exempt from filing annual returns GSTR-9/9A for FY 2023-24. This will ease the compliance burden for small businesses.

5. Time Limit for Amendments in GSTR-1.

Amendments can be made in later tax periods, but the revised invoice date must not be later than the last date of the tax period of the original invoice. For instance, if an invoice dated 12/07/2023 is being amended in August 2023, the amended invoice date cannot be after 31/07/2023.

How to Amend GSTR-1 on the GST Portal?

The process to amend GSTR-1 is quite simple and intuitive. Here’s a step-by-step guide:

1. Log in to the GST portal with your credentials
2. Go to Services > Returns > GSTR-1 > Prepare Online
3. Select the Financial Year and Month for which amendment is required
4. Click on the ‘Amendment’ tab on the top
5. You will see all the sections of GSTR-1 (B2B, B2C Large, Exports, etc.) with an option to ‘Add/Edit’
6. Click on ‘Add/Edit’ in the relevant section where amendment is needed
7. Make the necessary changes such as editing invoice details, adding missing invoices, etc.
8. Click on ‘Save’ to update the changes
9. Repeat steps 6-8 for other sections of GSTR-1 if required
10. Finally, click on ‘Submit’ to file the amended GSTR-1

Some key points to remember:

• Amendments can be made for the current tax period as well as previous tax periods.
• There is no limit to the number of times you can amend GSTR-1 for a period.
• The original place of supply and document type cannot be amended. However, the place of supply can be amended with some restrictions.
• Invoices of the amended tax period must be reported with the original document date, not the current date.
• Amendments will be auto-populated to GSTR-2A/2B of the recipients for accepting or rejecting credit.

Common Errors in GSTR-1 Amendments and How to Avoid Them.

Making mistakes while filing GSTR-1 or amending it is not uncommon. Here are some of the most frequent errors taxpayers make and tips to avoid them:

1. Invalid Original Document Date.

Ensure that you enter the correct original document date while amending invoices. The revised document date cannot be later than the last date of the original tax period.

2. Amending Non-Editable Fields.

Some fields like the original place of supply and document type cannot be amended directly. Make sure you are amending the right fields.

3. Incorrect Summary Values.

When amending invoice-level details, also update the corresponding summary values correctly to avoid mismatch errors.

4. Missing Amendments for Linked Fields.

If you amend one detail, make sure to also amend all other linked details. For example, if you change the taxable value, also update the tax amounts.

5. Amending Already Amended Invoices.

If you have already amended an invoice once, any further changes should be made as fresh amendments and not on the previously amended values.

To minimize errors, always double-check the details before submitting and use the preview feature to verify the changes. Maintain proper records and documentation of original and amended invoices.

Impact of Amendments on Recipients.

As a recipient, any amendments made by your suppliers in their GSTR-1 will reflect in your GSTR-2A/2B. Here’s what you need to do:

• Regularly reconcile your GSTR-2A/2B with your purchase register to identify any amendments.
• Accept or reject the amended credit based on the supporting documents received from the supplier.
• Make sure to claim the correct input tax credit in your GSTR-3B.
• Communicate with your suppliers in case of any discrepancies or missing amendments.

A new table called “ECO – Documents (Amendment)” has been added in GSTR-2B from February 2024 onwards for recipients to view amended details of supplies received through ECOs. This will further facilitate reconciliation.

Consequences of Not Making Amendments.

Not amending your GSTR-1 to correct errors or omissions can lead to various consequences, such as:

• Mismatch between GSTR-1 and GSTR-3B leading to notices and audits
• Excess or short payment of output tax liability
• Denial of input tax credit to recipients
• Interest and late fees for non-payment or short payment of taxes
• Penalties for non-compliance with GST laws

Therefore, it’s crucial to identify and rectify any mistakes in your GSTR-1 promptly through amendments. Regularly reconcile your returns with your books of accounts and use the GSTR-1A facility to minimize the need for amendments.

Once the amended GSTR-1 is filed, the revised details will be auto-populated in the GSTR-3B of the same period. Taxpayers must ensure to discharge any additional tax liability arising due to the amendments.

What Errors Can be Amended in GSTR-1?

The amendment window in GSTR-1 allows taxpayers to rectify almost all types of errors and omissions. Some common scenarios where amendment can be used are:

• Incorrect invoice number, date, or value reported
• Wrong GSTIN of recipient mentioned
• Taxable value and GST amount reported incorrectly
• Invoice omitted to be reported
• Wrong HSN code or tax rate selected
• Supplies reported in wrong section (e.g. B2B reported as B2C)
• Typos and other clerical mistakes

However, it’s important to note that amendment in GSTR-1 is only possible before filing GSTR-3B of that period. Once GSTR-3B is filed, any further corrections can only be made in subsequent period returns.

Benefits of GSTR-1 Amendment Facility.

The introduction of the GSTR-1 amendment facility is a significant step towards simplifying GST compliance and reducing the burden on taxpayers. Let’s look at some key benefits:

1. Timely correction of errors: Taxpayers can now rectify mistakes in GSTR-1 immediately, without waiting for the next tax period. This helps in maintaining accurate books of accounts and avoiding cascading effect of errors.
2. Avoiding ITC loss for recipients: When suppliers amend their GSTR-1 before the recipient files GSTR-3B, it ensures that the correct ITC is available to the recipient. This prevents ITC loss and unnecessary reconciliations.
3. Reducing compliance burden: Earlier, taxpayers had to keep track of errors and make corrections in subsequent periods, leading to confusion and additional workload. With the amendment facility, errors can be fixed then and there, reducing compliance burden.
4. Minimizing chances of scrutiny: Mismatches and discrepancies in GST returns often trigger scrutiny from the department. By allowing taxpayers to amend GSTR-1 and reconcile with GSTR-3B, the chances of scrutiny and audits are minimized.
5. Enhancing ease of doing business: The amendment facility is a taxpayer-friendly measure that enhances the ease of doing business. It shows the government’s commitment to simplifying GST and reducing compliance hassles for businesses.

Challenges and Considerations.

While the introduction of the GSTR-1 amendment option is undoubtedly a positive development, it’s important to consider potential challenges and best practices:

1. Time Management: Businesses should be mindful of the time limits for making amendments. It’s crucial to review and correct GSTR-1 filings regularly rather than waiting until the last moment.
2. Proper Documentation: Maintaining proper documentation for all amendments is essential. This will be helpful in case of any future audits or inquiries.
3. Training and Awareness: Companies need to ensure that their accounting and tax teams are well-trained in using this new feature effectively.
4. System Updates: Businesses using GST software or ERP systems should ensure that their systems are updated to accommodate this new functionality.
5. Reconciliation Practices: While the amendment feature makes corrections easier, it’s still important to maintain robust reconciliation practices to minimize errors in the first place.

Future Implications and Expectations.

The introduction of the GSTR-1 amendment option is likely to have several long-term implications for the GST ecosystem:

1. Evolving Compliance Landscape: This move may pave the way for further simplifications in GST compliance procedures. We might see similar flexibility introduced in other GST forms in the future.
2. Improved GST Collections: With more accurate reporting and easier compliance, the government may see an improvement in overall GST collections.
3. Advanced Analytics: The ability to amend returns could lead to more sophisticated data analytics capabilities, helping both businesses and the government in decision-making.
4. International Best Practices: This aligns India’s GST system more closely with international best practices, potentially making it easier for foreign businesses to operate in India.
5. Focus on Voluntary Compliance: The amendment feature emphasizes the government’s focus on encouraging voluntary compliance rather than punitive measures.

Compliance Perspective: Expert Opinions.

The introduction of GSTR-1A has been welcomed by tax experts and industry professionals. Here are some insights from experts on the impact of this change.

Rajat Bose, Partner at Shardul Amarchand Mangaldas & Co, stated that this is a positive change from a compliance perspective and will facilitate ease of doing business. He emphasized that the ability to amend GSTR-1 before the payment of taxes will help businesses rectify clerical and inadvertent errors, reducing the chances of receiving unwarranted notices for reconciliation of disclosures in GSTR-1 and GSTR-3B.

Abhishek Jain, Indirect Tax Head & Partner at KPMG, highlighted that allowing revision of filings made in GSTR-1 is a good move to rectify errors before the payment of taxes. He added that it will be interesting to see the mechanism for the population of GSTR-2B for the recipient and the time gap available to the recipient for reconciling credits.

Maulik Manakiwala, Indirect Tax Partner at BDO India, noted that the introduction of GSTR-1A indicates the government’s intention to simplify GST law and ease compliances for the assessee through proactive consultation with the industry.

Wrapping Up.

The option to amend GSTR-1 is a welcome move by the government and a long-awaited relief for GST taxpayers. It simplifies the return filing process, reduces compliance burden, and ensures seamless ITC flow. Taxpayers must make use of this facility diligently to keep their GST records accurate and up-to-date.

As with any new functionality, it’s advisable to carefully review the amended details before submitting and seek expert guidance in case of any doubts. With the right approach and due diligence, the GSTR-1 amendment facility can be a game-changer in making GST compliance easier and more efficient for businesses across India.

With this Article guide by your side, you’re now well-equipped to handle GSTR-1 amendments like a pro in 2024 and beyond. Happy filing!

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute professional tax advice. While we strive to ensure the accuracy and completeness of the information, we make no guarantees regarding its applicability to your specific situation. Always consult with a qualified tax professional before making any decisions based on the content of this article

C.K. Gupta

Hello, I am C.K. Gupta Founder of Taxgst.in, a seasoned finance professional with a Master of Commerce degree and over 20 years of experience in accounting and finance. My extensive career has been dedicated to mastering the intricacies of financial management, tax consultancy, and strategic planning. Throughout my professional journey, I have honed my skills in financial analysis, tax planning, and compliance, ensuring that all practices adhere to the latest financial regulations. My expertise also extends to auditing, where I focus on maintaining accuracy and integrity in financial reporting. I am passionate about using my knowledge to provide insightful and reliable financial advice, helping businesses optimize their financial strategies and achieve their economic goals. At Taxgst.in, I aim to share valuable insights that assist our readers in navigating the complex world of taxes and finance with ease.