If you get a Notice from GST Department, don’t worry about how to reply to the Notice and prepare the reply in accordance with GST rules and regulations. because today I will share with you a Reply of Notice for the difference in Supply Value in GSTR 1 to GSTR 3B. You can also download GST Notice Reply Letter Format in Word by clicking on the download button.
Sometimes, we have made mistakes in filling up the Supply value in GSTR 1 and GSTR3B. hence, GST Department sends a notice due to the difference in Supply Value in GSTR 1 to GSTR 3B.
GST Notice Reply Letter Format
Here is the Draft GST Notice reply format in word for Reply of Notice for the difference in Supply Value in GSTR 1 to GSTR 3B.
The Assistant Commissioner (Details of the Officer)
Subject: – Reply of Notice for the difference in supply value in GSTR 1 to GSTR 3B
Ref: – a) Letter No. ___________dated ___________
- Kindly refer to your office letter No 1234567 dated 01-01-2001 wherein your good self has informed us that there is a difference in taxable turnover involved as reported in GSTR 3B Vis-à-Vis GSTR 1 in respect of edueasify ltd for the period of July 2017 to Feb 2020 and you have directed us to explain the reason for the difference.
- We are a registered person in the Goods and Service Tax Act 2017 (hereinafter referred to as “Act”) on dated with Registration Name ABC Ltd, registered Address Gujarat, PAN No ABCD with the name of Proprietor Mr. ABC with Registered Date 01/01/2017. We are doing business in Trading/Manufacturing/Service (details of the nature of the business required) Clerical Error Reason.
- We would like to submit that the difference in the GSTR 1 to GSTR 3B is due to clerical error reasons, due to an issue in the network, supply of Rs. 20000 mentioned in the R3 as 200000. This is a human natural mistake since GSTR 3B is not having any revision facility as of date, the difference arises in our case.
- Section 126 of the Act also mentioned that no penalty is imposed if there is a clerical error. Rectifiable mistake and gross negligence, our case is fall in this Section of the act, we have mentioned the value of supply 2 Lakh instead of 20K mentioned in the GSTR 1 which is actual, so we have paid tax on 20K only in the GSTR 3B as per the details mentioned in the GSTR 1, so penalty cannot be imposed on us as per the provision of the law. Extract of Section 126 is reproduced for your reference.
Section 126: General disciplines related to Penalty.
(1) No officer under this Act shall impose any penalty for minor breaches of tax regulations or procedural requirements and in particular, any omission or mistake in the documentation that is easily rectifiable and made without fraudulent intent or gross negligence.
Explanation.––For the purpose of this sub-section,
- (a) a breach shall be considered a minor breach if the amount of tax involved is less than five thousand rupees.
- (b) an omission or mistake in documentation shall be easily rectifiable if the same is an error apparent on the face of the record.
(2) The penalty imposed under this Act shall depend on the facts and circumstances of each case and shall be commensurate with the degree and severity of the breach.
(3) No penalty shall be imposed on any person without giving him an opportunity of being heard.
(4) The officer under this Act shall while imposing a penalty in an order for a breach of any law, regulation, or procedural requirement, specify the nature of the breach and the applicable law, regulation, or procedure under which the amount of penalty for the breach has been specified.
(5) When a person voluntarily discloses to an officer under this Act the circumstances of a breach of the tax law, regulation or procedural requirement prior to the discovery of the breach by the officer under this Act, the proper officer may consider this fact as a mitigating factor when quantifying a penalty for that person.
(6) The provisions of this section shall not apply in such cases where the penalty specified under this Act is either a fixed sum or expressed as a fixed percentage.
- It is also submitted that the Hon’ble court also held in the S129 cases allow the same view that penalty cannot be invoked in the case of mistake apparent from the record, reliance is placed on the Hon’ble Kerala High court decision in the case of Sabitha Riyaz Vs UOI WPC 34874/2018, whereas Hon’ble court whereas Registered Person (hereinafter Referred as RP) mentioned shown distance 280 Km instead of 2800 KM in the Eway bill, later detained of vehicle by the department on account of expiry of bill waybill, Court has allowed the writ petition of the RP in this case.
- Reliance is also placed on the decision of Hon’ble Kerala High court in the case of Diamond Metal v. State of U.P  100 taxmann.com 166 (Allahabad)-Dated 30th October 2018, Hon’ble Allahabad High court allow the release of the vehicle on account of typo mistake of the RP.
- Reliance is also placed on the decision of Rajawat Steels v. State of U.P.  98 taxmann.com 387 (Allahabad)-Dated 27th September 2018 8. It is further submitted that the Hon’ble Delhi high court allows and directed the department for the revision of the GSTR 3B in the case of Bharti Airtel Limited Vs Union of India & Ors. W.P. No. 6345/2018 which is still pending at the GSTN level. If this revision facility is provided to us, then this clerical error can be easily rectified.
- It is respectfully submitted based on Section 126 read with the above-mentioned decision of Hon’ble court, our case falls in the clerical mistake which can be easily rectifiable nature, so Notice for the mismatch of GSTR 1 Vis a Vis GSTR 3B should be dropped in our case. Missed to Report Sales in GSTR 3B from GSTR 1 10. It is respectfully submitted that our supply for the month of July 17 was Rs. 1.20 Lacs whereas by the mistake of documentation, we have mentioned the value of supply in the July 17 in GSTR 3B Rs. 1.10 Lacs, later same is rectified I the month of Nov 17 return when we identified this mistake. The reconciliation table of the month to month is submitted below for your reference.
- It is further submitted that we have made payment off the output tax on account of output liability by the Electronic Credit Ledger (hereinafter referred to as ITC Ledger) mainly, so interest liability as per Section 50(1) does not arise in our case as per the CBIC Notification No. 63/2020-Central Tax dated 25th August 2020, in pursuant of the 31 GST Council Meeting.
- further, it is also submitted that Central Government also proposed to change Section 50(1) in Union Budget 2021 dated 01-02-2021 with retrospective from July 17 for liability of the interest only on the net tax liability, extracted of Budget 2021 is reproduced below for your reference.
In section 50 of the Central Goods and Services Tax Act, in sub-section (1), for the proviso, the following proviso shall be substituted and shall be deemed to have been substituted with effect from the 1st day of July 2017, namely:–– “Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger.”.
- Based on the retrospective amended in the Law and submitted return for the notice period, it is submitted since we have made a payment during the month from the ITC Credit ledger only, so interest cannot be levied on us for the late payment of the tax in GSTR 3B from the GSTR 1 of the period.
- You can also refer to the GST annual return/audit (As the case may be) whereas this mistake of underreporting the sales is mentioned as well as reconciled as per the process prescribed in the Annual return/Audit by us. Mismatch in the case of Transporter due to Reverse Charge Tax on his output supply which attracts RCM at recipient:- 14. While filing GSTR 1, the output supplies, which attract GSTR under the reverse charge mechanism must show in Table 4B (supply attracting tax on a reverse charge basis) and there is a specific tab for “Supply attract reverse charge” which must be ticked, Further, in the summary screen of GSTR 1, the total value of service provided by us includes the taxable amount of goods transportation service and tax payable thereon (tax payable in this case is by the recipient of service) is also shown.
- There is no option for the supplier of service to show the value of services which are supplied by him to a recipient whereas tax is required to be paid by such recipient under reverse charge method, such option is only available in the case of inward suppliers only.
- As explained above, as the option of showing taxable value and tax payable amount on reverse charge transaction is available only in GSTR 1 and not in GSTR 3B, therefore we are unable to show details of reverse charge transaction in 3B, so there is no difference in the value of service in GSTR 1 and GSTR 3B, however, kindly note that there will be no additional GST liability in our hand due to non-availability of such option in the GSTR 3B Return.
- Month-wise detailed breakup of the return is submitted for your reference. M/s Edueasify Ltd.
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