24 January 2024

Correction in GSTR-1 return even after prescribed time period is permissible, when there is no loss of revenue

The Bombay High Court has held that a bonafide, inadvertent error in furnishing details in a GST return needs to be recognized and permitted to be corrected by the department, when in such cases the department is aware that there is no loss of revenue to the Government.

The assessee in Star Engineers (I) Pvt. Ltd. v. Union of India had sought in September 2023 correction in the Form GSTR-1 filed for the months of July 2021, November 2021 and January 2022, on account of human error committed inadvertently, as GSTINs of ‘Ship to’ parties were reported in the GSTR-1 instead of that of ‘Bill to’ party. The ‘Bill to’ was thus unable to take ITC.

Allowing the writ, the Court observed that provisions of Section 37(3) read with Section 38 and sub-sections (9) and (10) of Section 39 need to be purposively interpreted.

The Court was hence of the opinion that the proviso ought not to defeat the intention of the legislature as borne out on a bare reading of Section 37(3) and Section 39(9) in the category of cases when there is a bona fide and inadvertent error in filing of returns, when there is no loss of revenue.

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