Rectification of Errors Under GST Laws

Rectification of Errors is an important aspect of the Goods and Services Tax (GST) regime in India. GST is a comprehensive indirect tax that was introduced on July 1, 2017, replacing several indirect taxes such as Central Excise, Service Tax, and Value Added Tax (VAT). The introduction of GST has simplified the tax system, but it has also brought with it some complexities, especially when it comes to correcting errors. In this article, we will discuss the Rectification of Errors Under GST Laws and the procedure to correct such errors.

What is Rectification of Errors?

Rectification of Errors is an important aspect of GST compliance. It is important for taxpayers to ensure that their sales and goods tax returns are filed correctly and that any errors are corrected in a timely manner. Failure to do so may result in penalties and interest under GST laws. Taxpayers should also seek professional help if they are unsure about any aspect of GST compliance.

Scope of Rectification under GST

Under Section 161 of the Act, the authorities who have passed or issued any orders or decisions or notices or certificates or any other documents have power to correct errors which are apparent on record and which have been brought to the notice of the person within three months from the date of such order etc. or by any officer appointed under the Act. Thus, any competent authority, including judicial authorities, appellate authorities, review authorities, etc., can correct errors. It is important to note that the scope of the repair is not limited to orders. However, decisions, certificates, notices and any documents issued under the Act shall also be within the scope and scope of correction, subject to an error apparent from the record in such decision or certificate or notice or other documents. Under the existing law, only orders made and issued under the Act could be rectified. Now the scope of the remedy has expanded. This is a significant change under the GST Act. Both parties have the right to request the initiation of rectification proceedings after meeting the basic condition of the presence of an error apparent on the face of the record in such order, etc.

Types of Errors under GST laws

There are mainly two types of errors under GST laws:

• Clerical Errors: These Errors occur due to an error in entering data in the GST return. For example, a typographical error or an error when entering a decimal point
• Other Errors: These Errors occur due to misinterpretation of GST laws or due to oversights while filing GST returns. For example, claiming the wrong input tax credit or filing returns with incorrect tax rates

Procedure of Rectification of Errors under GST laws

Rectification of Errors under GST laws can be done in two ways:

• Through GST Portal: To rectify any error in GST Portal, the taxpayer has to login to GST Portal and go to the Returns’ section. The taxpayer must then select the “Change tax return” option and make the necessary changes. The GST portal allows correction of errors in GST returns up to 2 years from the date of filing of the original return.

• Through a refund application: If the Error is related to an overpayment of tax or the application of an excessive input tax credit, the taxpayer can correct the error by submitting a tax refund request. A refund claim can be made on the GST portal by selecting the ‘Refund’ option and filling in the required details.

However, it is important to note that error correction is not allowed in all cases. Some errors, such as misreporting a domestic transaction as an interstate transaction or misreporting a tax-exempt transaction when it is taxable, cannot be corrected.

Procedure of Rectification of Errors through GST portal

The process is as follows:

• Dash Board > Services
• Services > User Services
• User Services > My application
• My application > Rectification application
• In the Rectification Application one will find the repair order and there is a place to justify the Request using a maximum of 1000 words and you can also attach files in PDF and/or JPEG format.
• One can attach a maximum of 4 files in PDF and/or JPEG format, each file can have a maximum of 5 MB of data.

Which type of Errors can be Rectified under GST? 

Errors that are visible from the front of the records can only be corrected. The heading of the section is clear, and according to it and the words written in the rubric, only errors that are visible on the front of the entries can be corrected.

The Error may be factual, legal, or administrative, but it should be apparent from the record. Reliance is to be placed on the records available on record, and no new documents or evidence that were not on record shall be produced by the seller to substantiate the claim for rectification of order, etc.

Let us make a few observations about the errors apparent on the face of the records to better understand the subject:

• An Error apparent from the face of the record cannot be an error to be hunted out and sought.
• An Error that is not self-evident and must be discovered by a process of reasoning can hardly be said to be an error apparent on the surface of the record.
• An Error or mistake that does not require a thorough discussion of the evidence or arguments to prove it can be said to be an error apparent from the record.
• An Error that must be ascertained by a lengthy process of reasoning on points where two possibilities may exist can hardly be an error apparent from the record.

Time limit to file application of Rectification under GST

Taxable persons and officers appointed under the act may request to the authority the initiation of a rectification proceeding. A taxable person is required to file an application for rectification within three months from the date of the issue of such an order, decision, notice, or certificate. However, no such time limit has been prescribed to officers for sending reports to the concerned authority for the initiation of a rectification proceeding on the ground of an apparent error on the face of the record. Similarly, no such time limit is also applicable to the authority for the initiation of proceedings on his own motion. Therefore, if an error is apparent on the face of the record and the person desires to rectify it, then it is necessary to file an application within three months from the date of issue of such an order, etc. This time limit cannot be extended or delayed on any grounds.

Penalties for non-rectification of errors

If the taxpayer fails to rectify any errors in the GST return, he may face penalties under the GST laws. The penalty for non-rectification of errors can be up to 10% of the tax amount or Rs 10,000, whichever is higher. In addition to the penalty, the taxpayer can also pay interest on the amount of tax owed.

Conclusion

The scope of corrections under this section has been extended to include rulings, notifications, certificates, and other documents issued under the GST Act. Rectification of error under s. 161 of the Act is, in addition to appeal under s. 107 of the Act, an alternative remedy available to the aggrieved taxable person for rectification of an order, decision, etc. Generally, in respect of errors that are otherwise apparent in the record contained in the order, the aggrieved person may file an appeal against said order and assert all grounds for appeal. However, if errors in the order are apparent from the record, the aggrieved person may seek rectification if he so desires. If the application is rejected on the grounds that there is no apparent error in the record or if he is not satisfied with the corrective order of the office, the order can be appealed to the appellate authorities. This is therefore another alternative remedy for the injured party. Similarly, it is an additional remedy, apart from review and appeal, available to the authorities to correct the error and correct the order.