Finance Ministry to Release Draft GST Return Forms for Public Consultation on November 1

The Finance Ministry will release a draft of revamped Goods and Services Tax (GST) return forms for public consultation on November 1, according to a senior Central Board of Indirect Taxes and Customs (CBIC) official. The initiative follows recommendations made by the GST Council on October 8 to streamline the return filing process and minimize mismatches between liabilities and Input Tax Credit (ITC).

Speaking at an ASSOCHAM conference, Gaurav Singh, Commissioner (GST Policy Wing) at CBIC, stated that the modified GSTR-1 form and improved Invoice Management System (IMS) are designed to eliminate the need for editing GSTR-3B forms. 'If the need does not arise, there won’t be any case for notice based on mismatches,' Singh said. The draft forms will be hosted on the 'myGov' platform for public comments with a 30-day window.

Singh noted that approximately 80 percent of current GST notices are issued due to return mismatches. Currently, businesses can modify or edit GSTR-3B, which is a self-declared summary return and monthly tax payment form, leading to discrepancies with GSTR-1 data.

As part of the procedural updates, enhancements in FORM GSTR-1, GSTR-1A, and IFF (Invoice Furnishing Facility) will be prescribed to enable better reconciliation with GSTR-3B. Additionally, a new rule will be included in the Central Goods and Services Tax (CGST) Rules to introduce an 'Electronic Statement of tax paid on reverse charge basis and input tax credit claimed' on the portal. This facility is intended to help taxpayers correctly report tax liability and ITC on supplies liable to Reverse Charge Mechanism (RCM).

The GST Council has recommended that provisions regarding the alternate mechanism for amendment of liability and ITC in GST returns be brought into force starting from the return period of April 2027. These measures are expected to reduce demand notices and system-generated intimations while strengthening supply chain compliance.

In a separate development at the conference, GST Appellate Tribunal (GSTAT) President Justice (retd) Sanjaya Kumar Mishra highlighted procedural errors in tribunal filings. He stated that 95 percent of the approximately 7,000 cases filed before the GSTAT principal bench do not fall within its jurisdiction, with 40 to 50 appeals transferred daily to respective state benches. Mishra noted that mistakes regarding tribunal jurisdiction under Section 112 of the CGST Act are being made by trade professionals, tax practitioners, and revenue officials alike.

"Tax compliance and documentation are critical operational pillars for growing businesses and startups in India. With nearly 80 percent of current GST notices stemming from return mismatches, streamlining forms like GSTR-1 and GSTR-3B will significantly reduce administrative burdens and litigation costs for entrepreneurs. Founders and finance teams should closely monitor these regulatory updates and use the upcoming public consultation window to understand how the proposed changes will impact their monthly compliance workflows and cash flow management." — Dr. Shishir Gupta, Founder & CEO, StartupLanes