Step by Step Guide

Matching GSTR-1 and GSTR-8 for E-commerce sellers

This is quite important to understand why matching GSTR-1 and GSTR-8 is a penultimate task. We have witnessed many eCommerce sellers receiving notice for huge mismatches observed in their returns. Thus, they have to pay penalties and interest for resolving mismatches.

Before we move further, understand the returns associated first.

GSTR-8: It is filed by e-commerce operators like Flipkart and Amazon.

GSTR-1: It is filed by the eCommerce sellers/suppliers who sell via such operators.

What does GST law state?

Under Section 52 of CGST Act, 2017

The details of supplies furnished by every operator (GSTR-8) shall be matched with the corresponding details of outward supplies furnished by the concerned supplier (GSTR-1)  registered under this act in such a manner and within such time as prescribed.

For this purpose, the expression “concerned supplier” shall mean the supplier of goods and services or both making supplies through the operator.

What type of details are matched in GSTR-1 with GSTR-8?

Under Rule 78 which deals with the Matching of details furnished by the e-commerce operator with the details furnished by the supplier.

The following details relating to the supplies made through an e-commerce operator, as declared in Form GSTR-8 shall be matched with the corresponding details declared by the supplier in Form GSTR-1.

  • State of Place of Supply
  • Net Taxable Value

“If net taxable value and Place of supply will match automatically, tax payable will match”

It is further provided if the time limit for furnishing Form GSTR-1 has been extended, the date of matching shall be extended accordingly.

GSTR-1 and GSTR-8 matching with an example

Let us understand this via an example, ABC Ltd sold goods worth Rs. 10 Lacs via C-Kart an e-commerce operator out of which goods worth Rs. 1 lac were returned in the month of May. Now, C-Kart will file GSTR-8 up to 10th June and show the Place of supply and net taxable value of sales made by ABC Ltd.

ABC Ltd will also file GSTR-1 and show the place of supply net taxable value of sales made by it.

The data should match here otherwise GST department will definitely send a notice. This is the only reason why large eCommerce operators generate monthly reports for e-commerce sellers GSTR-1 filling.

Read Type of monthly reports provided by eCommerce operators.

How TCS helps us matching in GSTR-1 and GSTR-8?

As we know, eCommerce operators are required to collect TCS on the sales made through them. The rate of TCS is 1%.

If you are unaware of TCS provisions for eCommerce, please read the following before moving further.

Read: TCS under GST with an example

If we reverse calculate it we can get the value of taxable supply made during the period.

For example, Sales made via an E-commerce operator are Rs. 10,000. TCS collected by e-commerce operator is Rs. 100 ( 1% of Rs. 10,000). Now TCS collected would be known to you in reports provided by the eCommerce operator.

Perform the reverse calculation.

Rs. 100 *100/1 = Rs. 10,000.

Why do we do this?

Sometimes we are unaware of net sales made via e-commerce operators, due to excessive returns and deductions therefore the turnover part(taxable value) is difficult to calculate. This is the way to double-check the taxable value shown in GSTR-1 by the eCommerce seller.

Differences in GSTR-1 and GSTR-8

Under Section 52, Where the details of outward supplies furnished by the operator(GSTR-8) do not match with the corresponding details furnished by the supplier (GSTR-1), the discrepancy shall be communicated to both the persons in such manner and time as prescribed.

The amount in respect of which any discrepancy is communicated and which is not rectified by the supplier in his valid return or the operator in his statement for the month in which discrepancy is communicated shall be added to the output tax liability of the said supplier when the value of outward supplies reported by the operator is more than the value of outward supplies reported by the seller.

Interest Payment: The concerned supplier whose output tax liability has been increased shall pay interest at the rate of 18%.

Read about Interest in GST

Any discrepancy in the details furnished by the operator and the seller shall be made available to the supplier in Form GST MIS-3 and to the eCommerce operator in the Form GST MIS-4 on the GST portal on or before the last date of the month in which matching has been carried out.

Inquiry by the GST officer

Any authority not below the rank of “Deputy Commissioner” may serve a notice either before or during the course of any proceedings under this act, requiring the operator to furnish information relating to

(a) Supplies of goods and services or both effected through such operator during the period.

(b) Stock of goods held by the suppliers making supplies through such operator in the godowns or warehouses, managed by the operator and declared as additional place of business by the suppliers (Sellers).

Every operator whose notice has been served under this section shall furnish the required information within 15 working days of the date of service of such notice and failure to submit information by any person after notice will attract a penalty which can be extended to Rs. 25,000.

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