GSTR‑1 Errors Can Be Rectified in a Later Month of the Same Year: GSTAT Prayagraj

The GST Appellate Tribunal, Prayagraj quashed a ₹1,41,495.94 demand built on a GSTR‑1 versus GSTR‑3B mismatch, holding that Section 39(9) allowed a trader to correct B2B supplies wrongly shown as B2C within the same year.

Section 39(9) of the CGST Act, as it then stood, fixes only an outer time limit for correcting errors in returns. It does not require that a mistake in one month’s GSTR‑1 be corrected only in the next financial year [M and S v. Commercial Tax Officer, Prayagraj & Ors., 2026-juristway.com-3201-GSTAT(Prayagraj)-GST].

The appeal was heard by Mahtab Ahmad, Member (Judicial), who wrote the judgment, and Ashish Varma, Member (Technical).

For FY 2019-20, the trader’s GSTR‑1 showed tax of ₹1,40,754, while GSTR‑3B showed ₹76,188 paid. Acting on that mismatch, the proper officer confirmed a demand under Section 73(9) of ₹70,747.97 each under CGST and SGST, including interest and a penalty of ₹10,000 under each head.

The trader explained that its accountant had reported B2B supplies from June 2019 to February 2020 as B2C. On noticing the error, it reported those supplies again as B2B in the March 2020 GSTR‑1, which inflated turnover, although tax on them had already been paid month by month through GSTR‑3B.

Both lower authorities rejected this, holding that the correction should have been made in the next year’s returns. The appellate authority also treated a short payment of ₹64,566 as admitted.

The Tribunal directed the trader to upload its GSTR‑1 returns, a statement of the misreported supplies with recipients’ GSTINs, the invoices and the March 2020 GSTR‑3B. The State Representative acknowledged the factual position during verification, and the Tribunal found that the supplies were in fact B2B.

On the law, the Tribunal held that Section 39(9) imposes only two conditions. The correction must not arise from scrutiny, audit, inspection or enforcement, and it must be made by the due date of the September return of the following year. Nothing in it bars correcting an error in a later month of the same year.

Any slips made while correcting were procedural, did not affect the actual tax liability, and arose in the early years of GST in a revenue-neutral case. The Tribunal said that “the Revenue authorities ought to adopt a sympathetic and pragmatic approach while dealing with a bona fide registered person/taxpayer.”

The appeal was allowed. The order-in-original and order-in-appeal were set aside, and the trader is entitled to a refund of any amount recovered or deposited under them, in accordance with the refund provisions.

2026-juristway.com-3201-GSTAT(Prayagraj)-GST