♦ The government provides enough time to us to rectify mistakes which are made by us in routine filing of returns. For the financial year (19-20), mistakes can be rectified till the September return of the next financial year(20-21) which is filed in October. So September 2020 return has very significant importance.

♦ Please check all the 21 points mentioned in next sheets before filing the return.

Last chance to Avail Pending GST ITC for the financial year 2019-20

♦ As you must be aware, the last chance to avail pending GST ITC for the FY 2019-20 is while filing GSTR-3B for the Sep’20 return period in October 2020. This means that you will need to match the invoices between GSTR-2A and your purchase book for the complete financial year 2019-20.

♦ You will have to thoroughly check your books of accounts if some GST ITC is still pending. Although it is a lengthy process, but it can save you lac of rupees as GST which is still pending and has not been claimed by you till date.

1. GST ITC not claimed on earlier reversal made by you

  • If you have reversed any GST credit during the year on account of payment not made to suppliers within 180 days.
  • You should be aware that after payment to the supplier, you can again claim the GST which you have already reversed on non-payment.
  • You should thoroughly check your books of accounts and if any such entry is still pending, you can take GST Credit now.

2. To check Credit for Reverse charges

  • You should check your books whether you have paid GST under Reverse Charge mechanism on the appropriate item and at the appropriate rate and claimed the ITC (input) for the same in the FY 19-20.
  • Sometimes, it is seen that the accountant deposits the GST under reverse charge mechanism and forgets to claim the same in his books of accounts due to work load.
  • It is a common mistake, which you should cross-check and if there is any such item, you should take ITC of such GST paid by you under reverse charge.

3. To cross check purchase bills with GSTR -2A

  • It is the prime duty of the accountant to cross-check the purchases with the GSTR-2A available on GST portal. During the year, there are so many missed purchases for which we do not receive invoices such as:-
  • Driver lost the invoice in transit.
  • Driver forgot to deliver the invoice with material.
  • Driver provided photocopy of the invoice and you did not take ITC on photocopy of the bill and still waiting for original invoice.
  • There may be so many such instances. So reconciliation is must for drawing the difference. The reconciliation can save lacs of rupees.

4. Your sale reversed by the customer

  • Suppose you have supplied the material to your customer and deposited the GST due on the sale. Whereas your customer has rejected the same and issued Debit Note to you, which is not in your knowledge till date.
  • Such discrepancies will also come out when you will reconcile the GSTR-2A with your books of accounts.
  • If there is such instance, you will be able to take GST ITC on the basis of Debit Note issued by the party.

5. Debit Note for Quality Difference raised by your customer

  • Suppose you have supplied the material to your customer for Rs.6 lacs and deposited the GST due on the sale. Whereas your customer has issued Debit Note to you for quality difference, which is not in your knowledge till date.
  • Such discrepancies will also come out when you will reconcile the GSTR-2A with your books of accounts.
  • If there is such instance, you will be able to take GST ITC on the basis of Debit Note of the party.

6. GST ITC not taken on Bank Charges like Neft & RTGS charges

  • During the year different banks debit different type of bank charges plus GST to our Current account as well as to our Cash Credit Account, but they do not provide us any kind of voucher for claiming GST ITC.
  • You can take credit of the GST charged by banks to our accounts simply on the basis of bank statements provided by banks.
  • At this time GST entries related to banks are visible in the GSTR-2A, since most of the banks have started filing GST returns.

7. GST ITC not taken on Bank Charges like Processing Fees & unit inspection charges

  • The persons who are having Cash Credit accounts with banks have to pay Processing charges for renewal of C/C limits and also have to pay unit inspection charges which are directly debited to their C/C accounts by banks.
  • They should check their books of accounts whether they have taken GST ITC for such entries.
  • If not taken earlier, you can check GSTR-2A and take missing GST ITC of such items.

8. GST ITC not taken on Telephone, Mobile & Internet Charges

  • You can check Telephone, mobile bills and internet bills for the complete year, whether you have claimed GST ITC on such expenses.
  • If Telephone, Mobile & Internet Bills are in the name of the business house and address and place of business is mentioned along with GST number, only then you can claim the input tax credit.
  • Sometimes these type of little entries are missed by the accountant, because payments for these expenses are often given in cash by the cashier and bills/documents do not reach to the accountant.
  • You can re-check these entries with GSTR-2A.

9. GST ITC not taken on Job-work charges

  • In every factory, small works of job-work are got done from outside small vendors and they issue GST invoices for such entries.
  • Sometimes, this type of small entries is missed and GST ITC remains unclaimed.
  • So after checking GSTR-2A, you can come across to such small entries and you can claim GST ITC now in September 202o return.

10. GST ITC not taken on Payment for Parcel/Postage & Courier Charges

  • GST paid on this type of small expenses always remains un-claimed because these payments are mostly done in cash.
  • When you will check GSTR-2A, you will find such entries which will be still un-claimed in your books of accounts because small expenses are always not accounted properly.
  • So it is advised to check GSTR-2A properly for checking the un-claimed GST ITC.

11. GST ITC not claimed on Insurance of vehicles

  • This type of GST ITC always remain un-claimed because the whole amount paid to insurance company is expensed out in books of accounts directly and GST portion remains un-claimed.
  • If insurance company has charged GST on insurance premium and the vehicle is registered in the name of business and used for business purpose and proper address and GST number is mentioned on the insurance policy, you can claim GST ITC.

12. GST reversal done by you not accounted by your supplier in his books

  • Sometimes you issued Debit note to your supplier for quality difference or anything else but he does not account for the same in his books of accounts. You should check this type of entries in your books of accounts.
  • You purchased material for Rs. 12 lacs but issued debit note for Rs. 2 lacs for quality difference and reversed GST on the basis of Debit note. But your supplier did not accept the debit note.
  • If your supplier has not accepted debit note, you can reverse the entry and claim the GST ITC paid by you on the Debit Note.

13. GST ITC not claimed on Rent paid to Electricity Board

  • We pay electricity bill and directly expense out the same in our books of accounts but we miss the GST ITC paid by us on electricity meter rent.
  • Although it becomes a very nominal amount, yet we can claim this amount in our books, if it still remains un-claimed by us.
  • Please check all the electricity bills and check whether GST paid on electricity meter rent has been claimed or not.

14. GST ITC not claimed on Travelling expenses of employees

  • GST need to be paid when a business spends money on travelling expenses for official work done by its employees.
  • GST credit on travelling expenses for office use can be claimed. But it is important that a proper GST invoice for the same is available.
  • If you are having such entries and having proper documents, you can claim GST ITC paid on such expenses.

15. GST ITC not claimed on office rent paid

  • ITC can be claimed on office rent paid if you are a registered dealer and the person to whom rent is paid is also registered under GST. Further a proper GST invoice for the same is to be acquired.
  • If you have paid rent and still not claimed GST ITC on such entries, you can claim in September 2020 return.
  • You can cross-check this type of entries from GSTR-2A also.

16. GST ITC not claimed on Printing and stationery expenses

  • Every office uses printing and stationery for office use. This too can be claimed as ITC if purchased with a GST invoice from a registered dealer.
  • You should check this type of entries if printing and stationery have been directly expensed out and whether GST ITC has been claimed or not.
  • This type of small entries can be missed by us for taking GST ITC because mostly these payments are made by cash.

17. GST ITC not claimed on Drinking water made available to employees

  • Drinking water not being a beverage is eligible for ITC claim. Further in accordance to CGST Amendment Act 2018 section 17(5)(b) states that an employer is entitled to claim ITC on goods/ services which it is statutorily obligated to provide to its employees.
  • Thus since drinking water falls under the ambit of statutory obligation on the part of the employer to provide to the employees ,the same is eligible for ITC claim.
  • If you have made such expense, you can claim GST ITC now in September 2020 return.

18. GST ITC not claimed on Air Conditioner

  • If a registered person purchases an air conditioner for business purpose and invoice is in the name of the business entity, then he will be able to claim credit for tax paid on purchase of air conditioner.
  • If you have purchased Air Conditioner and have installed the same in your business premises, you can claim GST ITC.
  • Check your books of accounts for such entries, if pending GST, now claim the same.

19. GST ITC not claimed on Television

  • The registered person purchased T.V to place it in his office in the waiting room for his customer/ clients who wait back in the waiting room.
  • Here the T.V is being used for business purpose and not for personal use and is therefore allowed to be claimed as ITC on purchase from a registered GST dealer on receiving an appropriate GST invoice for the same.
  • If you are having such entry and still missing GST ITC, you can now claim it in your September return.

20. GST ITC not claimed on Refrigerator

  • Refrigerator purchased at work place for use in business and for the furtherance of business is eligible to claim ITC, if purchased from a registered dealer with GST invoice, if business has planned to use for its employees and workers and Refrigerator has been installed in the work place.
  • If you are having any such entry, you can claim the unclaimed GST ITC now.

21. GST ITC not claimed on office furniture

  • GST can be claimed on purchase of office furniture provided the selling dealer should have opted for regular scheme and should not be a composite dealer.
  • The use of furniture is for office use only and not for personal use and the value of furniture debited to fixed asset block should be without GST.
  • A proper GST invoice for the same is to be issued by the dealer selling the furniture.
  • If you are having any such type of entry, you can still claim GST ITC in September 2020 return.

Conclusion

  • The person responsible for accounting should give full attention to all the purchase bills and bills should be checked with e-way report on daily basis.
  • Proper attention should be given to small expenses in office like stationery, courier, telephone bills, mobile bills, freight payments.
  • Proper invoice should be there for all the GST ITC which you are claiming in your books.
  • First of all, GST number and name of the unit should be properly checked on the invoice before accounting in books.

Author Bio

Qualification: Post Graduate
Company: SADA SHIV GROUP OF INDUSTRIES MUBARIKPUR PUNJAB
Location: derabassi, Punjab, IN
Member Since: 15 Nov 2019 | Total Posts: 3
I have joined A.B.Tools Limited Parwanoo in the year 1987 and left the company after 8 years. In this duration of time, I was grown as Assistant Manager Accounts.Then I have joined Sada Shiv Group of Industries in the year 1995 and till date working with this group. View Full Profile

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13 Comments

  1. shekhar says:

    Sir we need a suggestion , actually we received a Vendor bill of Mar-20 month, which booking and payment we forgot to done before 30-09-2020.

    Bill date is 21-03-2020 and Now we are booking in Oct-20 month and doing payment.

    Sir plz suggest can take this bill ITC claim in our Sep-20 month GSTR3B and make reconciliation statement for Annual Audit .

    Vendor already filled a GSTR1 and showing this invoice.

    It’s request to you Please suggest any solution.

    1. Neelam says:

      In my suggestion, you can take credit of the bill as your vendor has already filed GSTR-1.
      You should book this bill in your books of accounts in the month of September 2020 because you have still not filed GSTR-3B.
      While filing Annual Return, you will have to point out reconciliation for this amount.

    2. Neelam says:

      You can take credit of this bill in your September 2020 return.
      You should book this bill in your books in September 2020.
      Since your vendor has already filed GSTR-1, there is no problem in taking GST Credit.

    1. KATTU says:

      GST paid on general insurance is available, if expense is for the business purpose. So, GST on insurance premium paid for factory building, motor vehicle, fire insurance etc will be eligible for Input Tax Credit (ITC).

      However, the ITC on the motor vehicles will only be allowed when used
      for further supply of vehicles, or
      for training purpose, or
      transportation of passengers, or
      for transportation of goods.
      Hence, if vehicle is used for any other purpose ITC will be disallowed.

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