GST Council had earlier decided to defer the filing of return in FORM GSTR-3 and had recommended the filing of return in FORM GSTR-3B. Accordingly, the Central Government vide notification No. 21/2017-Central Tax dated 08.08.2017 had notified the last date for filing of return in FORM GSTR-3B for the month of July, 2017 as 20.08.2017

Thereafter several Concerns have been raised about whether transitional credit would be available for discharging the tax liability for the month of July, 2017. In this regard, Notification No. 23/2017- Central Tax dated 17.08.2017 conditionally extended the dates for filing GSTR-3B.

Salient points of the Notification are as follows:

Case A: Registered persons entitled to avail input tax credit in terms of section 140 of CGST Act but opting not to file FORM GST TRAN- 1 on or before the 28th August, 2017:

Here the Last date for furnishing Form GSTR-3B will remain 20th August. I.e. there is no extension in the dates of filing GSTR-3B. Before filing GSTR-3B, taxpayer has to necessarily pay the tax on or before 20th August by applying following formula.

Tax Payable = (Output Tax Liability + Tax Payable under reverse charge) – input tax credit availed for the month of July, 2017

Here once the registered person will file the GST TRAN-1, the eligible credit as per TRAN-1 will get credited to the Electronic Credit ledger of the registered person, which may subsequently be utilised for payment of GST for the month of August onwards.

Case B: Registered persons entitled to avail input tax credit in terms of section 140 of CGST Act and opting to file FORM GST TRAN- 1 on or before the 28th August, 2017:

Here the Last date for furnishing Form GSTR-3B has been extended to 28th August with some conditions, which are as follows:

(i)     Tax payer needs to compute the “tax payable under the said Act” for the month of July, 2017 and deposit the same in cash on or before the 20th August.

(ii)   Tax Payable = (Output tax liability + Tax payable under reverse charge) – (transitional credit + input tax credit availed for the month of July, 2017)

(iii) Tax payer needs to file GST TRAN- 1 (which will be available on the common portal from 21.08.2017) before filing the return in FORM GSTR-3B.

(iv)  In case the tax payable as per the return in FORM GSTR-3B is greater than the cash amount deposited by the tax payer on or before 20th August, the same needs to be paid in cash along with Interest @ 18% which will be calculated from 21.08.2017 till the date of such actual deposit.

Case C: Registered persons not entitled to avail input tax credit in terms of section 140 of CGST Act:

Here the Last date for furnishing Form GSTR-3B will remain 20th August. I.e. there is no extension in the dates of filing GSTR-3B. Before filing GSTR-3B, taxpayer has to necessarily pay the tax on or before 20th August by applying following formula.

Tax Payable = (Output Tax Liability + Tax Payable under reverse charge) – input tax credit availed for the month of July, 2017

Conclusion:

(i)     There is no change in the last date for payment of GST as per the self-assessed liability. In any case, Tax needs to be discharged on or before 20th August by off-setting the GST liability by eligible ITC and balance by challan payment.

(ii)   Even those tax payers, who are eligible to claim Transitional ITC and opting to file GST TRAN-1 on or before 28th August will need to settle self-assessed liability (after adjusting the self-assessed transitional ITC) of GST by 20th August.

(iii) In case tax payer is eligible to claim Transitional ITC but wish to claim it after 28th August, he may discharge the GST liability for the month of July without claiming Transitional ITC. In that case, after furnishing of GST TRAN-1, the same may be utilised for the payment of GST liability of subsequent month.

(iv)  In case, tax payer has already furnished the GSTR-3B before issuance of this extension notification, he may file GST TRAN-1 once it is lived and may utilise it for discharge of GST liability of subsequent months.  

(Disclaimer: This write up is based on the understanding and interpretation of authors and the same is not intended to be a professional advice.)

[The author is a Chartered Accountant and can also be reached at goyalcanitin@gmail.com]

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