Introduction

Completed 3 years in operation but still struggling to rise-up to the average expectations of the stakeholders; GST has proved to be a loop of extension of compliance deadlines. One such compliance is the filing of Annual Return (Form GSTR 9) and GST Audit (Form GSTR 9C). As of now, the due date of filing GSTR 9 and GSTR 9C is fast approaching and is extended till 30th September 2020 which is again expected to be further extended in the light of the pandemic crisis.

The filing of GSTR 9 and GSTR 9C for FY 17-18 was no less than a Herculean task. Even though, CBIC has made forms simpler and has made many fields optional still it does not resolve many confusions of the taxpayers. There has been significant confusion and struggle in the minds of taxpayers on “How to disclose transactions/adjustments of FY 17-18 which were reported or paid in GSTR 3B of FY 18-19 in the GSTR 9 of FY 18-19?”. Although, there was positive anticipation amongst the taxpayers that forms for FY 18-19 would be amended with the inclusion of tables for disclosure of adjustments related to transactions of FY 17-18. However, there have been no such changes made and furthermore CBIC has not yet provided any clarifications on this issue whatsoever. Thus, in this need of the hour, the author has compiled different possible scenarios of adjustments with possible solutions which may be helpful for understanding. The scenarios are presented below:

A. Output

1. Transactions/invoices of FY 17-18, reported and paid in GSTR 3B of FY 18-19

Books/AFS Paid in GSTR 3B Disclosure in FY 18-19 Comments
GSTR 9 GSTR 9C
17-18 18-19 X 1. Such transactions would have been ideally disclosed in Table 10 of GSTR 9 of FY 17-18 and would be excluded from disclosure in GSTR 9 of FY 18-19.
2. There would be a difference in Table 9 where tax payable < tax paid. Appropriate reconciliation could be prepared and attached with GSTR 9C annexures and auditor may give comments in Table 9 of GSTR 9C

2. Debit Note scenarios

Original invoice Debit note date Reported/paid in GSTR 3B Disclosure in FY 18-19 Comments
GSTR 9 GSTR 9C
17-18 17-18 18-19 X Same as Scenario1 above
17-18 18-19 18-19 Table 4(not in 4J) Yes In few cases, this transaction also could be reflected in Table 10 of GSTR 9 of 17-18 in such case same as scenario 1; if not, this would be treated as a normal supply of FY 18-19 and effect would be given in Table 4 of GSTR 9 accordingly.

3. Credit note scenarios

Original invoice Credit note date Reported & reversed in GSTR 3B Disclosure in FY 18-19 Comments
GSTR 9 GSTR 9C
17-18 17-18 18-19 X 1. Such transactions would have been ideally disclosed in Table 11 of GSTR 9 of FY 17-18 and would be excluded from disclosure in GSTR 9 of FY 18-19.
2. There would be a difference in Table 9, where tax payable > tax paid. Appropriate reconciliation could be prepared and attached with GSTR 9C annexures and auditor may give comments in Table 9 of GSTR 9C
17-18 18-19 18-19 Table 4(not in 4I) Yes In few cases, this transaction also could be reflected in Table 11 of GSTR 9 of 17-18 in such case same as above; if not, this would be treated as a normal reversal of outward supply in FY 18-19 and effect would be provided in Table 4 figures.

4. Advances received scenarios

Advance received Tax paid in GSTR 3B Invoice issued Adjusted in GSTR 3B Disclosure in FY 18-19 Comments
GSTR 9 GSTR 9C

17-18

17-18 18-19 18-19 X Table 5I

Such advances would have been ideally disclosed in Table 4F of GSTR 9 of FY 17-18.

17-18

17-18

17-18

18-19 X

Table 9 & 10

1. This would have led to double tax payment in FY 17-18 and would have been disclosed in Table 11 of GSTR 9 of FY 17-18.

2. Tax paid in table 9 of GSTR 9 would show less amount than tax payable. Need to give reconciliation comments in table 9 & 10 of 9C

B. Input

5. ITC pertaining to FY 17-18 claimed in GSTR 3B of FY 18-19

Option ITC of Invoices Claimed in GSTR 3B Disclosure in FY 18-19 Comments
GSTR 9 GSTR 9C
I 17-18 18-19 Table 6B Table 12 B & 14 1. This ITC would have been disclosed in Table 13 and Table 8C of GSTR 9 of FY 17-18.
2. Please note, the disclosure in Table 6B would increase Total ITC figures in Table 8B and would create a reconciliation difference in Table 8D. In case, there is a significant difference which may invite department scrutiny, then it is better to disclose the same in Table 6M.
3. It is better to prepare reconciliation and further auditor may give appropriate comments in Table 12F for the same
II 17-18 18-19 Table 6M Table 12 B & 14
III 17-18 18-19 X X Some industry experts are also suggesting this view which is not to disclose in GSTR 9 of FY 18-19 and auditor may give appropriate comments for reconciliation difference which would appear in Table 6J in Part B which would ideally be equal to Table 13 disclosure in GSTR 9 of FY 17-18. However, the difference appearing in Table 6J may invite department scrutiny.

6. ITC pertaining to FY 17-18 reversed in GSTR 3B of FY 18-19

ITC Availed Reversed in Books Reversed in GSTR 3B Disclosure in FY 18-19 Comments
GSTR 9 GSTR 9C
17-18 17-18 18-19 Table 7H Table 12 B & 14 It would have been a part of Table 12 of FY 2017-18 GSTR 9. However, the same was merely a disclosure requirement having no tax impact.
17-18 18-19 18-19 Table 7H Table 12 B & 14 It would have been a part of Table 12 of GSTR 9 for FY 2017-18 which was merely a disclosure requirement having no monetary impact. Further, it would result in difference between ITC as per books and GSTR 3B & appropriate reason must be given in Table 13 of GSTR 9C.

C. Reverse Charge

7. RCM paid in GSTR 3B of FY 18-19 in respect of transactions of FY 17-18

Note:

(i) CBIC had released a clarification on this issue vide press release dated 03.07.2019 in sl.(g) which stated that since the payment was made during FY 2018-19,the input tax credit on such payment of tax would have been availed in FY 2018-19 only. Therefore, such details will not be declared in the annual return for the FY 2017-18 and will be declared in the annual return for FY 2018-19.

(ii) The time limitation of claiming ITC for a particular financial year as mentioned in Section 16(4) of CGST Act i.e., the due date of GSTR 3B of September month following the year to which such invoice or debit note pertains to or due date of filing of annual return whichever is earlier; is basically linked to the date of respective invoice or debit note and not to the date of transaction ( The provision of date of debit note has been inserted via Finance Bill 2020 however not notified yet hence not considered in this article). A similar analogy applies to ITC on RCM transactions.

(ii) Now, the time limitation for claiming ITC as per Section 16(4) is as follows:

Invoice date Last date of ITC claim Impact in GSTR 9 disclosure
17-18 March 19 GSTR 3B There would be no impact in disclosure in GSTR 9 of FY 18-19 of RCM payments made in respect of FY 17-18 transactions.
18-19 Sept 19 GSTR 3B Considerable impact in respect of the scenarios where RCM payment is made -after Sept 19 GSTR 3B date in GSTR 9 of FY 18-19.

(iv) Therefore, in order to analyze the scope of availment of ITC for RCM payments made in respect of FY 18-19 after Sept 19 GSTR 3B due date i.e., 20th Oct 2019; we may have to divide RCM into two types:

    1. RCM transactions/purchases from registered persons – In this case since the invoice for supply would have been issued by the registered vendor in the FY 18-19 itself thus, time limitation of Section 16(4) would be applicable vis-à-vis FY 18-19 and hence claiming ITC after Sept 19 GSTR 3B due date would be difficult and prone to litigation.
    2. RCM transactions/ purchases from un-registered persons – In this case, a self- invoice is required to be issued by the recipient in terms of clause (f) of Section 31 of the CGST Act. In case the self-invoice is issued by the recipient in FY 19-20 upon booking or making the payment of reverse charge then it could be construed that time limitation of Section 16(4) would be applicable vis-à-vis FY 2019-20 and not FY 2018-19 as it is linked to the date of issue of self-invoice i.e., FY 2019-20 and to the date of transaction Hence, ITC would be available. In the author’s opinion, this view is prone to departmental objection however since the ambiguity still pertains hence, the same could be argued and defended. There is a dire need for clarification in this regard by CBIC.

Scenarios for understanding:

Transaction RCM vendor Invoice / Self-invoice date Paid in GSTR 3B ITC eligibility Disclosure in FY 18-19 Comments
GSTR 9 GSTR 9C
17-18 RD 17-18 18-19 Yes Table 4G and Table 6D Table 12 /14 ITC is eligible hence assumed to be claimed in books and GSTR 3B in 18-19 only. Therefore, no comments in GSTR 9C is required. In case, it would have been booked in FY 17-18 then there would have been a reconciliation difference in Table 12/14 and thus, appropriate comments could be given by auditor in GSTR 9C
17-18 URD 18-19 18-19 Yes Table 4G and Table 6C Table 12 /14
17-18 RD 17-18 19-20 No x x As explained above, ITC would time-barred w.r.t Section 16(4). Disclosure of tax paid under RCM would be in GSTR 9 of FY 19-20
17-18 URD 19-20 19-20 Yes x x As explained above, ITC will not be time-barred w.r.t Section 16(4) as a view could be taken that it would be linked to self-invoice date which is being issued by the recipient on payment of RCM in FY 19-20. Disclosure would be in GSTR 9 of FY 19-20
17-18 URD 17-18 19-20 No x x ITC would be time-barred w.r.t Section 16(4) since self- invoice was already issued in FY 17-18 itself irrespective of RCM payment in GSTR 3B
18-19 RD 18-19 19-20 after Sept 19 No X x As per clarification issued by CBIC since the RCM is paid in FY 19-20, the same would be part of GTSR 9 of FY 19-20
18-19 URD 19-20 19-20 after Sept 19 Yes x X

D. Others

8. Tran-1 credit availed in FY 18-19 either through filing of TRAN-1 form online (special cases of technical glitches) or claimed in GSTR 3B voluntarily

Claimed in Disclosure in FY 18-19 Comments
GSTR 9 GSTR 9C
TRAN-1/2 online 6K/6L Table 12 /14 Appropriate comments could be given by auditor in GSTR 9C as such cases are specific cases which are allowed by CBIC for non-filing due to technical glitches.
GSTR 3B 6M Table 12 /14 A description in Table 6M mentioning TRAN-1 credit could be given; further appropriate comments could be given by auditor in GSTR 9C

9. Tran-1 credit availed in FY 17-18 but subsequently reversed in FY 18-19

Claimed in Reversed in GSTR 3B Disclosure in FY 18-19 Comments
GSTR 9 GSTR 9C
TRAN-1/2 online 18-19 7F/7G or 7H Table 12 /14 Appropriate comments could be given by auditor in GSTR 9C for the reconciliation difference.

10. Advance received in FY 17-18 and refunded back to customer in FY 18-19

Advances received Refunded Disclosure in FY 18-19 Comments
GSTR 9 GSTR 9C
17-18 18-19 4L It could be reduced from the total advances received figure in 4F or disclosed separately in 4L. Appropriate comments for the same could be given by Auditor in Part B if required for scenarios where amount involved is huge.

11. Summary table for a reference of changes made in Form GSTR 9

Table No. Description Options
Tables 4 and 5: Details of Outward Supplies
4B to 4E Details of outward taxable supplies Tables can be filled net of CN/DN and amendments, instead of separately reporting in tables 4I to 4L
5A to 5F Details of outward supplies on which tax is not payable Tables can be filled net of CN/DN and amendments, instead of separately reporting in tables 5H to 5K
5D to 5F Exempt, nil-rated and non-GST supplies Option to report a single consolidated figure under “exempted” supplies in table 5D
Table 6: ITC availed during the FY
6B to 6E Details of ITC availed Option to report all input tax credit (ITC) under the “inputs” row only
6C & 6D ITC on RCM Option to report details of both tables 6C and 6D under 6D only
Table 7: ITC reversals during the FY
7A to 7E Details of ITC reversed Option to report the entire amount under “other reversal” in table 7H
Table 8: Other ITC Related Information
8A to 8D Details of ITC availed Option to upload details/reconciliation in PDF format in Form GSTR-9C (without the CA certification)
Tables 10 to 18: Other Information
12 & 13 Reversal of ITC availed during the previous FY & ITC availed for the previous FY Optional
15A to 15D Refunds claimed, sanctioned, rejected and pending Optional
15E to 15G Demand of taxes, taxes paid and demands pending Optional
16A to 16C Information on supplies received from composition taxpayers, deemed supply under section 143 and goods sent on approval basis Optional
17 & 18 HSN-wise summary of outward and inward supplies Optional

Conclusion

Hope the above could bring some clarity and may be helpful for disclosure of spill-over transactions of the previous year. There are high hopes from the upcoming 41St GST council meeting which is scheduled this week where it is expected that the GST council may discuss issues and hardships related to the filing of Annual return for FY 18-19 for the taxpayers. With only a month shy, there is a clamoring need for CBIC to provide an amended Form GSTR 9/9C with updated instructions or a press release issuing relevant clarifications.

(The author could be reached at mannu@hiregange.com for any queries /feedback Acknowledgement of special efforts by my colleague CA. Akshay Hiregange for vetting the article)

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