CMA Krishna N. Chaubey

The simple meaning of ITC (Input Tax Credit) is reduce your tax liability at the time of paying tax on supply or services but as prescribed in Central Good and Service Tax Act, 2017’ every registered person shall, subject to such conditions and restrictions as may be prescribed in the manner specified to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

Further, Section 16 (4) of Central Goods and Services Tax Act, 2017’ provides that the registered persons/companies/dealers can take ITC (Input Credit) on the invoices or debit notes for supply of goods or services or both after the due date of furnishing of the return raised during ‘July 2017 to March 2018’ earliest of the following dates:

a) On or before the due date of furnishing the return (GSTR-3B & GSTR-1) for the month of September 2018 i.e. 20-10-2018.

Or

b) Before filing of Annual Return for ‘July 2017 to March 2018’.

Considering  the provision of the Act, to avail the pending ITC pertaining to invoices raised in ‘July 2017 to March 2018’ by the vendors within the due date of filing the return of September 2018. Therefore, it is advisable that the return in Form GSTR-3B for September 2018 should be filed within the due date i.e 20th October 2018, for availment of credit on invoices / debit note of 2017-18, to avoid any reversal, interest and penalty.

The registered persons/companies/dealers are advise to detail reconcile his book of accounts with GSTR-3B and GSTR-1, which has been filed during ‘July 2017 to March 2018’ and avail all pending eligible ITC (Input Tax Credit) before filing of September 2018 month GST Returns, otherwise ITC (Input Tax Credit) of same period (July 2017 to March 2018) will be lapse. Thus the registered persons/companies/dealers shall take the following steps to reconcile book of accounts with GSTR-3B and GSTR-1 filed during July 2017 to March 2018 and avail all pending eligible Input Tax Credits.

1) Details Scrutiny of book of accounts and reconcile with ITC availed in GSTR-3B : There may be various instances, where ITC (Input Tax Credit) did not availed during the filing of returns i.e July 2017 to March 2018. Such invoices, debit notes related to said period are required to find out so that ITC (Input Tax Credit) have to avail within due date of the September 2018 month GST returns i.e 20.10.2018.

2) Download GSTR-2A and Reconcile with of ITC availed in GSTR-3B: Now it is not mandatory to verify GSTR-2A with availed Input Credit in filed GSTR-3B but there are many reason to reconcile availed input tax credit with GSTR-3B to avoid any reversal of credit as well as interest and penalties.

a) In business, very much possibility that supplier or service provider send invoices to purchaser or service recipients but such invoices not received at all.

b) Issue debit notes or credit notes in book of accounts but unable to informed the concerned parties.

c) Banker not issue any invoices on bank charges and registered persons/companies/dealers unable to know about availability of ITC (Input Tax Credit) on the banking transactions.

d) There are many instances, where the goods have been received in financial year 2017-2018, but due to some inspection of department or quality issues entries are not taken in book of accounts.

e) The debit notes issued during the period of April 2018 to September 2018 pertaining to invoices raised during financial year ‘2017-2018’ shall evaluate and avail before due date of filing of annual return or before due date of filing GSTR-3B for the month of September 2018, whichever is earlier.

In Central Goods and Service Tax Act, 2017, has been clear prescribed that no rectification of error or omission in respect of the details furnished under section 37 (1) shall be allow after furnishing of the return under section 39 for the month of September 2018 (i.e GSTR-3B due date is 20.10.2018following the end of the financial year to which such details pertain, or furnishing of the relevant Annual return, (i.e due date 31.12.2018) whichever is earlier.

(Author is associated with K.N.Chaubey & Associates, Cost & Management Accountants, 204,2nd Floor, Gajraj Mension, Bistupur,Jamshedpur-831001. Mob:099 3933 9158)

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One response to “Eligibility & Conditions for Taking Input Tax Credit in relation with September 2018 month GSTR Returns (GSTR-3B & GSTR-1)”

  1. D B Kumar says:

    Nicely explained and well timed article.

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