Format of CA certificate required for difference in ITC claim

Format of CA certificate required for difference in ITC claim as per internal circular 2A of 2022 of Maharashtra State

Office of the Commissioner of the State Tax, Maharashtra State, vide Internal Circular No. 02A of 2022 dated February 25, 2022 issued guidelines w.r.t. legal issues pertaining to return scrutiny for tax periods 2017-18 and 2018-19.

The guidelines with respect to technical issues pertaining to return scrutiny have been issued vide Internal Circular referred at Sr. No. 02. However, there are certain legal issues which have arisen in the course, of the work of return scrutiny. From an examination of the issues, it is seen that the issues have cropped up due to the bonafide errors committed by the taxpayers in their compliances. Such errors are largely due to lack of understanding of the provisions of law and issues of GSTN system in the initial stage (FY 17-18 and 18-19) of implementation of GST.

Hence, in order to clarify the doubts of field officers, few guidelines are issued. This circular applies to return scrutiny of tax periods 2017-18 and 2018-19.

Internal Circular by Office of the Commissioner of State Tax, Maharashtra State – Internal Circular no. 2A of 2022, dated 25 February 2022

 Herein, in this circular one issue is described as “ issues Arising from ITC claim”

Difference in ITC claim of GSTR-3B and ITC available in GSTR-2A of taxpayer. under scrutiny on account of:

(a) Supplier has reported B2B supplies as B2C supplies in GSTR-1 and they could not amend it till expiry of time limit. So, these transactions have not appeared in GSTR-2A of the actual recipients to whom notices served.

(b) Few suppliers have reported B2B supplies against GSTIN of some other taxpayer instead of actual recipient.

(c) Supplier had missed reporting of B to B transactions in his GSTR-1.

(d) Supplier had reported B to B transactions taxable under forward charge in Table 4B of his GSTR-1 instead of Table 4A.

And the clarification given by the respective department is as follows –

The proper officer may –

• In cases where difference in ITC claim (CGST+SGST or IGST) per supplier is 2.5 lakh or more, ask the claimant to obtain certification from the Chartered accountant of the said supplier certifying the output transactions and tax paid thereon so as to comply with the provisions of section 16.
• In cases where difference in ITC claim (CGST+SGST or IGST) per supplier is below 2.5 lakh, ask the claimant to obtain ledger confirmation of the concerned supplier along with his/her certification.
• Difference in ITC claim may be allowed on the basis of the above

As mentioned herein, the CA certificate is required if the difference in ITC Claim per supplier is more than Rs 2.50Lakh or more. Attached herewith the Format of the said CA Certificate and the format of the GST Confirmation Certificate to be obtained from the supplier.

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Independent Practitioner’s Certificate under the State Goods and Services Tax Act, 2017 (in short “SGST Act”) and the Central Goods and Services Tax Act, 2017 (in short “CGST Act”)

To,
Manager,
XYZ Limited
Nashik

1. This Certificate is issued in accordance with the terms of our assignment letter dated 26.05.2022

2. M/s. XYZ Limited (hereinafter referred to as the “Applicant’) is a registered person vide GSTIN ______________ and is having its principal place of business at ____________________ , Nashik – ______ (Pin Code) in the State of Maharashtra. The Applicant has one of the additional place of business at ____________________

3. In terms of the CGST and SGST Acts, Form GSTR-1 is a monthly / quarterly Statement of Outward Supplies to be furnished by all normal and casual registered taxpayers making outward supplies of goods and services or both and contains details of outward supplies of goods and services. Every registered taxable person, other than an input service distributor/ composition taxpayer/ persons liable to deduct tax u/s 51 / persons liable to collect tax u/s 52, is required to file Form GSTR-1, the details of outward supplies of goods and/or services during a tax period, electronically on the GST Portal.

Management’s responsibility for the Statement:

4. The preparation of the statement and filing of the GSTR1 and GSTR 3B with all required information in relation to the details of export of goods and services including deemed exports (SEZ), Summarised state level details of supplies to unregistered persons (consumers), Invoice level details of supplies to registered persons including those having UIN, Invoice level details of Inter-State supplies of invoice value greater than Rs. 2,50,000 to unregistered persons as required in terms of the CGST and SGST Acts and Rules issued under the said Acts, is the responsibility of the Management of XYZ Limited, including the preparation and maintenance of all accounting and other relevant supporting records and documents. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the statements and declaration and filing of the relevant table of the GSTR 1 and GSTR 3B and applying an appropriate basis of preparation; and making estimates that are reasonable in the circumstances.

Management is also responsible for ensuring that the company complies with the requirements of CGST / SGST Act and CGST /SGST Rules so that the recipients gets the correct Input credit of the GST paid on purchases from the supplier company.

Practitioner’s responsibility:

5. It is our responsibility to examine the books of accounts and other relevant documents / records of the supplier company, to obtain explanation from supplier company and to provide a reasonable assurance that the amounts declared in Form GSTR1, in table Table 4: Taxable outward supplies made to registered persons other than supplies covered by Table 6 have been accurately drawn from the books of accounts and other relevant documents / records of the supplier so that input tax credit can be claimed by the recipient.

We conducted our test check examination of the Statement in accordance with the Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) issued by the Institute of Chartered Accountants of India. The Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India.

We have complied with the applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.

Opinion

6. Based on our examination as above and the information and explanations given to us and “Confirmation Certificate” [ attached herewith in Annexure A] obtained from the Supplier Company, i.e. XYZ Limited ( GST No.______________), in our opinion, subject to our remarks / comments in para 8 infra, the particulars declared by the  supplier company, in GSTR1 for Maharashtra State is true and correct and in conformity with the books of accounts and other relevant documents/ records maintained under the CGST Act and the SGST Act.

7. Based on this, we state that the Maharashtra State Branch of XYZ Limited ( GST No. _____________) has declared the B2B liability of Rs.__________ in relation to sale to Registered Dealer ___________________GST _____________, as B2C liability.(Annexure -A)

8. Remarks / comments (Refer Para 6 supra):

(a) The Supplier, M/S XYZ Limited, address at, ………………………………………………. (Address Of The Supplier) Registered Dealer Under The Provisions Of  GST Act,  having GST No : ……………………………… (GST Of The Supplier) has filed all returns for the period from 01/04/2018 to 31/03/2019 in GSTR 1 along with B2B and B2C disclosure and paid taxes accordingly into government treasury through Banks notified by GST Department through the GSTR 3B for respective period under consideration.

(b) The management of the company has gone through the ledger account of M/s. …………………………………….. (Name Of The Customer) factory/office address at …………………………, (Address Of The Customer) having GST No : ____________________  (GST Of The Customer) under GST Act , maintained in the books of accounts of M/s. XYZ LIMITED , (Name Of The Supplier)

(c) Based on the management Confirmation Certificate, GST output amount, towards sale to above mentioned party and recorded in supplier books of accounts is at Rs. ……………../- has been disclosed by XYZ Limited in the B2C transactions in the e-returns GSTR -1 for said period.

Restriction on Use

9. This certificate is addressed and provided to the XYZ Limited solely for the purpose of submission to GST Department in Uttarakhand State, pursuant to the requirements of Output Tax Liability of ____________ Branch of XYZ Limited and shall not be used by any other person or for any other purpose. Accordingly, we do not accept or assume any liability or duty of care for any other purpose or to any other person to whom this certificate is shown or into whose hands it may come without our prior consent in writing.

For, Ajay Agrawal and Company
Chartered Accountants
Firm Registration No.                 

CA Ajay Ashok Agrawal
Partner
M. No.
Place:  
Date:   
UDIN :

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ON THE LETTER HEAD OF SUPPLIER

CONFIRMATION CERTIFICATE

We M/S XYZ LIMITED (Name Of The Supplier) address at, ………………………………………………. (Address Of The Supplier) Registered Dealer Under The Provisions Of  GST Act,  having GST No : ……………………………… (GST Of The Supplier) has filed all returns for the period from 01/04/2018 to 31/03/2019 in GSTR 1 along with B2B and B2C disclosure and paid taxes accordingly into government treasury through Banks notified by GST Department through the GSTR 3B for respective period under consideration, copy of which acknowledgement are enclosed herewith.

We have gone through the ledger account of M/s. …………………………………….. (Name Of The Customer) factory/office address at …………………………………………………………………………………………………, (Address Of The Customer) having GST No : ____________________  (GST Of The Customer) under GST Act , maintained in the books of accounts of M/s. XYZ LIMITED , (Name Of The Supplier).

We confirm that GST output amount, towards sale to above mentioned party and recorded in our books of accounts is at Rs. ……………../- which, by clerical mistake, we have disclosed in the B2C transactions in the e-returns GSTR -1 for said period instead of B2B transactions.

Details of invoices issued by us are as under :-

We hereby declare that we have filed GSTR 1  and GSTR 3B related to the above-mentioned invoices in time. In this connection, we hereby furnish you proof of electronically filed GST Return to the authority and challan paid if any.

We hereby declare that, the above furnished information is true to the best of our knowledge. If any discrepancies found in the above information, then we are solely responsible for tax liability including interest and penalty under GST Act.

I / We declare that I am empowered to execute this confirmation certificate and the same is given under the orders of proper authority as per the delegation of power of the organization.

For XYZ LIMITED  
(Name Of The Supplier) 

Name : _____________________
Designation – Authorised Signatory
(Signature with seal of company) 
Date  :
Place :