The main intention of removal of difficulties (ROD) order no. 02/2018 was to facilitate all the registered persons providing additional opportunity to rectify the errors or omissions of the financial year 2017-18 including availment of the GST input tax credit which was not availed within the due date i.e. September 2018. Now, the due date for the rectifications/amendments in the GSTR-1 and availment of ITC in GSTR-3B has been extended through ROD order no. 02/2018 till March 2019 return. This article provides an insight into benefits & limitation of the order. Also, we provide details of various practical transactions of FY 17-18 and the action points in GSTR-3B/GSTR-1/GSTR-9 annual return.
In most of our earlier laws, there was an option of revising the returns which was filed, although, now only amendments in subsequent returns are allowed under GST in lieu of any rectification/omissions of previous returns. The above-mentioned circular was released to provide such benefits to the assesses as the GSTR 2 & 3 were deferred.
Any rectifications/amendments for transactions pertaining to FY 17-18 could be performed with in the due date of filing September 2018 month return.
Extension of time limit for disclosing output liability in GSTR-1 return:
In sub-section (3) of section 37 of the said Act, after the existing proviso, the following proviso shall be inserted, namely: –
“Provided further that the rectification of error or omission in respect of the details furnished under sub-section (1) shall be allowed after furnishing of the return under section 39 for the month of September, 2018 till the due date for furnishing the details under sub-section (1) for the month of March, 2019 or for the quarter January, 2019 to March, 2019”.
Before introduction of the above provision, the time limit for making rectification is allowed till filing of September 2018 return and now through this amendment it was extended up to till filing March 2019 return.
Now any invoices, debit and credit notes erroneously reported or omitted to be disclosed in form GSTR-1, the registered person can rectify/amend the details up to filing of March 2019 return (GSTR-1 due date is 11th of April 2019, subject to extensions if any)
Note: The above order is in relation to Section 37 (i.e. form GSTR-1) and corresponding amendment is not provided in the Section 39 (i.e. GSTR-3B/3). Therefore, any error or omission in GSTR-1 details can be rectified/amended but errors or omissions which affect the output liability cannot be altered in GSTR-3B.
Extension of time limit for availing ITC:
In sub-section (4) of section 16 of the said Act, the following proviso shall be inserted, namely:-
Provided that the registered person shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.
Before introduction of the above provision, the availment of ITC on invoices and debit notes in relation to FY 17-18 was allowed up to filing of September 2018 month return and through this amendment the time limit has been extended up to filing of March 2019 return (GSTR-3B due date 20th April 2019, subject to extensions if any).
Now the registered person can avail ITC on the invoices/debit notes pertaining to FY 17-18 up to filing of March 2019 GSTR-3B return, limited to where the invoices/debit notes which are uploaded by the vendor in the Form GSTR-1 up to March 2019 (i.e. reflecting in recipient GSTR-2A)
It is important to note, ITC on debit notes even if dated post 31st March 2018 against the original invoices issued during the period July 2017 to March 2018 is also extended/permitted upto march 2019 return in terms of Section 16(4) only.
Action points – GST Transactions – Outward & Inward:
Outward supplies in relation to F.Y 17-18:
|SI. No.||Observation||GSTR-1||GSTR-3B||GSTR 9|
|1.||A) sales invoices and,
B) Debit notes and,
C) Credit notes, were missed to upload in GSTR-1 but liability discharged through GSTR-3B
|Can upload up to 11/04/2019 (unless extended)||No action required
|No action required|
|2.||Schedule I transactions and other income not disclosed in returns||Can upload up to 11/04/2019 (unless extended)||Sept’18-time limit has passed, requires to be discharged voluntarily through DRC-03** (cash/credit)||Disclose differential liability and discharge through DRC-03 (cash only) $$|
|3.||A) Sales invoices and,
B) Debit notes, were missed to upload in GSTR-1 and tax liability also not discharged in GSTR-3B
|Can upload up to 11/04/2019 (unless extended)||Sept’18-time limit has passed, requires to be discharged voluntarily through DRC-03** (cash/credit)||Disclose differential liability and discharge through DRC-03 (cash only) $$|
|4.||Credit notes not disclosed in GSTR-3B||Can be disclosed in GSTR-1 up to 11/04/2019. (unless extended)||Cannot reduced tax liability through GSTR-3B, may apply for refund through portal under ‘Any other’ head||As there is no option for reduction of tax liability in GSTR-9, may apply for refund through portal under ‘Any other’ head|
|5.||Exempt/Non-GST supplies are not disclosed in GSTR-1 & 3B||Can be disclosed in GSTR-1 up to 11/04/2019 (unless extended)||Cannot disclose in GSTR-3B as Sept’18-time limit has passed||Disclose in GSTR 9 (as per Books)
Impact of Rule 42/43 to be seen.
Inward supplies in relation to F.Y 17-18:
|SI. No.||Observation||GSTR-3B||GSTR 9|
|6.||ITC not availed in GSTR-3B||Avail ITC by 20th April’19 subject to ITC reflecting in GSTR-2A||Fill in Table 8C – ITC availed period between Apr’18 to Mar’19# & 8E – ITC available but not availed|
|7.||RCM – RP liability not discharged||Sept’18-time limit has passed, requires to be discharged voluntarily through DRC-03** (cash/credit) and ITC is ineligible||RCM liability discharge through DRC-03 (cash only)|
|8.||RCM – URP liability not discharged in GSTR-3B but accounted in books (self-invoice in FY 17-18)||Discharge RCM liability through DRC-03** (cash/credit) and ITC in-relation to that transaction is ineligible||Disclose differential liability and discharge through DRC-03 (cash only) $$|
|9.||RCM – URP liability not discharged in GSTR-3B but accounted in books (self-invoice in FY 18-19)||Aggressive view:
Discharge liability in GSTR-3B and avail the ITC of the same
Disclose differential liability and discharge through DRC-03 (cash only) $$ and ITC in-relation to that transaction is ineligible
|10.||RCM liability paid in returns but missed to account in books||No action required as tax liability and ITC considered||To ensure books vs GST Returns is performed to capture all liability and ITC|
|11.||ITC relating to Bill of entry is not availed in the returns||ITC may be fully eligible, as Section 16 is silent on time limit (litigable)||Format issue – ITC on imports – time limit only upto March’18 (amendment awaited)|
|12.||ITC not reversed in GSTR-3B in case of credit notes received and reflected in GSTR-2A||ITC can be reversed up to the filing of March 2019 return through GSTR-3B||Fill in Table 8C – ITC availed period between Apr’18 to Mar’19#|
|13.||In case of ITC excess availed, TRAN reversals and Rule 42/43/37 reversals||Discharge ineligible ITC through DRC-03 and not in GSTR-3B** (cash/credit)||Disclose differential liability and discharge through DRC-03 (cash only) $$|
(URP – Unregistered Person, RP – Registered Person)
**Registered person should discharge additional liability which arose during reconciling the books of accounts against GST returns through DRC-03. Although, it is unclear whether liability discharged voluntarily through DRC-03 can be linked to the payment options under GSTR-9, clarity required in this regard.
$$ Discharging through DRC-03 voluntarily before filing GSTR-9 will reduce the interest liability when compared to discharging through GSTR-9 (DRC-03). Also based on the DRC-03 format ITC balance could be utilized against tax liabilities. Although GSTR-9 (DRC-03) requires additional tax liabilities discharged through cash only, clarity required in this regard.
# Apr’18 to March’19 period extended through ROD but same has not been updated in the GSTR-9 format (still showing as Apr’18 to Sep’18)
Note: For the delayed period Interest will be applicable as per section 50(1) & 50(3)
Various issues in GSTR-9: Annual Returns:
The GSTR-9 & 9C due dates has been extended to 30th June 2019 for the period July 2017 to March 2018. Below, we would like to indicate the various shortcomings/issues in the GSTR 9 as on date:
1. GSTR-9 offline utility has not yet been provided on the GST portal.
2. In Table 6, ITC availed, reversed and reclaimed based on payments not made to vendors within 180 days (Rule 37), would throw up a mismatch as clause 6A would not include the reversal which would be included in clause 6H.
3. Whether an assessee can pay voluntarily through DRC-03 in cash now (Apr 19), and later while filing GSTR 9 (June 2019) will be allowed to link earlier filed DRC-03 against tax liability payment? Clarity not provided. This would help reduce interest cost for the genuine tax payers.
4. Time limit extension to avail ITC, i.e. upto March 2019 has not been included in the GSTR 9 format. The format still reflects the period as September 2018. Changes awaited.
5. For import of goods, time limit as per format is only from July 17 to March 18 effectively. Even the time extension upto Sept 18/Mar 19 has not been included.
6. On careful reading of Section 16 read with rule 36, it could be concluded that ITC on import of goods is not linked to the time limits mentioned therein, and therefore, it would be incorrect to include lapse of unclaimed credit on import of goods in the GSTR 9 format.
Hopefully, we obtain some clarity and requisite amendments in relation to GSTR-9.
The course of action to be adhered to in relation to GST transactions of FY 2017-18, is not very clear and apparent from the provisions in the law. The above article helps in clearing the confusion in relation to such transactions and also provides the various issues which are expected to be resolved in relation to GSTR-9 (Annual returns). Considering the various changes in law, disclosure requirements, and possible departmental reviews, it is suggested to obtain professional help during the growing stages of the newly introduced indirect tax law in India.