From the date of implementation of GST regime, the Government has mandated filing of GSTR-1 and GSTR-3B only. During this period, registered persons were allowed to take input tax credit (ITC) based on figure reported in GSTR-3B. Although filing of GSTR-2 was kept in abeyance but, by virtue of some provisions of GST legislation, it is necessary for them to reconcile the ITC claimed in GSTR-3B with auto populated GSTR-2A.
Following are some aspect which supports the above statement-
Tax has been actually paid to the Government:
Section 16(2) of Central GST Act, 2017, inter alia, include one condition for ITC which reads as under-
“Subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the government, either by cash or through utilisation of input tax credit admissible in respect of the said supply.”
Under GST regime, supplier shall furnish details of outward supplies (party-wise) in GSTR-1 on the basis of which output tax liability shall be determined and be paid through GSTR-3 or GSTR-3B (at present). Details furnished by supplier will be reflected to recipient in GSTR-2A on the basis of recipient shall decide the input tax credit available to him.
Therefore, unless supplier has reported supply in GSTR-1 i.e. reflected in GSTR-2A, it may not be considered as actually paid to the Government.
Note: Although supplier may say that he has reported supply in GSTR-3B but unless same is considered in GSTR-1, for recipient, practically it would be difficult to justify about ITC so claimed.
Difference in ITC claimed and ITC reflected in GSTR-2A to be added to liability of recipient:
Section 42(5) of Central GST Act, 2017 states that the amount i.e. mismatch between GSTR-1 and GSTR-2A, in respect of which any discrepancies is communicated and not rectified by supplier, shall be added to the output tax liability of the recipient.
The above provision is very clear that wherever any excess ITC claimed is found which is not reflected by supplier in his GSTR-1, shall be added to liability of recipient. In order words, this cast responsibility on recipient to ensure that ITC claimed by him is being properly reported by the supplier.
Based on above, we can conclude that recipient must ensure that all ITC claimed by him is properly reflected in his GSTR-2A. In case of any discrepancies found, same shall be promptly communicated to supplier so that he can report the same in his coming GSTR-1.
Last date to claim ITC for F.Y. 2017-18: 20 October 2018 (Due of GSTR-3B of September)
Section 16(4) of Central GST Act, 2017 put restriction on recipient to claim ITC after filing of return for the month of September 2018. Thus, where any supplier has corrected reporting in GSTR-1 post Sept 2018 then also recipient may face difficulty in claim such ITC as same was not reflected in GSTR-2A till September 2018.
It shall be noted that, being practical experience, wherever supplier report any prior period supplies in current period’s GSTR-1, such supplies gets reflected in GSTR-2A of current period and not in period to which it belongs. For Example, when invoice dated 10 February 2018 is reported by supplier in GSTR-1 of August 2018 then such invoice will reflect in GSTR-2A of August 2018 and not February 2018.
Therefore, any supply reported post September month’s return may not be considered as actually paid to the Government till September 2018 and accordingly may not be eligible for ITC on account of non-fulfilment of one of condition of section 16(2) of Central GST Act, 2017.
Where recipient possessed tax invoice and also had made payment to supplier, he may justify his claim even when supplier has not reported or reported but after September 2018 such supply. However, it will certainly lead to litigation which can be avoid by taking pre-caution at present. Therefore, registered person may undertake reconciliation exercise and get the discrepancies resolves by with supplier before end of September 2018.
Above view expressed is of my personal, based on understanding of legislation and practical experience thereto. A person may have difference view on the subject matter and may not subscribe to this view. Further, this shall in no manner be considered as legal opinion or advise as it is just for educational purpose.