As per the verdict of the Hon’ble Gujarat High Court in the case of AAP & Co. Chartered Accountants v/s Union of India [R/Special Civil Application No. 18962 of 2018 dated June 24, 2019], it was held that GSTR 3B was not a return in lieu of GSTR 3 specified u/s 39 of CGST Act, 2017 and is applicable only in the circumstances stipulated under Rule 61(5) of CGST Rules. Thus the press release dated 18th Oct, 2018 clarifying that the last date for availing ITC for invoices or debit notes issued during the period July, 2017 to March, 2018 is is the date for filing GSTR 3B of Sept i.e. 20th Oct, 2018 is held contrary to Section 16(4) of CGST Act.

Thus the last date for availing ITC for invoices or debit notes issued during the period July, 2017 to March, 2018 was:

1. Due date of furnishing of the return under section 39 (i.e. GSTR 3) for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains [such due date is yet not notified]; or

2. furnishing of the relevant annual return,

 whichever is earlier.

Thus last date for availing ITC as such was date of filing annual return by the taxpayer for the year 2017-18.

Now pursuant to the discussions in the 37th Council Meeting, Notification No. 49/2019 – Central Tax dated 9th October, 2019 was issued which amended Rule 61(5) of the CGST Rules providing that GSTR 3B shall be a return u/s 39 of CGST Act, 2017 and such rule is amended retrospectively with effect from 1st July, 2017. Rule 61(5) before amendment and after amendment has been given as under:

BEFORE RETROSPECTIVE AMENDMENT AFTER RETROSPECTIVE AMENDMENT
(5) Where the time limit for furnishing of details in FORM GSTR-1 under section 37 and in FORM GSTR-2 under section 38 has been extended and the circumstances so warrant, the Commissioner may, by notification, specify the manner and conditions subject to which the return shall be furnished in FORM GSTR- 3B electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner. (5) Where the time limit for furnishing of details in FORM GSTR-1 under section 37 or in FORM GSTR-2 under section 38 has been extended, the return specified in subsection (1) of section 39 shall, in such manner and subject to such conditions as the Commissioner may, by notification, specify, be furnished in FORM GSTR-3B electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

Provided that where a return in FORM GSTR-3B is required to be furnished by a person referred to in sub-rule (1) then such person shall not be required to furnish the return in FORM GSTR-3.

Rule 61(6) was also omitted retrospectively with effect from 1st July, 2017 which read as under:

“Where a return in FORM GSTR-3B has been furnished, after the due date for furnishing of details in FORM GSTR-2-

a. Part A of the return in FORM GSTR-3 shall be electronically generated on the basis of information furnished through FORM GSTR-1, FORM GSTR-2 and based on other liabilities of preceding tax periods and PART B of the said return shall be electronically generated on the basis of the return in FORM GSTR-3B furnished in respect of the tax period;

b. the registered person shall modify Part B of the return in FORM GSTR-3 based on the discrepancies, if any, between the return in FORM GSTR-3B and the return in FORM GSTR-3 and discharge his tax and other liabilities if any;

c. where the amount of input tax credit in FORM GSTR-3 exceeds the amount of input tax credit in terms of FORM GSTR-3B, the additional amount shall be credited to the electronic credit ledger of the registered person”

Thus this retrospective amendment overrules the above verdict of the Gujarat High Court and the last date of availing the ITC as per this retrospective amendment will be:

a. Due date of furnishing of the return under section 39 (i.e. GSTR 3B) for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains i.e. 20th October, 2018 or

b. furnishing of the relevant annual return,

 whichever is earlier.

This article is based on the personal opinions of the author and the author do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by relying on this article.

(Author can be reached at cakushalfofaria@gmail.com)

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Qualification: CA in Practice
Company: Harshad Sudhir & Co. Chartered Accountants
Location: Ahmedabad, Gujarat, IN
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