Reconciliation of ITC & Reporting in GSTR 9 for FY 2018-19

The process of preparing and filing of annual return in GSTR 9 for FY 2018-19 under GST has started and there have been a number of doubts arising as to how to reconcile the Input Tax Credit (ITC) under various tables pertaining to the FY 2018-19, because the GSTR 3B filed for 2018-19 contains rectifications for the FY 2017-18 also and there could be certain ITC excess/ short availed in GSTR 3B filed for FY 2018-19, which might have been rectified in the GSTR 3B for the period April 2019 to September 2019, whereas some rectifications might have been missed to be done till September 2019. These issues have arisen because the GSTR 3B once filed cannot be rectified and any correction if required needs to be done in subsequent returns within the time limit prescribed under Section 39 (9) and other relevant provisions as allowed vide Circular No. 26/26/2017-GST, dated 29-12-2017. Time limits of Section 16(4) and related judgements will also need to be considered, however, the implications and disclosure requirements on the disputed legal aspects or any sub-judice matters have not been factored in these case studies as they may remain subject to the facts of the case and the views and conclusions of the tax experts/ auditors handling such instances for their clients, being matters of professional decision and competence.

We all know that there are various types of issues arising in the reconciliation/ its presentation in the GSTR 9, especially because the monthly returns for FY 2018-19 contained rectifications pertaining to FY 2017-18, but there is no table/ column or part for mentioning the same for reconciliation in the GSTR 9 of FY 2018-19. This problem may arise while filing GSTR 9 for subsequent years also if and until the Forms remain unchanged. The issues relating to reconciliation of output tax liability and reporting in GSTR 9 for FY 2018-19 were discussed in the first part of our article published on 13-06-2020. Further, to understand how the Input Tax Credit can be dealt with under the relevant tables in GSTR 9, regarding the liability relating to FY 2018-19 along with the rectifications of preceding year and rectifications relating to FY 2018-19 done in the succeeding year, a few case studies presented as below may be helpful. However, the implications and reporting of the case studies under Table 8 have been excluded in this article for better understanding of the more relevant and important tables 6,7, 12 and 13. While studying these examples, it may be kept in mind that the numbers appearing under Table 6A and Table 9 (Tax Paid through ITC) are auto-populated and hence cannot be changed.

For the sake of simplicity in understanding, Case Study No I to VI, we have considered only one head of GST, without separate data under CGST, SGST and IGST. The real cases may need such break up but the same approach can be applied.

The above may help in preparing the GSTR 9 for FY 2018-19. There can be many more very complex situations which may need to be resolved and reported after proper reconciliation, however, the basic principles guiding the process shall remain the same. Any feedback/ suggestions/ difference in opinion with reasons to differ from experts are welcome.

We shall try to come out with another article soon with the impact and reporting of the above case studies in Table 8 in light of GSTR 2A, if readers find this one useful and worthy.

Author: Article is jointly Authored by CA Raginee Goyal (Sr Partner) and CA Jewel Goyal (Partner) of Raginee Goyal & Associates.