The process of preparing and filing of annual return in GSTR 9 for FY 2018-19 under GST has already started, however, some basic doubts regarding the correct way to reconcile and report the Input Tax Credit (ITC) under various tables pertaining to the FY 2018-19 are yet be cleared by the creators and owners of the Form GSTR 9.

The reason for these doubts/ confusion is mainly because GSTR 3B cannot be amended/ revised and errors/ mistakes, if any occurred in the monthly returns of FY 2017-18 were rectified even in the monthly returns filed for FY 2018-19, but there is no table/ column or part for reporting the same for reconciliation in the GSTR 9 of FY 2018-19. The rectifications relating to FY 2017-18 were done in FY 2018-19 and the rectifications relating to FY 2018-19 were done in the subsequent six months of the succeeding year. An article on the reconciliation and reporting of Input Tax Credit (ITC) in GSTR 9 of FY 2018-19 considering the above situation based on our understanding was published on 19th June 2020. A few case studies were presented to understand how the data relating to Input Tax Credit could be presented in the GSTR 9 Tables based on our understanding. Our understanding was based on the premises that only that much ITC which pertains to the FY 2018-19 ought to be reported under the Annual Return for the FY 18-19. In other words, any ITC pertaining to the FY 17-18 which was included / reduced in the GSTR 3B of FY 18-19 as amendment/ rectification should not form part of the Annual Return in Form GSTR 9 of FY 18-19. Meaning thereby, the data which was formed part of Table 12 and Table 13 of the GSTR 9 filed for FY 17-18 need not be reported in GSTR 9 of FY 18-19. The case studies in our article dated 19th June 2020 were developed based on this approach. Let us call it Alternative I and reproduce them here for discussion with Alternative II, which creates confusion.

Alternative II represents the alternative school of thought of experts which also seems equally acceptable. The alternative II advocates the presentation of the data in GSTR 9 of FY 18-19 in such a way that the amount of Input Tax Credit (ITC) relating to FY 17-18 should be included in the amounts reported under Table 6 and 7 for the GSTR 9 FY 18-19, if it has been availed under the GSTR 3B for FY 18-19, because the said amount would have been used for payment of liability during the year 2018-19. Many experts have held a view that since the amount of “Tax paid” in Table 9 is auto populated and cannot be altered, but, the inclusion of ITC availed in FY 2018-19 andsuch ITC getting used for payment of tax in FY 2018-19, even if pertaining to FY 2017-18, ought to be included for proper reconciliation. Similarly if amount of ITC availed in 2017-18 wrongly was reversed in FY 2018-19, it ought to be reported in GSTR 9 of FY 2018-19 also to help in reconciling the ITC used for payment during FY 2018-19. This also means that the data which was reported under Table 12 and 13 of GSTR 9 of FY 17-18 shall be included under Table 7 and 6 respectively of GSTR 9 of FY 18-19 for proper reconciliation.

The reporting of ITC under Table 8 is another big concern but 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 and the confusion that is arising in this regard is not yet cleared.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, 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.

Case –I : Input Tax Credit short availed in FY 2017-18 later partly availed in FY 2018-19; Input Tax Credit short availed in FY 2018-19 later partly availed during April to September 2019:

Alternative 1
DETAILS OF INPUT TAX CREDIT
Financial Year Books of Accounts GSTR 3B GSTR 3B (FY 18-19) GSTR 3B (April to Sept 2019) DRC 03 ITC could not be availed within September 2019 to be written off in books subseq-uently
(FY 17-18) Relating to (FY 17-18) Relating to (FY 18-19) Total GSTR 3B (FY 18-19) Relating to (FY 18-19) Annual Return
17-18 100 75 5
18-19 200 20 165 185 15 20
TREATMENT IN RELEVANT TABLES OF GSTR 9
Table GSTR 9 (FY 2017-18) GSTR 9 (FY 2018-19)
6B 75 185-20 = 165
7
12
13 20 15

 

Alternative 2
DETAILS OF INPUT TAX CREDIT
Financial Year (F. Y.) Books of Accounts GSTR 3B GSTR 3B (FY 18-19) GSTR 3B (April to Sept 2019) DRC 03 ITC could not be availed within September 2019 to be written off in books subsequently
(FY 17-18) Relating to (FY 17-18) Relating to (FY 18-19) Total GSTR 3B (FY 18-19) Relating to (FY 18-19) Annual Return
17-18 100 75 5
18-19 200 20 165 185 15 20
TREATMENT IN RELEVANT TABLES OF GSTR 9
Table GSTR 9 (FY 2017-18) GSTR 9 (FY 2018-19)
6B 75 165+20 = 185
7
12
13 20 15
Note : The only difference in the above two alternatives is that ITC Rs.20 reported under Table 13 of GSTR 9 FY 17-18, which has been availed in GSTR 3B of FY 18-19 has not been reported in GSTR 9 of FY 18-19 in Alternative 1 whereas it has been reported in Table 6 in Alternative 2

Case – II: Input Tax Credit excess availed in FY 2017-18 later partly reversed/ reduced in FY 2018-19; Input Tax Credit excess availed in FY 2018-19 later partly reversed/ reduced during April to September 2019 (Assumed that no ITC Balance was available in Electronic Credit Ledger at the time of filing of GSTR 9 for FY 17-18 and FY 18-19):

Alternative 1
DETAILS OF INPUT TAX CREDIT
F.Y. Books of Accounts GSTR 3B GSTR 3B (FY 18-19) GSTR 3B (April to Sept 2019) DRC 03 ITC could not be availed within September 2019 to be written off in books subse-quently
(FY 17-18) Related to (FY 17-18) Related to (FY 18-19) Total GSTR 3B (FY 18-19) Related to (FY 18-19) Annual Return
17-18 100 120 -7
18-19 200 -13 230 217 -20 -10
TREATMENT IN RELEVANT TABLES OF GSTR 9 Note: Amount payable by DRC 03 shall be paid in cash
Table GSTR 9 (FY 2017-18) GSTR 9 (FY 2018-19)
6B 120 217 + 13 = 230
7 -7 -10
12 -13 -20
13

 

Alternative 2
DETAILS OF INPUT TAX CREDIT
F. Y. Books of Accounts GSTR 3B GSTR 3B (FY 18-19) GSTR 3B (April to Sept 2019) DRC 03 ITC could not be availed within September 2019 to be written off in books subse-quently
(FY 17-18) Relating to (FY 17-18) Relating to (FY 18-19) Total GSTR 3B (FY 18-19) Relating to (FY 18-19) Annual Return
17-18 100 120 -7
18-19 200 -13 230 217 -20 -10
TREATMENT IN RELEVANT TABLES OF GSTR 9 Note: Amount payable by DRC 03 shall be paid in cash
Table GSTR 9 (FY 2017-18) GSTR 9 (FY 2018-19)
6B 120 230
7 -7 (13) + (10) = -23
12 -13 -20
13
Note :The only difference in the above two alternatives is that ITC Rs.13 reported under Table 12 of GSTR 9 FY 17-18, which has been reversed in GSTR 3B of FY 18-19 has not been reported anywhere in GSTR 9 of FY 18-19 in Alternative 1 whereas it has been reported in Table 7 in Alternative 2

Case-III: Input Tax Credit excess availed in FY 2017-18 later fully reversed/ reduced in FY 2018-19; but Input Tax Credit excess availed in FY 2018-19 later partly reversed/ reduced during April to September 2019 (Assumed that enough ITC Balance was available in Electronic Credit Ledger at the time of filing of GSTR 9 for FY 18-19) :

Alternative 1
DETAILS OF INPUT TAX CREDIT
Financial Year Books of Accounts GSTR 3B GSTR 3B (FY 18-19) GSTR 3B (April to Sept 2019) DRC 03 ITC could not be availed within September 2019 to be written off in books subse-quently
(FY 17-18) Relating to (FY 17-18) Relating to (FY 18-19) Total GSTR 3B (FY 18-19) Relating to (FY 18-19) Annual Return
17-18 100 120 0
18-19 200 -20 230 210 -20 -10
TREATMENT IN RELEVANT TABLES OF GSTR 9 Note: Amount payable by DRC can be paid from balance available in electronic credit ledger subject to the condition that at least an amount of Rs. 10, i.e. amount payable through DRC 03 is continuously available in the electronic credit ledger since the date of filing of return for the month in which the ITC was excess availed till the date of filing DRC 03 against annual return, OTHERWISE the amount payable through DRC 03 to be paid in cash
Table GSTR 9 (FY 2017-18) GSTR 9 (FY 2018-19)
6B 120 210 + 20 = 230
7 0 -10
12 -20 -20
13

Alternative 2
DETAILS OF INPUT TAX CREDIT
F.Y. Books of Accounts GSTR 3B GSTR 3B (FY 18-19) GSTR 3B (April to Sept 2019) DRC 03 ITC could not be availed within September 2019 to be written off in books subseq-uently
(FY 17-18) Relating to (FY 17-18) Relating to (FY 18-19) Total GSTR 3B (FY 18-19) Relating to (FY 18-19) Annual Return
17-18 100 120 0
18-19 200 -20 230 210 -20 -10
TREATMENT IN RELEVANT TABLES OF GSTR 9 Note: Amount payable by DRC can be paid from balance available in electronic credit ledger subject to the condition that at least an amount of Rs. 10, i.e. amount payable through DRC 03 is continuously available in the electronic credit ledger since the date of filing of return for the month in which the ITC was excess availed till the date of filing DRC 03 against annual return, OTHERWISE the amount payable through DRC 03 to be paid in cash
Table GSTR 9 (FY 2017-18) GSTR 9 (FY 2018-19)
6B 120 230
7 0 (20) + (10) = -30
12 -20 -20
13
Note : The only difference in the above two alternatives is that ITC Rs.20 reported under Table 12 of GSTR 9 FY 17-18, which has been reversed in GSTR 3B of FY 18-19 has not been reported anywhere in GSTR 9 of FY 18-19 in Alternative 1 whereas it has been reported in Table 7 in Alternative 2

Case – IV : Input Tax Credit short availed in FY 2017-18 later fully availed in FY 2018-19; Input Tax Credit excess availed in FY 2018-19 later partly reversed/ reduced during April to September 2019:

Alternative 1
DETAILS OF INPUT TAX CREDIT
F.Y. Books of A/Cs GSTR 3B GSTR 3B (FY 18-19) GSTR 3B (April to Sept 2019) DRC 03 ITC could not be availed within Septe-mber 2019 to be written off in books subseq-uently
(FY 17-18) Related to (FY 17-18) Related to (FY 18-19) Total GSTR 3B (FY 18-19) Related to (FY 18-19) Annual Return
17-18 100 75 0
18-19 200 25 230 255 -20 -10
TREATMENT IN RELEVANT TABLES OF GSTR 9
Table GSTR 9 (FY 2017-18) GSTR 9 (FY 2018-19)
6B 75 255 – 25 = 230
7 -10
12 -20
13 25

 

Alternative 2
DETAILS OF INPUT TAX CREDIT
F.Y. Books of Accounts GSTR 3B GSTR 3B (FY 18-19) GSTR 3B (April to Sept 2019) DRC 03 ITC could not be availed within September 2019 to be written off in books subse-quently
(FY 17-18) Relating to (FY 17-18) Relating to (FY 18-19) Total GSTR 3B (FY 18-19) Relating to (FY 18-19) Annual Return
17-18 100 75 0
18-19 200 25 230 255 -20 -10
TREATMENT IN RELEVANT TABLES OF GSTR 9
Table GSTR 9 (FY 2017-18) GSTR 9 (FY 2018-19)
6B 75 230+ 25 = 255
7 -10
12 -20
13 25
Note : The only difference in the above two alternatives is that ITC Rs.25 reported under Table 13 of GSTR 9 FY 17-18, which has been availed in GSTR 3B of FY 18-19 has not been reported in GSTR 9 of FY 18-19 in Alternative 1 whereas it has been reported in Table 6 in Alternative 2

Which of the two alternatives is appropriate according to the schema of the return Form GSTR 9 is still nto clear. There is a lot of air around these forms which are already quite complicated and root cause of most of the complications and confusions is the lack of amendment/ revision facility in the monthly as well as annual forms under which liability of tax is declared and payments are of tax are made / reported as part of self-assessment. Both the above alternatives are based on a set of beliefs for logic, arithmetical validation and correct declaration and the difference caused/ created in the annual return owing to the two alternative approaches is crucial. Since none of us know how the system schema will summate/ populate the data for scrutiny from these forms, a proper clarification in this regard is a dire need. It is sad indeed that let aside a clarification, even the instructions for preparing/ filing the Form GSTR 9 are not yet updated for the FY 2018-19 online. Mere announcing and extending of due dates does not discharge the duty of the administrators. It shall be totally unfair to penalize the damage caused due to wrong filing with erroneous reporting under GSTR 9 owing to the lack of understanding/ lack of complete columns in the Form/ lack of clarity in the minds of the taxpayers or their consultants with the pressures of approaching due dates. The time and energy lost in scrutinizing/ assessing/ explaining these issues after filing of these annual returns which cannot even be revised once shall be a huge cost and loss to all stakeholders. Thus, it is a dire need that a suitable clarification/ mechanism be provided by the authorities immediately for correct reporting of the figures in case of the amendments / rectifications spanning over different financial years.

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

CA Raginee Goyal and CA Jewel Goyal

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4 Comments

  1. janaki ram kota says:

    the solution for all these problems is for the govt to devise a simple, easy to understand, with out any scope for more than one interpretation, forms. Secondly the dept should start the assessments so that one would know the position where each one- the dealer(assessee) the professional and the Dept stand in understanding what each one is expected of in fulfilling the requirements under the act. My experience is even senior officials in the dept are also in a confused state if you take them into confidence and speak to them. No offence meant to them. They are also human beings just like all of us.To err is human and the understanding levels of all are not at par with each other.

  2. P Aravindhan says:

    A suggestion: As relaxed by CBIC Table 8 of Online GSTR9 need not be filled up, instead Assessee may prepare Table 8 in .xls and attach it as PDF with GSTR9C, . In this offline Table 8, Table 8 (B) figures can be split into 8(B)(1) FY17-18 in FY18-19( i.e Table 12 & 13 of GSTR9 of FY17-18) and 8(B)( 2) FY18-19 availed in FY18-19 . Table 8C – FY18-19 availed in FY19-20, can be reported. So Table 8(D) is equal to 8(A) minus ( 8(B)(2) + 8C). Table 12 and 13 are optional for FY2018-19. In short , FY wise splitup of Table 6B and 6H is given in offline Table 8. Any downside in this suggestion?

  3. CECILY ARAVINDHAN says:

    A suggestion: As relaxed by CBIC Table 8 of Online GSTR9 need not be filled up, instead Assessee may prepare Table 8 in .xls and attach it as PDF with GSTR9C, . In this offline Table 8, Table 8 (B) figures can be split into 8(B)(1) FY17-18 in FY18-19( i.e Table 12 & 13 of GSTR9 of FY17-18) and 8(B)( 2) FY18-19 availed in FY18-19 . Table 8C – FY18-19 availed in FY19-20, can be reported. So Table 8(D) is equal to 8(A) minus ( 8(B)(2) + 8C). Table 12 and 13 are optional for FY2018-19. In short , FY wise splitup of Table 6B and 6H is given in offline Table 8. Please respond on any downside to this suggestion.

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