Time limit for availing ITC for F.Y. 2017-18 after Gujarat HC Judgment

Time limit for availing ITC for F.Y. 2017-18 is last date of filing annual return (31/8/2019)

As per section 16(4) of CGST Act, 2017, last date for taking input tax credit in respect of invoice or debit note pertaining to a financial year is

• Due date of furnishing of return under section 39 of CGST Act, 2017 for the month of September following the end of that financial year or
• Actual date of furnishing annual return (FORM GSTR-9) of that financial year.

whichever is earlier

As per proviso to Section 16(4) last date for availing the input tax credit for the period July’2017 to March, 2018 is the due date of filing of return under Section 39 for the month of March,2019 i.e. 20^th April,2019.

It is believed that the form of return under section 39 of CGST Act, 2017 is FORM GSTR-3B.

In other words last date for availing input tax credit for the period July 2017 to March 2018 is due date of furnishing of FORM GSTR-3B for the month of March 2019 i.e. 20^th April 2019.

So now every tax payer is thinking that input tax credit for the period July 2017 to March 2018 which has been missed out for availment cannot be claimed in Form GSTR-3B after 20^th April 2019.

Judgment of Hon’ble High Court of Gujarat:

But honorable High Court of Gujarat in the case of AAP & Co, Chartered Accountants v/s Union of India passed an order stating that the form of return specified for section 39 is FORM GSTR-3 and not FORM GSTR-3B.

Therefore last date for availing input tax credit relating to invoices and debit note issued during the period July 2017 to March 2018 should be

• Due date of filing of return under section 39 in FORM GSTR-3 for the month of March 2019
• Actual date of filing annual return

whichever is earlier.

Form GSTR-3B is not a substitute of FORM GSTR-3. It is only a temporary arrangement till due date of filing the return in FORM GSTR-3 is notified.

Notification No.44/2018 Central Tax dated 10^th September 2018 states that the due date of filing return under section 39 of CGST Act, 2017 (FORM GSTR-3) for the months of July 2017 to March 2019 will be notified in future.

So it is evident that the due date of filing FORM GSTR-3 for the month of March 2019 is not yet fixed.

Therefore in my opinion last date for availing input tax credit relating to invoices and debit note issued during the period July 2017 to March 2018 should be last date for filing annual return (FORM GSTR-9) for the period July 2017 to March 2018 i.e. 31^st August 2019.

So if any input tax credit pertaining to invoices and debit notes issued during the period July 2017 to March 2018 is missed out to be availed then it can be availed while filing FORM GSTR-3B for the month of June 2019 or by the last, while filing FORM GSTR-3B for the month of July 2019 that is till 20^th August 2019.

Now what kinds of input tax credit has been missed out for availment.

There are 2 kinds of input tax credit

• Input tax credit of GST paid by supplier of goods/services supplied to you
• Input tax credit of GST to be paid by you as recipient under reverse charge mechanism on notified supply of goods/services

It is evident from the current scenario that many tax payers is not paying GST which is liable to be paid by them as recipient under reverse charge mechanism on notified supply of goods/services.

Action plan for availing Input Tax Credit of GST paid on RCM basis:

Scrutinize the debit side of Profit & Loss account of the period July 2017 to March 2018 to identify expenses on  which recipient has to pay GST on RCM basis.

Refer Notification No. 13/2017 Central Tax (Rate) and Notification No. 10/2017 Integrated Tax (Rate) for supplies attracting GST under RCM basis.

Some of the examples are

• Director’s sitting fees expenses, office rent paid to director who gives their own property on rent to the company or any other service supplied by director to the company – any service supplied by director of a company/body corporate to such company/body corporate is notified supply of service vide Notification No. 13/2017 CT (R) on which the recipient of service (company/body corporate) has to pay GST under reverse charge
• Import Series.
• Ocean freight paid to shipping companies for transporation of goods via vessel from place outside India till custom port in India.
• Legal fees paid to individual advocate including senior advocate or firm of advocates for rendering legal services.

Pay the GST on such notified supplies of goods/services under reverse charge and then avail input tax credit of it while filing FORM GSTR-3B for the month of June 2019 or by the last, while filing FORM GSTR-3B for the month of July 2019 that till 20^th August 2019.

Action plan for availing input tax credit of GST paid by supplier of goods/services supplied to you which has been missed out for availment

• Reconcile FORM GSTR-2A with FORM GSTR-3B for the month of July 2017 to March 2018 to find out whether any input tax credit of GST charged by your vendors have been missed out for availment
• Reconcile books of accounts with FORM GSTR-2A to find out any input tax credit which has been booked by you in your accounts but is not reflected in FORM GSTR-2A due to lapse on part of your vendor to include it in their outward supply in FORM GSTR-1
• Link of judgment of Guj. HC

 https://taxguru.in/goods-and-service-tax/gstr-3b-not-return-section-39-cgst-act-2017-gujarat-hc.html

Disclaimer – Views expressed are strictly personal