After the announcement of Waiver of Late fee for Non-Filers from July 2017. Many assessees have got the opportunity to file their pending return from July 2017 without paying any Late fee or reduced late fee. Although It is looked as a Good Opportunity to file the old return and become a Compliant assessee from now onward as we know “All is not well as it appears” Overlooking some provisions may land your client in trouble though not intended.

Attention here is drawn towards Section 16(4) of the CGST Act 2017 which limits the time period of Claiming ITC for a financial year. The words of the section are reproduced here-

Section 16(4) of CGST Act 2017

A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both

after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice


Invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.”

So we can see that time limit for claiming ITC for FY 17-18 and FY 18-19 is already expired. Any Return for these period filed today or later on with or without late fee will be in contravention of this provision of Act and hence will entail Payment of ITC wrongly availed along with Interest and Penalty as per Section 73 of CGST Act 2017 which is reproduced here :

Penalty for claiming ITC wrongly in case OTHER THAN FRAUD OR WILLFUL MISSTATEMENT (Section 73)

The quantum of the penalty shall be as follows:

a) Zero, if the amount due is paid with interest prior to within 30 days of issue of SCN.


b) 10% of the amount due or Rs.10,000 whichever is greater in adjudication or if self-assessed tax or self-amount collected as a tax not paid within 30 days from the due date.

Hence, what will be the possible situation at this Juncture. The possible compliance at this moment will be to file GSTR 3B with Output liablity without claiming respective ITC of that Month, which means Nil ITC with Zero or Taxable Output as the case may be. Any return filed for Fy July 17-18 and 18-19 with any ITC showed in GSTR 3B will give a clear chance for the officer to issue SCN u/s 73 of CGST Act 2017 for contravening Provision 16(4) of the act.

Claiming any ITC in the return for this period will be an Open Invitation to Officers to issue SCN for the wrong availment.

However, there is still time available for claiming ITC for FY 19-20, hence without making any further delay, all assessees should claim the ITC for FY 19-20 before 20th October 2020 ( being the last date for filing September return ) as per Section 16(4) of CGST Act 2017.

One may note that Removal of Difficulty order under Section 172 of the CGST Act issued in respect of late fees is not overriding Section 16(4) of the CGST Act 2017 which talks about the last date till which ITC can be claimed.

Section 172 of CGST Act 2017

Removal of Difficulty order

If any difficulty arises in giving section to any provisions of this Act, the Government may, on the recommendations of the Council, by a general or a special order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or regulations made thereunder, as may be necessary or expedient for the purpose of removing the said difficulty:

Hence, Every Action by CAs and Tax consultants should be in compliance with other relevant sections.

Disclaimer: The contents of this article are for information purposes only and does not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

Author Bio

Qualification: CA in Practice
Location: Kolkata, West Bengal, IN
Member Since: 27 Jun 2020 | Total Posts: 1
CA Asif Ali, has experience of over 10 years in Accounts and Taxation Industry. Deals mostly in Indirect Tax, GST, Income Tax and Company Law Matters. Especially related to Foreign, NRI Taxation and NGOs. View Full Profile

More Under Goods and Services Tax

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

March 2021