This article analyzes legal position under GST law with regards to claiming an input tax credit for the financial year 2017-18.
Section 16(4) of the CGST Act, 2017 provides for the time limit within which input tax credit (ITC) needs to be claimed. ITC in respect of invoices issued in FY 2017-18 cannot be claimed after 25.10.2018 (i.e. extended due date for filing GSTR-3B for September 2018).
The government came out with a Press Release dated 18.10.2018 as below.
“It is clarified that the furnishing of outward details in FORM GSTR-1 by the corresponding supplier(s) and the facility to view the same in FORM GSTR-2A by the recipient is in the nature of taxpayer facilitation and does not impact the ability of the taxpayer to avail ITC on self-assessment basis in consonance with the provisions of section 16 of the Act. The apprehension that ITC can be availed only on the basis of reconciliation between FORM GSTR-2A and FORM GSTR-3B conducted before the due date for filing of return in FORM GSTR-3B for the month of September 2018 is unfounded as the same exercise can be done thereafter also.”
In Press Release dated 18-10-2018, it has been conveyed that the claim of ITC shall not be based on the reconciliation with GSTR-2A. It will be based on the fulfilment of the conditions stipulated u/s 16.
In December 2018, proviso u/s 16(4) of CGST Act, 2017 inserted. As per the proviso, ITC in respect of invoices or debit notes pertaining to the invoices of FY. 2017-18 can be claimed even after 25.10.2018 till the due date of furnishing the return for the month of March, 2019 (20th April) if the details of such invoices/debit notes have been uploaded by the concerned supplier till the due date for filing GSTR-1 for the month of March 2019 (i.e. 11th April). To make this happen, a proviso has been inserted u/s. 37(3) to permit any rectifications of error or omission in GSTR -1 for invoices/debit notes related to FY 2017-18. It can be perused that a new condition has been inserted only in respect of ITC on those invoices/debit notes pertaining to FY 2017-18 for which claim is to be made between 26.10.2018 to 20.04.2019.
Possible Action Plan to reconcile ITC based on the aforesaid discussion:
- ITC pertaining to FY 2017-18 whether claimed before 25.10.2018 through GSTR – 3B (whether filed for FY 2017-18 or FY 2018-19 till September, 19)
- If not claimed as above, confirm whether the invoices/debit notes pertaining to FY 2017-18 for which ITC is yet to be claimed (as on 25.10.2018) has been uploaded by the supplier in GSTR1 filled by suppliers.
- If invoices (for which credit is to be claimed) appears in your GSTR-2A, the presumption is that the supplier has uploaded the invoices/debit notes. If the same does not appear in GSTR-2A, communicate to the concerned supplier to include the same in GSTR-1 to be filled for the month up to March 2019.
- If the supplier claims to have uploaded the invoices/debit notes but the same still does not appear in GSTR-2A, a written confirmation should be obtained from the supplier about reporting the relevant invoices/debit notes in GSTR-1.
It may be noted that the time limit for claiming credit even on the debit note is to be determined on the basis of the date of the original invoice. Hence if the debit note is issued on or after 01.04.2018 in respect of invoice issued on or before 31.03.2018, the time limit for claiming ITC in respect of such debit note shall still be 20.04.2019.
Conclusion: The Press Release dated 18.10.2018 states that GSTR-2A matching is not legally required for claiming the credit. However, it also mentions that conditions stipulated u/s 16 should be met. Now one of the condition stipulated u/s 16(2)(c) is that the tax in respect of which ITC is claimed should have been actually paid by the concerned supplier. Merely based on the reporting in GSTR-2A, it can be ascertained that supplier has reported outward supplies in GSTR-1 but can’t be confirmed that applicable tax has been paid on the same. Even it can not be said that the reconciliation of ITC claimed with the that appearing in GSTR-2A is not required if such ITC has been claimed on or before 25.10.2018. There is no clear answer to aforesaid discussions (i.e. whether it is pre-requisite that credit claimed in GSTR-3B must match with GSTR-2A) and even the condition stipulated u/s 16(2)(c) may be tested before the Courts to determine its validity. There can be many litigations on the subject unless the clear position under the law is clarified.
Irrespective of above, it is advisable to do the reconciliation of ITC claimed on or before 25.10.2018 for FY 2017-18 with GSTR-2A. Any gaps found should be immediately intimated to the concerned supplier so that the same can be included in GSTR-1 which is to be filed till 11th April 2019.