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Extension of due date for claim of ITC – What it means for you





The Ministry of Finance in its press release yesterday cleared the air around the notices being sent by the Tax department for matching of GSTR 2A with GSTR 3B. It said that the taxpayers can claim the input tax credit based upon the self- assessment and based upon the invoices. It has now clarified that there shall be no limitation for claim of Input Tax credit provided that the taxpayers has valid tax invoice and the same is not blocked as per the Act. The release emphasised that the taxpayer must fulfil the conditions of Section 16 to claim the input tax credit. Section 16 prescribes the following conditions for claim of ITC:

i)          Taxpayer is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying document as may be prescribed;
ii)       Taxpayer has received the goods or services or both;
iii)    Subject to provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and
iv)     He has furnished the return under section 39,   

The view which we have been taking and which we also clarified to readers of our blog now also stands for the department as well. The matching of GSTR 2A with GSTR 3B no stands bad in law.

Now coming to another contagious issue of claim of Input Tax Credit in respect of Invoices/debit notes received during the period of July 2017 to March 2018, it has been clarified by the ministry that due date has been extended for few taxpayers. Taxpayers who had recently migrated to GST by virtue of Notification No: 47/2018 CT dated 10th September 2018 shall be allowed to claim credit against such invoices till 31st December 2018 or filing of annual return which ever is earlier.

In this regard we feel that there are certainly some issues which Ministry skipped while framing the press release:

1.     The due date for filing GSTR 1 for newly migrated taxpayers is extended to 31st December 2018, How can such taxpayer file his annual return by 31st December itself. Annual return is reconciliation between monthly returns and financial statements.
2.     For recent migrators who shall file their GSTR 3B after 20th October 2018, how would the government determine whether the inward supplier in such case is eligible for claim of ITC.
3.     31st December also being the last date for the GST Audit, how would the newly migrated taxpayers would be able to manage GSTR 1, Annual Returns and the GST Audit all together on one due date.

There are certainly some coordination issues which the authorities at the helm of affairs should immediately resolve so that the government saves itself from getting stuck in its own web. But one thing is very sure, there is an urgent need that proper instructions should be issued to field officers on regular basis so that harassment to taxpayers on account of unfounded conventions such as matching of GSTR 2A and GSTR 3B could be stopped.

Regards

CA. Keshav R Garg
(B.Com, FCA, CS, ISA(ICAI))
Author: Bharat's GST Ready Reckoner
            A Handbook on GST

Member: Indirect Tax Committee of CII, 
Founder: MyGst.MyTax Foundation
Adviser: Industries Association of Chandigarh
Adviser: Chambers of Chandigarh Industries

Address: 3328, First Floor, Sector 27 D, Chandigarh, India - 160 019
Phones: +91-172-461-3328, +91-98880-90008
Mail: keshavgarg@kdai.in



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