Hurry up!!! Last chance to avail the input tax credit
As per section 16(4) of CGST Act 2017, a registered taxpayer can avail the input tax credit on the invoices or debit notes for the supply of goods or services or both of the previous financial years on or before the due date of furnishing the return(GSTR -3B) for the month of September following the end of the financial year or furnishing of the relevant annual return, whichever is earlier.
For example – An input tax credit for the invoices or debit notes pertaining to July 2017 to March 2018 can be claimed latest by
25th October 2018 unless extended further ( due date of furnishing the return for the month of September 2018 was extended from 20th to 25th vide a press release dated 21st Oct’18)
Due date of furnishing the Annual Return Form GSTR-9 for the previous year ending 31st March’18
whichever is earlier.
Section 16(4) for your reference
What all needs to be verified or reconciled before filing returns (GSTR-1 and GSTR-3B) for the month of September 2018?
⊗ Reconciliation of input tax credit availed in GSTR-3B with the books or corresponding invoices/bills/documents
If due to some human or system error recording of any invoice was left. Then the registered taxpayer has the last chance to avail the input tax credit for the same by recording the same in GSTR -3B of September’18 Month.
It is possible that an invoice has been raised by a vendor but it has not been received by the purchaser/ receiver due to any reason, then in such cases a follow up with the vendor and get the invoices and then avail ITC within the time.
⊗ Reconciliation of input tax credit availed in GSTR-3B with input tax credit as per GSTR-2A
One needs to verify whether only the credit which was available as per GSTR-2A has been availed in GSTR-3B. If the taxpayer has failed to avail any ITC as per GSTR-2A then the same shall be availed now. There can be many reasons for the difference between the credit available as per GSTR-2A and credit availed in GSTR-3B. For e.g – ♠ Non -filing of GSTR-3B, ♠ Incorrect GSTIN was entered so credit is not reflecting, ♠ a clerical error may lead to the incorrect amount of credit available, ♠ a seller might have recorded it as a B2C transaction instead of B2B. etc.
Verify whether the ITC on bank charges have been availed in GSTR-3B or not
Banks are liable to pay tax on the income they earn by way of bank charges from customers etc. The said tax paid by the bank will be an input tax credit for the customer. But it is possible that the invoice for the same has not been received by the customer from the bank, so a follow-up with the bank is needed to get the invoices and then avail ITC within the time.
Verify whether any transaction has been recorded as B2C instead of B2B
It is possible that GSTIN number was not provided initially to the vendor and this has resulted in the issuance of the wrong invoice i.e. supply to an unregistered person (B2C). In such cases, it is the last opportunity to get those invoices amended from the vendor as B2B and then avail the ITC for the same. You must also make sure that the vendor further rectifies the same in his GSTR-1 not later than GSTR-1 for the month of September 2018.
⊗ Inter-company transactions/ Inter-organization transactions
It is possible that for certain administration/ business support services (like Tax/HR/Legal/Finance Team) are provided by one of the units/branches/subsidiary etc to the other unit/branch/head office/parent company etc. It may have different GSTIN based on location or business etc. so it would be counted as a distinct person under GST. And the supply of services to such distinct person would call for payment of GST for providing a service. Generally, the cost for the services may be apportioned between the different units but it is possible that GST was not charged for the same which would lead to non-compliance. So it is advised to check such transactions and the provider(one unit) of such service makes the GST payment first and then it is availed by the receiver(other units) of service.
⊗ Credit notes relating to invoices of July 2017 to March 2018
To reduce the GST liability to the extent of credit notes issued relating to invoices of July 2017 to March 2018, such credit notes need to be mandatorily uploaded on or before filing GSTR-1 for the month of September 2018.
⊗ Debit notes relating to invoices of July 2017 to March 2018
Input tax credit on
- all the debit notes which are issued by the supplier/vendor post-March 2018 upto September 2018
- which pertains to original invoices raised between July 2017 to March 2018
has to be availed before the due date of filing GSTR-3B for the month of September 2018.
⊗ Verification of input tax credit available for distribution by Input Service Distributor
All the recipient units should avail the input tax credit based on the invoices issued by an input service distributor from July 2017 to March 2018. It is advised that all such ITC distributed on ISD invoices should be availed on or before the due date of the return(GSTR-3B) for the month of September 2018.
You may also like :
- Basic provisions of TDS u/s 51 of GST
- Some important clarifications on TDS under GST
- Basic provisions of Audit under GST
- Annual Return of GST
- Registration for TCS under GST
- TCS as per GST u/s 52
- Due date for GSTR-1 extended & waiver of late fees