QUESTION

1. The Firm got notice from GST Department for difference in GSTR 3B and GSTR 1 during FY 2018-19. 2. The difference is due to ITC shown in GSTR 1 is Rs. 52 Lakhs for the month of April-18. But the same has never been adjusted/paid in GSTR 3B/Credit Ledger of the party in any months. 3. Now the party has submitted GSTR 2A with copy of invoices of FY 2017-18 showing ITC eligibility of Rs. 52 Lakhs which has never been claimed in GSTR 3B in any months. But the party has claimed and utilized ITC Rs. 52 Lakhs for payment in GSTR 9 of FY 2017-18. 4. The disputed ITC of Rs. 52 Lakhs was only adjusted in GSTR 9 for FY 2017-18 but not in GSTR 3B/Credit ledger and eligibility has been justified vide GSTR 2A of FY 2017-18 alongwith original invoices. 5. Now the department is asking for reversal of Rs. 52 Lakhs in cash via cash ledger/DRC-03 alongwith interest for delay in payment as ITC not claimed in GSTR 3B for more than 4 years hence the party is now not eligible for same.

ANSWER

FACTS OF THE CASE:

ITC related to FY 2017-18 not claimed in GSTR-3B later on utilized for payment in GSTR-9 for FY 2017-18.

LAW APPLICABLE:

SECTION 16 OF CGST ACT
(4) 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 or debit note pertains or furnishing of the relevant annual return, whichever is earlier.

SECTION 39 OF CGST ACT
Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year to which such details pertain, or the actual date of furnishing of relevant annual return, whichever is earlier.

FORM GSTR-9 (Instruction)
9. Towards the end of the return, taxpayers shall be given an option to pay any additional liability declared in this form, through FORM DRC-03. Taxpayers shall select -Annual Return in the drop down provided in FORM DRC-03. It may be noted that such liability can be paid through electronic cash ledger only.

INTERPRETATION:

As per section 39 any error or omission in GSTR-3B shall not be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier.

Further as per section 16, 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 or debit note pertains or furnishing of the relevant annual return, whichever is earlier.

Since the time period for rectification of error/ommission related to FY 2017-18 in GSTR-3B has already elapsed. Further no ITC can be claimed through GSTR-9, also as per the instructions given in GSTR-9 liability arises if any while filing of GSTR-9 can be paid through electronic cash ledger only.

Therefore ITC of Rs 52 lakhs not claimed earlier in any return (now not eligible) and utilized to pay liability in GSTR-9 is not correct and required to be reversed through DRC-03 along with interest.

CONCLUSION:

ITC related to FY 2017-18 not claimed in GSTR-3B is now not eligible as the time period specified has alraedy elapsed. Therefore ITC not eligible utilised for payment of liability in GSTR-9 is required to be reversed alongwith interest. (Reply dt. 03/05/2022)