QUESTION

I AM FILING THE GST RETURN FOR THE PERIOD 2018-19 IN THE MONTH OF DECEMBER 2019. WHETHER I AM ELIGIBLE FOR THE SET OFF OF INPUT TAX CREDIT FOR THE 2018-19 WHILE FILING THE GST RETURN 3B.

ANSWER

Facts of the case: Eligibility of set off of ITC in case GSTR-3B of 2018-19 filed in December 2019.

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

SECTION 39 OF CGST ACT
(9) Subject to the provisions of sections 37 and section 38, if any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in such form and manner as may be perscribed subject to payment of interest under this 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.

SECTION 49 OF CGST ACT

(4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed.

(5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of''

  (a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;

   (b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax;

   (c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

Interpretation: As per the provisions of Section 39, any registered person after furnishing of return can rectify any error, ommission or incorrect particulars before the due date of 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.

In your case you are furnishing late return i.e. return of 2018-19 in December 2019, then this proviso will not be applicable in your case but you can set off only the ITC available in your Electronic Credit ledger for payment of tax while furnishing GSTR-3B. There is no restriction on set off of available ITC while filing late return.

Further section 49 regarding payment of tax, interest, penalty and other amounts, nowhere restricts set off of amount available in Electronic credit ledger for payment of tax in case of late filing of return.

However you cannot claim ITC related to 2018-19 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 invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.

Conclusion: You can set off ITC available for payment of tax in case of late filing of GSTR-3B.(Reply dt.02-06-2020)