Goods and Services Tax – GST – By: – Anuj Bansal – Dated:- 11-9-2018 – Apart from regular compliances and deadline in GST, do you know that one more deadline is there i.e. 30th Sept., 18? May be said date is going unnoticed by many professional, but it has a big relevance from ITC point of view. Even the GSTR 9 Notified by the govt. vide notification 39/18 CGST requires us to report the details of ITC for previous Financial Year i.e. 2017-18 considered till 30th Sept., 18 and same is for the reason that after 30th Sept., 18 credit pertaining to previous FY 2017-18 will lapse and lapse means a financial loss. Now the question is; have we determined the expected lapse of credit on 30th Sept., 18? What are recourse to save yourself from such Financial Loss? Considering the above, in this article, an attempt has been made to analyse the issues and actions required to mitigate the loss on account of lapsing of credit. Following are the points which are required to be taken care off before
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there is certain defect in considering the credit like invoice / debit note is not traceable, the vendor shall be approached for duplicate copy of invoice / debit note otherwise it is going to be loss of credit after Sept, 18. 2. Credit note pertaining to FY 2017-18 shall be issued upto 30th Sept., 18 otherwise, tax amount in the Credit note cannot be reduced from the output liability. As per Section 34(2) of the CGST Act, any registered person have to declare the value of the credit note in the return in the month in which credit note is issued. However, no such Credit Note can be issued for the previous Financial Year after filing of return for the month of Sept. Accordingly, in case the supply has been made in FY 2017-18, the credit note is required to be issued in regard to same till 30th Sept., 18 otherwise the reduction in output liability on account of credit note will not be allowed. 3. Corrections in Returns (a). Correction in details of outward supply in GSTR 1 – Refer Provis
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culars in the return. However, no such rectification can be made after the due date for furnishing of return for the month of Sept. Therefore, every dealer has to reconcile his return i.e. GSTR 3B with his books of account and in case any omission or error is discovered, same has to be rectified immediately i.e. before filing return for the Month of Sept., 18. 4. Credit relating to exempted supplies is required to be reversed as per Rule 42 of CGST Rule and final calculation shall be done by Sept., 18 As per Section 17 of CGST Act, credit relating to exempted supplies is required to be reversed in Books of Account as well as in GST Returns. The reversal of credit is done as per Rule 42(1) of the CGST rules which states that common ITC relating to exempted and taxable supplies shall be reversed in the ratio of exempted turnover to total turnover. Such calculation is done on monthly basis and reported in monthly returns. However, as per Rule 42(2), ITC pertaining to exempted supplies has
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sidered in the return for the month of Sept,18. 6. Section 16(4) v/s. Section 16(2) of CGST Act are tangled with each other As per Section 16(4) of the CGST Act, credit relating to Invoice and Debit Note for a Financial Year can be considered latest by filing return for the month of Sept., 18. However, Section 16(2) prescribes some qualifying conditions for availing credit. The conditions mentioned in Section 16(2) of the CGST Act are that (i) a person must be in possession of an Invoice, (ii) He has received the goods or services, (iii) tax charged by supplier has been paid to the govt. and (iv) return has been furnished. Further, proviso to above section states that payment should have been made to the vendor within 180 days otherwise credit is required to be reversed and the same can be reclaimed after making of payment to the vendor. Certain situations are being given hereunder as illustration where invoice has been received but credit could not be claimed due to non-compliance of
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as paid tax in Oct,18. In which month credit in this case can be claimed? As per Sec 16(2)(c), credit shall be available in Oct, 18 i.e. at the time when payment of tax is made by vendor. However, as per Section 16(4) the credit cannot be considered in the return after Sep,18 because invoice pertains to Mar,18. There are contradictory provisions in this regard. Credit should be considered in the return for Sept, 18, if not considered at the time of issuance of invoice i.e. in Mar,18. 3. Invoice was received from vendor in 2017-18 reversal of credit on account of 180 days done and reclaim on payment after 180 days. Invoice was received from the vendor in Feb,18. Payment was not made to vendor within 180 days therefore credit reversed. Payment is made in Oct, 18. Therefore, credit has to be reclaimed in Oct,18. As per Proviso to Sec 16(2) , credit shall be available in Oct, 18 when payment is made. However, as per Section 16(4) the credit cannot be considered in return after Sep,18 becau
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