GST return filing: September month return invites various actions and adjustments by the taxpayers unlike other monthly returns. Here are the points which businesses must keep in mind for filing the monthly return GSTR-3B.
- By- Surbhi Premi
GST return filing: The landmark Goods and Services Tax (‘GST’) has completed two years. Businesses have already gained experience to file the monthly return GSTR-3B for the month of September in the year 2018. Notably, the September month return invites various actions and adjustments by the taxpayers unlike other monthly returns. Here are the points which businesses must keep in mind for filing the monthly return GSTR-3B for the month of September:
Claiming ITC on invoices not uploaded by suppliers
So far, the businesses are availing full ITC on the invoices received by them from the suppliers even if the suppliers have not uploaded the same on the GST portal and therefore, not reflecting in GSTR-2A. This is for the reason the matching mechanism has been kept in abeyance.
Recently, vide CGST Sixth Amendment Rules, 2019 published on 9th October 2019, the Government has amended the CGST Rules to provide that the recipient shall avail ITC only to the extent of 20% of eligible credit available, in respect of invoices, details of which have not been uploaded by the supplier in its GSTR-1. This change has been brought in order to nudge taxpayers to timely file their statement of outward supplies as recommended by the GST Council in its 37th meeting.
The initial proposal for restricting the credit to the extent of 20%, on missing invoices was made in the context of New Return Formats by the CGST Amendment Act, 2018. However, the recent amendment has been made effective from 9th October 2019. It appears that the same is intended to be applicable for GSTR – 3B to be filed for the month of September 2019 by 20th October 2019. Given this, the taxpayers are left with no time for reconciliation of invoices as the supplier would have filed their GSTR-1 already by 10th October.
The taxpayers might knock the door of the High Court seeking relief as the requirement imposed on the taxpayers is onerous considering the small-time window and adverse impact of the liquidity. Alternatively, taxpayers might request and await clarity on this from the CBIC.
Availing ITC for the invoices issued in FY 2018-19
The Hon’ble Gujarat High Court in the case of AAP & CO., Chartered Accountant Vs. UOI held that GSTR-3B is not a return in lieu of return required to be filed in Form GSTR-3. Meaning thereby, businesses could have availed ITC of missed out invoices issued during the period from July 2017 to March 2018 till the date of filing of Annual Return in form GSTR-9. It was expected that many taxpayers would get relief by this benevolent decision of the High Court.
However, as per the recent amendment made in the CGST Rules, there is no requirement to furnish GSTR 3, where GSTR 3B already has been furnished. Post amendment, GSTR 3B is the return to be filed under Section 39. Therefore, the time limit prescribed for availment of ITC in respect of invoices issued during a FY shall be the last date prescribed for filing GSTR-3B for the month of September following the end of FY or furnishing of annual return, whichever is earlier.
The above amendment appears to have overcome the basis which led the High Court Judgement in case of AAP & Company (Supra) to hold that GSTR 3B is not a return specified under Section 39. Therefore, the ITC in respect of invoices issued during FY 2018-19 can be availed by 20 th October 2019. However, considering the retrospective nature of the amendment, the validity of the credit already availed by the taxpayers post 20 th October 2018 but before filing annual return in respect of invoices issued during the period from July 2017 to March 2018 would be a subject matter of litigation and could be decided by the Courts.
Credit notes and Debit notes for supplies made in FY 2018-19
Because of aforesaid amendment, the reduction of liability in terms of credit note issued for the supply made in FY 2018-19, shall be allowed only before the filing of return for the month of September 2019 by 20 th October 2019. Further, debit notes with respect to the outward supplies whose invoices are raised during the financial year 2018-19, shall be issued upto the date of filing the return for the month of September, so that recipient of supplies can avail the credit in the return for the month of September, 2019, otherwise the credit on such debit note will be lost for the recipient.
(The author is Joint Director, Lakshmikumaran & Sridharan. The views expressed are the author’s own)
This is the second in a three-part series on common problems in GST return filing and assessment.