The Government has issued a Press Release on 18.10.2018 at 17:51 IST clarifying its stand for non-extension of the due date for claiming unclaimed ITC for the period July 2017 to March 2018.
The said press release read as follows:
"There appears to be misgivings about the last date for taking Input Tax Credit (ITC) in relation to invoices or debit notes relating to such invoices pertaining to the period from July, 2017 to March, 2018. Such uncertainty seems to stem from the Government’s decision to extend the last date for furnishing of details of outward supplies in FORM GSTR-1 from time to time.
According to Section 16 (4) of the CGST Act, 2017, a registered person shall not be entitled to take ITC 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 (hereinafter referred to as “the said invoices”) or furnishing of the relevant Annual Return, whichever is earlier.
With taxpayers self-assessing and availing ITC through return in FORM GSTR-3B, the last date for availing ITC in relation to the said invoices issued by the corresponding supplier(s) during the period from July, 2017 to March, 2018 is the last date for the filing of such return for the month of September, 2018 i.e. 20th October, 2018.
It is clarified that the furnishing of outward details in FORM GSTR-1 by the corresponding supplier(s) and the facility to view the same in FORM GSTR-2A by the recipient is in the nature of taxpayer facilitation and does not impact the ability of the taxpayer to avail ITC on self-assessment basis in consonance with the provisions of Section 16 of the Act. The apprehension that ITC can be availed only on the basis of reconciliation between FORM GSTR-2A and FORM GSTR-3B conducted before the due date for filing of return in FORM GSTR-3B for the month of September, 2018 is unfounded as the same exercise can be done thereafter also.
It may, however, be noted that the Government has extended the last date for furnishing of return in FORM GSTR-3B for the month of September, 2018 for certain taxpayers who have been recently migrated from erstwhile tax regime to GST regime vide Notification No. 47/2018- Central Tax dated 10th September, 2018. For such taxpayers, the extended date i.e. 31st December, 2018 or the date of filing of Annual Return whichever is earlier will be the last date for availing ITC in relation to the said invoices issued by the corresponding suppliers during the period from July, 2017 to March, 2018.
All the taxpayers are encouraged to take note of the legal requirements and be compliance savvy."
Opinion:
Thus, the Government has straightaway clarified the fact the due date for claiming unclaimed ITC pertaining to the period from July 2017 to March 2018 would not be extended at any cost. In case of those taxpayers who have been recently migrated into GST from erstwhile tax regime, the due date for them is the extended due date of Form GSTR-3B for the month of September 2018.
Therefore, the due date for claiming unclaimed ITC for the Period from July 2017 to March 2018 shall be as prescribed in law i.e. earlier of the due date of Form GSTR-3B for the month of September 2018 (which is 20th October 2018, unless extended) or date of filing of Annual Return.
The press release, in my opinion, has not clarified a few important points such as:
1. Law prescribes Form GSTR-3, not GSTR-3B (it has been introduced vide Notification No. 21/2017 CT dated 08.08.2017). Thus, GSTR-3, for the time being, is suspended and GSTR-3B is not the substitution of GSTR-3.
2. The press release says that the process of reconciliation of Form GSTR-2A & GSTR-3B can be conducted even after 20th October 2018 (due date of GSTR-3B for the month of September 2018, unless extended), which is correct, but it does not clarify the steps to be taken if any unclaimed ITC is discovered after 20th October for the period relating to July 2017 to March 2018 (whether the same can be claimed upon discovery or it will lapse).
The Dilemma:
The Due Dates for filing GSTR-1 for Period July 2017 to September 2018 had been extended till 31.10.2018, but the Press Release indicates that the ITC can be claimed solely on the basis of Invoice issued by Supplier, whether or not GSTR-1 has been filed by the corresponding party. As GSTR-2A is in the nature of facilitation to the taxpayer to claim ITC without impacting the ability to claim such ITC. This is also the time when various notices are being issued by Department for an excess claim of ITC which has happened because of one of the reasons being that several suppliers are not filing GSTR-1. The Annual Return under GST has not been filed yet pertaining to FY 2017-18, otherwise, these would have been reconciled in a timely manner. Further, automatic reconciliation of ITC on a monthly basis is also not happening as GSTR-2 is also temporarily suspended.
Conclusion:
A lot of steps could have been taken by the Government to ease such transitional hardship (as these problems are occurring the first time) but unless and until any such steps are taken we have to abide by the law. As the Press Release ends with the wordings that: 'All the taxpayers are encouraged to take note of the legal requirements and be compliance savvy.'
In the words of Lu Wei: "The internet is a free platform. Everyone has the right to speak. However, compliance with the law is the bottom line that no one should violate."
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