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ITC Reversal

Mohit lodhi (student) (952 Points)

05 September 2019

Invoice date - august 2017
claimed ITC sept 2017
payment not made till may 2018
neither reversed ITC not reclaimed.
What to do in GSTR-9

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8 Replies

CS Advocate Abhishek Goyal (M Com FCS LLB M-AIMA ) (13706 Points)
Replied 05 September 2019

Reverse in GSTR-9 through DRC-03.

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Mohit lodhi (student) (952 Points)
Replied 05 September 2019

but how could be able to reclaim that ITC...

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 05 September 2019

can claim now ..... as per Proviso to to Section 16 of CGST , you can claim the credit when the payment is made .
hence can claim credit when payment is made.

Mohit lodhi (student) (952 Points)
Replied 05 September 2019

till today I have made all the payments of creditors in 2018 19, Now I need to reverse ITC in GSTR-9 of 2017 18 and re claim the credit in 2019-20 returns...?
If yes,
then why
because department will receive only interest so why I reverse and reclaim ITC..?

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 06 September 2019

Because this act says Kindly read Section. 16 of CGST Act

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Uttam (employee) (814 Points)
Replied 06 September 2019

Ideally you have to reverse in the month of March 2018. Since you have not reversed the same has to be given effect in gstr-9.

If we avoid doing that, in your case the exposure would be interest @ 24% for the amount of reversal to be made multiply by two months as you have made payment in may2018.

During assessment if department enquires then you might have this exposure but it would be resolved by way of litigation only.

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Mohit lodhi (student) (952 Points)
Replied 06 September 2019

If I had made the payment in may 2018 but not reclaim the ITC in may month because i had not reversed the same.
Now can I reverse the ITC in annual return and reclaim it in aug 2019 return..?

Uttam (employee) (814 Points)
Replied 07 September 2019

In my opinion you cannot.

Because GST Act will only support reclaim of ITC only when the assessee have followed the section 16.

Reversal in annual return is an after thought.

Reversing in annual return of FY17-18, making payment in FY18-19 and reclaiming it in FY19-20 will have its own challenges where you might end up loosing reclaim of ITC as it is not warranted by any provisions.

In my opinion, you should explain your hardship to officer and live with the risk of interest exposure.

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