Considering the first year of implementation of GST, major challenge is being faced by the Industry Inc in availing GST input tax credit (“ITC”) for the financial year 2017-18 after implementation of GST (i.e. July 2017 to March 2018) and lot of divergent views are floating with respect to the last date till which such ITC can be availed.
Amongst others, most prominent apprehension is that the ITC for the period July 2017 to March 2018, can be claimed on or before due date of filing of the return in Form GSTR-3B for the month of September 2018, which is October 20, 2018. This view is engendered in the light of provisions of Section 16(4) of the CGST Act, 2017 (“the CGST Act”), which draws a time limit to avail ITC for a financial year as the earliest of due date of furnishing return under Section 39 for the month of September following the end of such financial year or furnishing of relevant annual return, whichever is earlier.
So following questions emerging for our GST Charcha:
- Can it really be said that filing of return in Form GSTR-3B for September month will invoke the time lines of Section 16(4) of the CGST Act?
- Whether return in Form GSTR-3B be made equivalent to earlier envisaged monthly return in Form GSTR-3?
Many such questions are evolving, giving rise to multiple angles of legal interpretation of provisions of the GST law.
This article deciphers this issue to critically examine various provisions of the GST Act and Rules made thereunder read with the concept of ITC matching & mis-matching for determination of time period for ITC availment.
Legal provisions under the CGST Act and Rules:
In terms of Section 16(4) of the CGST Act, “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 the CGST Act, deals with the monthly return to be filed electronically, for every calendar month or part thereof, in such form and manner as may be prescribed, of inward and outward supplies of goods or services, ITC availed, tax payable, tax paid and other prescribed particulars, on or before the 20th day of the month succeeding such calendar month or part thereof.
In this regard, Rule 61(1) of the CGST Rules, 2017 (“the CGST Rules”), prescribes Form GSTR-3 as the return to be furnished under Section 39(1) of the CGST Act.
Further, Rule 61(5) provides that where the time limit for furnishing of details in Form GSTR-1 under Section 37 and in FORM GSTR-2 under Section 38 has been extended and the circumstances so warrant, the Commissioner may, by notification, specify the manner and conditions subject to which the return shall be furnished in Form GSTR-3B electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.
It is worthwhile here to note that Rule 61(5) of the CGST Rules was amended vide Notification No. 17/2017 – Central Tax dated July 27, 2017 (w.e.f. July 1, 2017), before which it read as “(5) Where the time limit for furnishing of details in FORM GSTR-1 under section 37 and in FORM GSTR-2 under section 38 has been extended and the circumstances so warrant, return in FORM GSTR-3B, in lieu of FORM GSTR-3, may be furnished in such manner and subject to such conditions as may be notified by the Commissioner.”
Furthermore, first proviso to Rule 69 of the CGST Rules states that where the time limit for furnishing Form GSTR-1 specified under Section 37 and Form GSTR-2 specified under Section 38 has been extended, the date of matching relating to claim of ITC shall also be extended accordingly.
Analyses on last date to avail ITC:
In view of the above discussed provisions, following views are possible in the context of last date to avail ITC for the period from July 2017 to March 2018:
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