2019 (7) TMI 401 - HC - GST

Time limit for availing Input Tax Credit (ITC) - whether GSTR-3B is a return u/s 39(1) of Central GST Act or State GST Act - Legality and validity of the press release dated 18th October 2018 - 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 u/s 39 for the month of September following the end of financial year or furnishing of the relevant annual return, whichever is earlier - writ-applicant would submit that Section 39(1) of the CGST Act/GGST Act provides that every registered person except few categories of persons shall furnish a monthly return in such form and manner as may be prescribed. HELD THAT - The aforesaid press release is valid and in consonance with Section 16(4) of the CGST Act/GGST Act only if Form GSTR-3B is a return required to be filed under Section 39 of the CGST Act/GGST Act - Section 39(1) of the CGST/GGST Act provides that every taxpayer, except a few special categories of persons, shall furnish a monthly return in such form and manner as may be prescribed. Rule 61 of the CGST Rules/GGST Rules prescribes the form and manner of submission of monthly return. Sub-rule 1 of Rule 61 of the CGST Rules/GGST Rules provides that the return required to be filed in terms of Section 39(1) of the CGST/GGST Act is to be furnished in Form GSTR-3. It would be apposite to state that initially it was decided to have three returns in a month, i.e. return for outward supplies i.e. GSTR-1 in terms of Section 37, return for inward supplies in terms of Section 38, i.e. GSTR-2 and a combined return in Form GSTR-3. However, considering technical glitches in the GSTN portal as well as difficulty faced by the tax payers it was decided to keep filing of GSTR-2 and GSTR-3 in abeyance. Therefore, in order to ease the burden of the taxpayer for some time, it was decided in the 18th GST Council meeting to allow filing of a shorter return in Form GSTR-3B for initial period. It was not introduced as a return in lieu of return required to be filed in Form GSTR-3. The return in Form GSTR-3B is only a temporary stop gap arrangement till due date of filing the return in Form GSTR-3 is notified. Notifications are being issued from time to time extending the due date of filing of the return in Form GST- 3, i.e. return required to be filed under Section 39 of the CGST Act/GGST Act. It was notified vide Notification No.44/2018 Central Tax dated 10th September 2018 that the due date of filing the return under Section 39 of the Act, for the months of July 2017 to March 2019 shall be subsequently notified in the Official Gazette. The impugned press release dated 18th October 2018 could be said to be illegal to the extent that its para-3 purports to clarify that the last date for availing input tax credit relating to the invoices issued during the period from July 2017 to March 2018 is the last date for the filing of return in Form GSTR-3B - the said clarification could be said to be contrary to Section 16(4) of the CGST Act/GGST Act read with Section 39(1) of the CGST Act/GGST Act read with Rule 61 of the CGST Rules/GGST Rules. Application disposed off.

Summary

Issues Involved:
1. Legality and validity of the press release dated 18.10.2018.
2. Interpretation of Section 16(4) and Section 39 of the CGST Act/GGST Act.
3. Applicability of Form GSTR-3B as a return under Section 39 of the CGST Act/GGST Act.
4. Impact of Rule 61 of the CGST Rules/GGST Rules on the filing of returns.

Issue-wise Detailed Analysis:

1. Legality and Validity of the Press Release Dated 18.10.2018:
The writ-applicant challenged the press release dated 18.10.2018, specifically para 3, which clarified that the last date for availing input tax credit (ITC) relating to invoices issued from July 2017 to March 2018 is the last date for filing the return in Form GSTR-3B. The applicant argued that this clarification is contrary to Section 16(4) of the CGST Act/GGST Act, which provides that the last date for taking ITC is the due date of furnishing the return under Section 39 for the month of September following the end of the financial year or the relevant annual return, whichever is earlier.

2. Interpretation of Section 16(4) and Section 39 of the CGST Act/GGST Act:
Section 16(4) of the CGST Act/GGST Act specifies that 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 the return under Section 39 for the month of September following the end of the financial year or furnishing of the relevant annual return, whichever is earlier. The writ-applicant contended that the return under Section 39 is Form GSTR-3, not GSTR-3B, as per Rule 61 of the CGST Rules/GGST Rules.

3. Applicability of Form GSTR-3B as a Return Under Section 39 of the CGST Act/GGST Act:
The respondents argued that Form GSTR-3B is a return under Section 39 of the CGST Act/GGST Act, citing Rule 61(5) which allows the Commissioner to specify the manner and conditions under which the return shall be furnished in Form GSTR-3B. The respondents maintained that the impugned press release correctly stated the last date for availing ITC, aligning with Section 16(4) of the CGST Act/GGST Act.

4. Impact of Rule 61 of the CGST Rules/GGST Rules on the Filing of Returns:
Rule 61(1) of the CGST Rules/GGST Rules mandates that the return under Section 39 should be furnished in Form GSTR-3. Initially, Form GSTR-3B was introduced as a temporary measure due to technical issues with the GSTN portal. The government later amended Rule 61(5) to clarify that Form GSTR-3B is not in lieu of Form GSTR-3. The court noted that the impugned press release's clarification was contrary to Section 16(4) of the CGST Act/GGST Act read with Section 39(1) and Rule 61 of the CGST Rules/GGST Rules.

Conclusion:
The court concluded that the impugned press release dated 18.10.2018 was illegal to the extent that it clarified the last date for availing ITC as the last date for filing the return in Form GSTR-3B. This clarification was found to be contrary to the statutory provisions of the CGST Act/GGST Act and the associated rules. The writ-application was disposed of accordingly.