Input tax credit on payment under section 73 (5), Goods and Services Tax - GST

[VINIT SANCHETI]

Kindly advice on the following issue:

Can a taxable person take input credit of tax on amounts paid on the basis of his own ascertainment under Section 73(5) of the CGST Act ?

If so, what is the last date for taking such credit ? (kindly refer to Section 16(4) of the CGST Act ?

Is any penalty leviable under section 73(11) of CGST Act or Section 125 of the CGST Act ?

The tax has to be paid vide Adjusting the amounts in current month GSTR-3B or DRC-03 ?

If Tax is paid vide DR-03, then the input tax credit be taken by declaring in the GSTR-3B in the subsequent month ?

Note: This amount relates to tax on reverse charge not paid earlier by oversight.

Posts / Replies

[KASTURI SETHI]

First of all you are determine the time of supply of services as per Section 13 (3) of CGST Act, 2017 thereafter, remaining queries can be replied.

Section 13 (3) of CGST Act

(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time of supply shall be the earlier of the following dates, namely :-

(a) the date of payment as entered in the books of account of the recipient or the date on which the payment is debited in his bank account, whichever is earlier; or

(b) the date immediately following sixty days from the date of issue of invoice or any other document, by whatever name called, in lieu thereof by the supplier :

Provided that where it is not possible to determine the time of supply under clause (a) or clause (b), the time of supply shall be the date of entry in the books of account of the recipient of supply :

Provided further that in case of supply by associated enterprises, where the supplier of service is located outside India, the time of supply shall be the date of entry in the books of account of the recipient of supply or the date of payment, whichever is earlier.

What is the date of entry of payment entered in your books of accounts ?

[Pavan Mahulkar]

Proviso has been added to Section 16(4)

“Provided that the registered person shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019.”

Thus last date to claim the credit of missed invoice was 20th April 2019..

Insofar your question regarding penalty is concerned..

If the dealer pay the the tax liability as per Section 73 (5) of CGST Act..on his own ascertainment no penalty could be levied..

Infact u/s 73 penalty is waived till the Jurisdictional Officer issue DRC-07..

again penalty is waived up to one month from issue of DRC-07, If the dealer pays in response to notice...

[KASTURI SETHI]

Section 125 is not attracted here.

Section 73 (6) and (8) saves from penalty, if conditions are fulfilled.

It is a period of 30 days and not one month as mentioned in Section 73(8) and (11) of CGST Act

[Pavan Mahulkar]

Yes it not one month but 30 days... Thanks for correcting me Sit..

But Section 73 (8) says within 3o days from issue of DRC-07

And Rule 142(3) says within 30 days from service of notice...?

[KASTURI SETHI]

Yes. I agree with you. Both of your replies are correct. I have just clarified nothing else.

[KASTURI SETHI]

Dear Pavan Madhulkar Ji,

I intend to share one amusing case with you in this forum.

One of my clients (who came late to me) suffered a loss of ₹ 2.50 lakhs because of considering period of one month instead of 30 days. The month involved was of 31 days. He deposited due ST along with interest within in 31 days (one month) instead of 30 days. He was late by one day only which cost him ₹ 2.50 lakhs. No court can exonerate such delay of one day. This information is not only for you but also for other visitors of this site.