CLAIM OF INPUT TAX CREDIT- GST RETURNS FILED BELATEDLY BY SUPPLIER, Goods and Services Tax - GST

[ANIL KUMAR]

ITC was claimed by M/s. PNT for the purchases made in the month of March 2020 and however M/s. BIL the suppliers in the instance, did not filed their GSTR-3B and GSTR-1 returns belatedly in April 2021. These purchase invoices did not auto-populate in the GSTR-8A table of the GSTR-9 filed by M/s. PNT. Certificate is obtained from M/s. BIL confirming the payment of all due taxes and copies of filed returns GSTR-3B and GSTR-1 relating to all the said invoices to M/s. PNT are provided for evidence of compliance. However, the GST department is insisting reversal of the ITC related to these purchase invoices. M/s. PNT is opposing the same, since the amendment of Section 41(2) for reversal of input credit was made with effect from 1.10.2022 and not applicable to the instant transactions relating to March 2020. Also M/s. PNT is putting forward the Circular No. 183/193 whereby ITC can be allowed based on the total ITC claimed with respect to the Total ITC received as per GSTR-2A and the Circular No. 193 is applicable to the year 2019-20. All conditions as to receipt of goods, payment to supplier within 180 days are fulfilled. seeking comments on the approach to the issue.

Posts / Replies

[ANIL KUMAR]

correction in the query

M/s. BIL the suppliers in the instance, filed their GSTR-3B and GSTR-1 returns belatedly in April 2021.

[Shilpi Jain]

If PNT has claimed the ITC well within the time limit u/s 16(4) then the ITC should not be denied since all the conditions are satisfied. 

It does not matter that the conditions were satisfied after taking credit.

There was no condition in the law that the payment by the supplier has to happen before the recipient avails the credit.

[ANIL KUMAR]

Thanks to you for a positive reply. To add, yes, the M/s. PNT has filed their GSTR 3B returns for the relevant months when the ITC of BIL was claimed, in time, and there was no delay at all in the claims made, to attract section 16(4). only at the time of filing GSTR 9, it was realised that the supplier has delayed their GSTR 3B filings due to corona and paid the same but after the date of Annual return in April 21. 

[Shilpi Jain]

The department has to understand that it cannot unjustly enrich itself at the cost of a genuine assessee.

[KASTURI SETHI]

Taxpayer should not suffer the consequences of supplier's mistake.--------Madhya Pradesh High Court in the case of Agrawal & Brothers Vs. UOI. - 2023 (6) TMI 940 - MADHYA PRADESH HIGH COURT

[ANIL KUMAR]

Thank you Madam Shilpi ji and Kasturi Sethi ji.

[Ganeshan Kalyani]

I agree with the expert's view. You should bring to the notice of the department that supplier filed the return , though late, so you eligibility of credit is fulfilled.

But Circular states that only 10% extra credit would be allowed over and above the credit appearing in GSTR-2A. Department would go by the circular as it binds them. 

[ANIL KUMAR]

Thank you Ganeshan kalyani ji for the positive support. yes, the Circular No. 193 reiterates the Rule 36(4) conditions. The mismatch of input credit related to belatedly filed returns of supplier is within the prescribed limits as per circular.