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TMI BlogRELATING TO ITC VIOLATION SEC 16(4) OF CGST ACT 2017X X X X Extracts X X X X X X X X Extracts X X X X ..... My client recieved a notice that you have availed ITC in January 2019, February 2019 and March 2019 in GSTR 3B Returns for FY 2018-19 after 21-10-2019 which is violation of provisions of Section 16(4) of CGST Act 2017 . Actually my client has taken ITC of respective months only and not taken any ITC of F Y 2017-18 but filed after 21-10-2019 with late fees. kindly guide me if there is any violation of provisions of Section 16(4) of CGST Act 2017 . - Reply By Ganeshan Kalyani - The Reply = For FY 18-19, the time limit to claim credit was 20.10.2019 i.e. the due date of filing of GSTR 3B for the month of Sept 19. - Reply By KASTURI SETHI - The Reply = There is a violation of Section 16(4) CGST Act . The department's notice/letter is legally correct. - Reply By GB Rao - The Reply = Dear sir, I agree with the views of experts. There is a violation of provisions of Section 16(4) of CGST Act, 2017 in your case. The last date for availing input tax credit relating to invoices issued during the financial year 2018-19, is the last date of filing of September 2019 GSTR-3B return i.e., 20/10/2019. Hence, you are supposed to avail input tax credit by 20/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10/2019. In your case, you have filed the returns after 21.10.2019 which tantamount to availing input tax credit after 21.10.2019 and hence it is a violation of provisions of Section 16(4) of CGST Act, 2017 . - Reply By Alkesh Jani - The Reply = Shri I agree with the views of our experts, but as per the decision of Gujarat High Court, GSTR-3B is not the return in terms of Section 39 , therefore, the last date to avail credit is before the date of filing of Annual return. Pls refer Issue Id :- 115959. However, the facts and circumstances may be taken into account and of course, legal process is to be followed. Thanks - Reply By KASTURI SETHI - The Reply = GSTR 3B is a return w.e.f. 1.7.17 (after amendment retrospectively). - Reply By GB Rao - The Reply = Dear sir, Notification No.49/2019 Central Tax Dt.9.10.2019 seeks retrospective amendment from 1st July, 2017- where the dealer furnishes return in Form GSTR-3B , he shall not be required to furnish return in Form GSTR-3 . In the said Notification 4. In the said rules, in rule 61 ,- (a) for sub-rule (5), the following sub-rule shall be substituted, with effect from the 1st July, 2017 name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly:- (5) Where the time limit for furnishing of details in FORM GSTR-1 under section 37 or in FORM GSTR-2 under section 38 has been extended, the return specified in sub-section (1) of section 39 shall, in such manner and subject to such conditions as the Commissioner may, by notification, specify, be furnished in FORM GSTR-3B electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner: Provided that where a return in FORM GSTR-3B is required to be furnished by a person referred to in sub-rule (1) then such person shall not be required to furnish the return in FORM GSTR-3 . ; (b) sub-rule (6) shall be omitted with effect from the 1st July, 2017. Earlier, Hon'ble High Court in the case of AAP Co., Vs.UOI = 2019 (7) TMI 401 - GUJARAT HIGH COURT held that the Form GSTR-3B is not a Return, rather a Return specified for Section 39 in Form GSTR-3 . In view of this, the stand of the Department in issuing notices for violation of provisions of Section 16(4) of CGST Act, 2017 is correct in my view. - Reply By Alkesh Jani - The Reply = Shri The one of the ground as discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Hon'ble High Court is required to be taken into account 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. Moreover, Notification No.04/2020-CT dated 10.01.2020 is also vital before arriving to any conclusion. Thanks - Reply By Gaurav Poddar - The Reply = Dear all; In the above case can the credit be disallowed only on the grounds that return is filled after 20.10.19. if yes can any body suggest a way out to avail the credit. - Reply By ramm jainn - The Reply = please suggest any way to come out. Is juridiction having any power to help? If not then this is injustice and harrassment? Late filing with penalty is not a crime? - Reply By KASTURI SETHI - The Reply = I agree with you that tax payers must not suffer loss of ITC which is their substantive right. GST Laws and Common Portal System both are at its infancy stage. It takes years to stabilize. Govt. has made unlimited amendments in GST Acts since its implementation. It is a common cause. So y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ou make a humble request to the GST Council to solve your problem. You may make a representation of your grievances to the Chairperson, GST Council, New Delhi through Trade and Industry Association. Pl. ensure that language should be polite - Reply By ramm jainn - The Reply = My total itc was 16 lakhs as per 18% and turnover was only 70 lakh. My crime was I filed return on 1 november 2019. Government should extend the date else I have no option but to shut down business. This is not the right way to generate revenue. - Reply By KASTURI SETHI - The Reply = I realize your Grievances. I am of the view that you must make all-out efforts. You will be successful. Raise your voice so that it should reach GST Council. If you cannot approach Trade and Industry Association, write a simple letter and email to the Chairperson GST Council. - Reply By GB Rao - The Reply = Dear sir, As rightly advised, you may approach trade association as well as representing CBIC in this matter. There may be many Tax payers facing the similar situation. You better coordinate with your fellow trade who are facing the same problem and fight collectively by filing writ petition with Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le High Court for redressal of your genuine problem. - Reply By KASTURI SETHI - The Reply = The phrase, whichever is earlier mentioned under Section 16(4) of CGST Act has opened Pandora 's box. Laws are framed for welfare of the public and not for snatching fundamental rights. Making representation to Board and GST Council is easier and free of cost and it will yield result faster than Court. - Reply By ramm jainn - The Reply = Dear sir, As advised, can we directly approch high court without appealing to gst department?? As also suggested I have written e maii to [email protected] and cbicmitra. Gstcouncil replied to contact juridiction but juridiction has not given appropriate answer. The question is how can we leave our own itc and If claimed, later pay the same with interest of section 16(4) and interest of section 36(4) . Both interest areinterest are applicable as per juridiction office. - Reply By KASTURI SETHI - The Reply = Show Cause Notice can be challenged direct in High Court. - Reply By ramm jainn - The Reply = Dear sir, I saw a CA lecture on youtube where they stated that many tax firm has given a presentation to cbic and coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cil but govt has not taken any decision.Thats one point. second is, How we can directly approch cbic and council for our presentation and our case discussion? - Reply By Alkesh Jani - The Reply = Dear all, First of all, to my reply dated 04.02.2020, I said that I agree with the views of experts, but when we are having any case law on hand one should give a chance. Now, as the appellant i.e. M/s. AAP Co. = 2019 (7) TMI 401 - GUJARAT HIGH COURT filed a writ against the press release, then a person who is really affected should go for it. As in the case, the Rule 61(5) , as pointed out by our expert, was also part of the writ. Para 12 of the writ application it was submitted that GSTR-3B was in lieu of GSTR-3 , but later on it was omitted and hence GSTR-3B is not in lieu of GSTR-3 . At Para 15 of the writ it was submitted that the decision to add return in form GSTR-3B was taken in the 18th GST Council held on 30th June 2017 on account of the reason stated as 'shorter return for first two months of roll out'. It has not been introduced as a return in substitute of return to be filed in form GSTR-3 . Therefore, it is quite obvious that return in form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GSTR-3B is only a temporary stop gap arrangement till due date of filing return in form GSTR-3 is notified in the GSTN portal. It is therefore, submitted that it is quite obvious that the return to be filed in form GSTR-3 is the final return for taking additional input tax credit as well as discharging of additional tax liabilities after filing of return in form GSTR-3B . It is, therefore, submitted that the last date for availing the input tax credit relating to the invoices issued during the period from July 2017 to March 2018 is the last date for filing of the return in form GSTR-3 and not GSTR-3B . At Para 26, the issue faced by the taxpayer was raised. The Para 30 of the said decision of High is vital and is reproduced below:- 30. 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 S ection 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 F orm 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. Of course, the interpretation given by the Hon ble High Court do matters a lot. Therefore, I am of the view that to file writ for the problem faced is your right and it is court to decide. Thanks - Reply By KASTURI SETHI - The Reply = I agree with Sh.Alkesh Jani Ji. I feel the department is weak on merits. Non-impl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ementation of GST-3 return and confusion about the legal status of GST 3 B would tilt the issue in favour of assessees. The querist must file writ petition with High Court without any delay. Through Association is the best option. - Reply By ramm jainn - The Reply = If it is your itc you have to leave it and if you have claimed excess itc then you have to reverse it with interest. govt has extended almost all due dates in gst but not to take itc for year 2018-19. government using itc of traders as source of revenue machine which is not at all in the rights of public interest. Atleast juridiction should have power to decide the difference between fraud and mistake. - Reply By Tarun jain - The Reply = sir as per rules 18(2) of cgst act said that itc can be takent from one year - Reply By KASTURI SETHI - The Reply = That is under special circumstances. Actually the assessee gets period less than one year. Read again and also compute the time period for availing ITC. - Reply By Tarun jain - The Reply = Sir we have also received notice last date is 10.02.2020 sir ab kya karna chahiye my contact no 7737320209 [email protected] - Reply By KASTURI SETHI - The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reply = Get the extended for 15 days. Do not worry. Heavens will not fall ! You want qualitative reply (full of legal force) and it will consume time. In the meantime you can engage an Advocate or Consultant. Write a simple email for extension on the ground that you need the services of an expert for filing reply to the notice. Pl.ensue letter/email must be polite and humble. I am sure you will get extension. It is a practice that you may not receive any reply but your email or letter will be on record.It is deemed to be granted. - Reply By ramm jainn - The Reply = Join twitter and raise your voice with all practitioner. People are required to move towards court. There has been rucus around practitioners regarding 16(4) . - Reply By Gaurav Poddar - The Reply = Agreed. Voice needs to be raised Lastly came to know that a case is been filed in guj hc.(sources not conf) If any can fetch details Pls do so. - Reply By ramm jainn - The Reply = Need to file petition in each high court. Meanwhile, can anyone suggest the points to reply the notice as department forcing to reply the notice. - Reply By KASTURI SETHI - The Reply = Challenge retrospective amendment where under GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 3B Statement has been converted into a return w.e.f. 1.7.17. Section 16(4) talks of Section 39 for filing return for September or Annual Return, whichever is earlier. Section 39 (1) talks of 'a return' and this very 'a return' includes GSTR 3B Return also which is the basis of taking ITC.. - Reply By Alkesh Jani - The Reply = Shri In this regards, my point of view is that Writ application can be filed on question of law that whether the last date for availing the input tax credit relating to the invoices issued during the period from April 2018 to March 2019 is the last date for filing of the return in form GSTR-3 or GSTR-3B . Thanks - Reply By Bayyareddy DK - The Reply = can anyone suggest the points to reply the notice as department forcing to reply the notice RELATING TO ITC VIOLATION SEC 16(4) OF CGST ACT 2017 . - Reply By Alkesh Jani - The Reply = Shri In your case, the grounds mentioned is to be seen, moreover, what are the facts and how figures are posted and what are the transaction made is also to be observed. Therefore, it is wise to bring out show cause notice and also relevant details of your transaction and return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed. Based on above, our experts can give you proper reply. Thanks - Reply By Tarun jain - The Reply = What is treatment of itc on capital goods can we claim whole itc or 5 percent per quater can remidy available for itc on capital goods claimed after 16(4) - Reply By KASTURI SETHI - The Reply = Section 16(4) of 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 th e 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 . Furnishing of returns. - [(1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, a return , electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such other particulars, in such form and manner, and within such time, as may be prescribed; A combined reading of both reveals that Section 16(4) talks of due date of furnishing return under Section 39 and Section 39 (1) talks of a return every month. It is monthly return GSTR 3B which is the basis of notice and not annual return. Annual return is under Section 44 and still no provision in Common Portal for 18-19 has been made so for . Due date of furnishing annual return for 18-19 cannot be the basis of notice issued for the year 18-19. GSTR 3 return has been omitted and return GSTR 3B which was converted into return from statement retrospectively w.e.f. 1.7.17 is the basis. So retrospective amendment should be challenged by those who have been issued notices for denial of ITC under Section 16(4) of CGST Act , it being time barred. As per dictionary meaning of word 'A' is 'ANY' . 'a return' means any return under Section 39 and not under Section 37 and Section 38 . GSTR 3 B is only monthly GSTR 2 3 both are not in picture. GSTR-1 is monthly as well as quarterly. - Reply By KASTURI SETHI - The Reply = Dear Bayyar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eddy DK, As per the present position of GST law i. e. SECTION 16(4) of CGST Act , the department is legally very very strong. So only quick-fix way-out is By Please to Finance Minister and GST Council. It is cost free and tension free. Other route of High Court/Supreme Court is very costly and time consuming. Do not waste your time, money and energy in preparation of draft to Courts. Make humble representation to Finance Minister through Association as already advised above. You may get justice in Court that will be very very late and meanwhile will pressurise to reverse with interest. Rest is your option. - Reply By Kashish Gupta - The Reply = The experts committee has also initiated debate on ambiguity in section 16(4) - whether it means credit to be availed in credit ledger on portal or in books of account. Further, it is settled principle that current law shall govern the current activities and no benefit can be taken by way of retrospective amendment in law. Since as on 21.10.2019, the air was clear that GSTR-3B is not a return and credit can be claimed till date of furnishing of annual return, in my view, it is a fit case of argue before appellate authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Client should not reverse the credit and shall submit a strong legal reply. - Reply By SUSHILKUMAR GOYAL - The Reply = In view you should approach High Court for relief by filing writ petition on the ground of right to justice, which may override provisions of GST Law. - Reply By KUNAL DESAI - The Reply = There is no such date to be followed. You may always play with books of accounts. Do you need to write anywhere in GSTR-3B that for which month you are claiming ITC? I hope you understand the answer. - Reply By KARISHMA CHAWLA - The Reply = One of my client has also received Notice. Any luck on requests to CBIC or GST Council? - Reply By CA Venkataprasad - The Reply = Dear Sir, Strictly speaking the time limit to avail ITC is expired by 20.10.2019 for FY 2018-19. However, there are various possible grounds which can help to fight against the denial of the legitimate right of ITC for mere delayed filing of the return. We have given the standard reply covering the this issue, which can be accessed at https://hiregange.com/assets/articles/b0d9c-reply-to-16-4-notice.pdf - RELATING TO ITC VIOLATION SEC 16(4) OF CGST ACT 2017 - Query Started By: - kirankumar bonthalak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oti Dated:- 3-2-2020 Goods and Services Tax - GST - Got 39 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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