Under GST, apart from the filing of regular returns, for many other compliances, the due date is prescribed. Said due dates are very stringent. If it is not followed, then Taxpayer may be required to bear the loss in lakhs.
It is observed that for said compliance of F.Y. 2017-18, many taxpayers and professionals have not given enough attention, and therefore, panic situations arose, and many representations were made.
For only some of them, the government has extended the due date. In this article, we will be discussing what all-important compliance, you Taxpayer and professional should do by September return for the last Financial Year. This helps to reduce any tax credit losses, an adjustment in liabilities, and proper filing of returns.
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In order to avoid the same situation like of F.Y. 2017-18, Taxpayer should ensure 100% compliance of below compliance in September Return:
LAST CHANCE TO TAKE PENDING ITC OF LAST FINANCIAL YEAR:
Legal Provision: Sec 16(4): 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
Analysis: As per the above provisions, all pending Input Tax Credit of F.Y. 2018-19 is to be availed by the due date of Return u/s 39 for September 2029. In order to identify by such ITC, reconciliation of purchase register with GSTR 2A is of utmost warranted.
Based on reconciliation, one can identify ITC on Missed ITC on Purchased, Telephone Expenses, Travelling Expenses, Bank Charges, etc.
Therefore all such pending ITC of Last financial year is to be availed by the due date of GSTR 3B without waiting for any extension. Last year, the extension was provided by Removal of Difficulty order, but it was subjective to some additional condition.
TIME LIMIT FOR ISSUANCE OF CREDIT NOTE/ADJUSTMENT FOR REDUCING IN OUTPUT TAX LIABILITY:
Legal Provision: Sec 34(2) : Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in return for the month during which such credit note has been issued but not later than September following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed:
Provided that no reduction in an output tax liability of the supplier shall be permitted if the incidence of tax and interest on such supply has been passed on to any other person
Analysis: For any sale undertaken last year, if any credit is issued or to be issued, the same is required to be disclosed, maximum by Return of September month. Afterward, any adjustment is GST liability due to credit note is not allowed if credit note is issued or declared in returns after September month for the last financial year.
TIME LIMIT FOR AMENDMENT OF SALES DETAILS IN GSTR 1:
Legal Provision: Sec 37(3) Provided that no rectification of error or omission in respect of the details furnished under sub-section (1) shall be allowed after furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier
Analysis: Any correction in sale invoices uploaded in GSTR of last financial year, can be done maximum by this September month return due date. Normally, the mistake is observed in GSTR 1:
- Incorrect GSTIN of Customer
- Incorrect Taxable Value
- Incorrect Tax Rate
- Incorrect Invoice No / Date
If the customer is not able to see ITC, then the supplier is required to make the required correction in the invoice uploaded in GSTR 1. The last date for any of the above correction in Sale details upload of last financial year is September month return. Afterward, neither law nor GSTIN system allows for any correction, which directly impacts supplier relation with customers
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AMENDMENT IN GSTR 3B RETURN:
Legal Provision: Sec 39(9): Subject to the provisions of sections 37 and 38, if any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed, subject to payment of interest under this Act:
Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier
Analysis: Like amendment in GSTR 1, any amendment in GSTR 3B, with respect to details furnished earlier in the last financial year, can be done maximum by September month return. This is a very important provision and ignored because of:
- Circular No 26/26/2017 GST dated 29th Dec 2017
- Decision of Gujarat high court that, GSTR 3B does not return, in the case of AAP & Company, Chartered Accountants v/s Union of India
However, in our view, said circular hold goods upto September month, following the financial year only, and it will be a risk to follow the decision of the high court unless we have the decision of the supreme court.
Therefore Taxpayer should ensure to adjustment in GSTR 3B with respect to the transaction of the last financial year by September month only.
THE TIME LIMIT FOR CORRECTION IN RETURN FURNISHED BY E-COMMERCE OPERATOR – GSTR 8:
Legal Provision: Sec 52(6) If any operator after furnishing a statement under sub-section (4) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the statement to be furnished for the month during which such omission or incorrect particulars are noticed, subject to payment of interest, as specified in sub-section (1) of section 50:
Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of statement for the month of September following the end of the financial year or the actual date of furnishing of the relevant annual statement, whichever is earlier.
Analysis: For any correction/rectification, in any details furnished by E-Commerce Operator in its Return – GSTR 8 of last financial year, it can be done by September months. All E-commerce operators should take care of this provision.
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YEARLY ITC REVERSAL CALCULATION IN CASE OF TAXPAYER UNDERTAKING TAXABLE AND EXEMPTED SUPPLY:
Legal Provision: Rule 42(2) - Except in case of supply of services covered by clause (b) of paragraph 5 of the Schedule II of the Act, the input tax credit]48 determined under sub-rule (1) shall be calculated finally for the financial year before the due date for furnishing of the return for the month of September following the end of the financial year to which such credit relates, in the manner specified in the said sub-rule and
(a) where the aggregate of the amounts calculated finally in respect of ‘D1’ and ‘D2’ exceeds the aggregate of the amounts determined under sub-rule (1) in respect of ‘D1’ and ‘D2’, such excess shall be [reversed by the registered person in FORM GSTR-3B or through FORM GST DRC-03]49 in the month not later than the month of September following the end of the financial year to which such credit relates and the said person shall be liable to pay interest on the said excess amount at the rate specified in sub-section (1) of section 50 for the period starting from the first day of April of the succeeding financial year till the date of payment; or
(b) where the aggregate of the amounts determined under sub-rule (1) in respect of ‘D1’ and ‘D2’ exceeds the aggregate of the amounts calculated finally in respect of ‘D1’ and ‘D2’, such excess amount shall be claimed as credit by the registered person in his return for a month not later than the month of September following the end of the financial year to which such credit relates.
Analysis: As per Sec 17(1) / Sec 17(2) of CGST Act 2017, read with Rule 42 of CGST Rules 2017, Taxpayer who is carrying out Taxable and Exempted supplies, required to do ITC reversal working as per prescribed formula on a monthly basis. However, as per Rule 42(2) of CGST Rules 2017, the same working is again required to be done on an annual basis, and any excess/short reversal of ITC is required to be given in treatment, maximum by September month return.
September month GST Return is most crucial under GST. It is return, which is the last chance for above important compliance, other than regular GST Return filing. Therefore Taxpayer should file a September month return with proper care. For any clarification, you may contact the author on info@gst-at.com.
This article is only for educational purposes. This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. We can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication