Necessary furnishing of data of ineligible / blocked ITC and reversal thereof in GSTR-3B: Commerce Round


Necessary furnishing of data of ineligible / blocked ITC and reversal thereof in GSTR-3B: Commerce Round

Workplace of the Commissioner of State Tax has issued Commerce Round on Necessary furnishing of appropriate and correct data of ineligible / blocked Enter Tax Credit score and reversal thereof in return in FORM GSTR-3B.

Extract of identical is given under:

1. The method of submitting returns below the GST has been considerably modified over a time frame. One of many important modifications is the tactic for declaration of enter tax credit score (ITC) within the return in Kind GSTR 3B. After the forty third GST Council Assembly, the process for declaring the enter tax credit score within the return in Kind GSTR 3B has been amended, and the identical was notified within the notification referred 1st above. The GST Coverage Wing of the Central Board of Oblique Taxes and Customs (CBIC) had already issued a clarification within the matter, vide the round referred to above.

1.1 The enter tax credit score on the inward taxable provides of products or providers or each to a registered particular person just isn’t eligible below sure circumstances supplied below Part 17(1), 17(2), 17(4) and 17(5) of the Central GST and Kerala State GST Act, 2017 learn with Guidelines 38, 42 and 43 of the Central GST and Kerala GST Guidelines, 2017 (discuss with the Central GST Act and Kerala State GST Act, 2017 for detailed provisions)

1.2 After the current amendments, Desk 4(A) of FORM GSTR 3B pertaining to the particulars of the enter tax credit score obtainable get auto populated from the auto drafted enter tax credit score assertion in FORM GSTR 2B. The utilization of enter tax credit score in the direction of output tax dues in Desk 6 of FORM GSTR 3B additionally get auto populated from the obtainable stability within the digital credit score ledger and in addition from the Desk 4(C) – “Web ITC obtainable” of the FORM GSTR 3B of the respective tax interval.

1.3 Situations have been seen the place the taxpayers are deducting the quantity of ineligible enter tax credit score immediately by enhancing the overall quantity of enter tax credit score auto populated in Desk 4(A) of FORM GSTR 3B. This may end in incorrect settlement of

funds to the State. Additionally, in some circumstances the taxpayers are usually not declaring the “ineligible” enter tax credit, below Desk 4(B) of FORM GSTR 3B leading to fallacious utilization of ineligible credit score. Such taxpayer shall be liable to reverse/pay such enter tax credit score together with curiosity @ 18% every year from the date of utilization until the date of reversal/reimbursement and shall even be penalized.

Accordingly, as a way to guarantee uniformity in return submitting the Commissioner of State Tax, in train of the powers conferred by part 168 of the Kerala State Items and Companies Tax Act, 2017 hereby clarifies the problems detailed hereunder:

2. The process to be adopted for furnishing of data concerning enter tax credit score availed, reversal thereof and ineligible enter tax credit score in Desk 4 of FORM GSTR-3B

2.1 Complete ITC (eligible in addition to ineligible) of the taxpayer can be auto-populated from assertion in FORM GSTR 2B in numerous fields of Desk 4A of FORM GSTR 3B (apart from the ineligible enter tax credit score on account of limitation of time interval as laid out in part 16 (4) of the CGST and KSGST Act, 2017 or the place the recipient of an intra-State provide is situated in a special State than that of place of provide).

2.2 The taxpayer shall not deduct the quantity of ineligible enter tax credit score immediately by enhancing the overall quantity of enter tax credit score auto populated in Desk 4A of FORM GSTR 3B. If the taxpayer has to declare any quantity of ineligible enter tax credit score below any of the supply, they need to strictly adhere to the following directions on this regards.

2.3 Out of the quantities obtainable in Desk 4A of FORM GSTR 3B, if the taxpayer have any ineligible enter tax credit score which is to be reversed on account of Rule 38 (reversal of credit score by a banking firm or a monetary establishment) or Rule 42 (reversal of credit score on inputs and enter providers if the identical is used for non enterprise goal or used for the outward provide of exempted items or providers) or Rule 43 (reversal of credit score on capital items if the identical is used for non enterprise goal or used for the outward provide of exempted items or providers) of the CGST and KGST Guidelines, 2017, because the case could also be, the identical shall be declared in Desk 4 (B) (1) of FORM GSTR 3B. Along with that, if the taxpayer has any enter tax credit score which is blocked as per Part 17(5) of the CGST and KSGST Act, 2017 the identical shall even be declared in Desk 4 (B) (1) of FORM GSTR 3B.

2.4 The taxpayer shall report reversal of ITC which aren’t everlasting in nature and will be reclaimed in future topic to fulfilment of particular circumstances, corresponding to on account of Rule 37 (non-payment of consideration to provider inside 180 days) of CGST and KGST Guidelines, 2017 , Part 16(2)(b) (non receipt of products or providers or each in the identical tax interval by which the bill has been acquired) and Part 16(2)(c) (non cost of tax by the provider) of the CGST and KSGST Act, 2017 in Desk 4 (B) (2) of FORM GSTR 3B. Such enter tax credit score could also be reclaimed within the applicable desk in Desk 4 (A) of FORM GSTR 3B on fulfilment of crucial circumstances. Additional, all such reclaimed enter tax credit score shall even be proven in Desk 4 (D) (1) of FORM GSTR 3B. Desk 4 (B) (2) of FORM GSTR 3B may be utilized by the taxpayer for reversal of any enter tax credit score availed in Desk 4(A) of FORM GSTR 3B wrongly in any earlier tax durations on account of any inadvertent/clerical errors.

2.5 Accordingly, the “Web ITC Obtainable” in Desk 4 (C) of FORM GSTR 3B can be as

per the system (4A – [4B (1) + 4B (2)]) and the identical can be credited to the digital credit score ledger of the taxpayer and in addition in Desk 6 of FORM GSTR 3B to set-off the out put tax dues, if any.

2.6 Enter tax credit score not obtainable, on account of limitation of time interval as laid out in Part 16 (4) of the CGST and KSGST Act, 2017 or the place the recipient of an intra-State provide is situated in a special State / UT than that of place of provide, could also be reported by the taxpayer in Desk 4 D (2) of FORM GSTR 3B. Such particulars can be found in Desk 4 of FORM GSTR-2B.

3. If any taxpayer has availed ineligible or blocked credit and in circumstances the place the time restrict prescribed below Part 39(9) of the Act for rectification by submitting FORM GSTR 3B is over, they could reverse such enter tax credit score on his personal ascertainment by submitting FORM GST DRC-03, electronically on the widespread portal, in accordance with prevailing Acts and Guidelines, to keep away from additional litigations and proceedings corresponding to Present Trigger Notices demanding tax, curiosity, imposition of penalty and so on.

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