Lapsed ITC can be Claimed till 31 March 2019, Last Date of 30 Sept Challenged

· Gujarat High Court Accepts Petition Challenging GST Law to Restrict ITC Claimed upto Sept 2018 GSTR 3B

Present Position on Last Date for INPUT TAX CREDIT of GST of FY 2017-18

The GST authority had issued a press release dt.18.10.2018 to point out that according to Sec.16(4) CGST Act.,2017, a registered person is not entitled to take input 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 sec 39 for the month of Sept. following the end of the financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier.

There was apprehensions on the above press release and a writ petition was filed in the Gujarat High court contesting the validity and legality of press release.

The court passed order, stating that the above press release is contrary to provisions of the Acts and rules of GST. The court accordingly directed a returnable notice to Central Govt.

We have also reviewed the relevant provisions of GST act and rules and made the following observations.

1. The pertinent sections for availing ITC is sec 16 of the CGST act. The conditions on the basis of ITC can be claimed are

a) Possession of Tax Invoice

b) Receipt of Goods/ Service

c) Payment of Tax

d) Furnishing of Return specified under sec 39 of CGST act.

Sec 39 specifies furnishing of monthly return by 20 the month succeeding such calendar month and showing details of

i) inward and outward supplies of goods and services or both

ii) input tax credit availed

iii) tax payable

iv) tax paid

v) such other particulars as prescribed under GST rules

Rule 61(1) prescribes the format and manner of submission of monthly return. The prescribed Form is GSTR-3

Rule 61(5) states that where the time limit for furnishing of Form GSTR-1 (return of outward supplies, sec-37 of CGST) and Form GSTR-2 ( return of inward supplies, sec-38 of CGST) has been extended the return may shall be furnished in Form GSTR-3B

Thus on the basis of above provisions it can be interpreted that Form GSTR-3B is summarized and adhoc arrangement of GSTR-1 & GSTR-2.

GSTR-3B is not a substitute of monthly return, GSTR-3 as specified as under sec 39 and rule 61(5).

Where monthly return , GSTR-3 has been deferred, the last date take input credit in respect of any invoice or debit note for supply of goods or services or both of the last financial year to which such invoice or debit note can be only on the basis of last date of furnishing of annual return, GSTR-9 i.e. 31.03.2019

The order passed by Gujarat High Court is most likely to pass order on next hearing on 09.01.2019, striking down the notifications and press release instructions on last date to avail the ITC of last financial year.