How to claim missed tax invoices having Input Tax Credit in the subsequent months

Recently, a lot of discussion has been going on regarding the claim of the missed tax invoices having input tax credit in them. The possible solutions that the professionals did earlier come to everyone’s mind does not work in the GST scenario as it is evident that the GSTR 3B of any month once filed cannot be revised and regarding the GSTR 2, a return in which the details of the Inward supplies to be given, shall not be notified in the current scenario. So, this leads to the dilemma in the minds of the taxable persons as well as GST practitioners.

So, lets discuss about the possible scenario and their solution in detail:-

Scenario –  DEF co. purchased goods for trading purpose from ABC co. on 05/02/2018, received on 07/02/2018 , Invoice value Rs. 1,18,000/- having GST tax rate @ 18%. Now while finalizing the GSTR 3B for the month of February 2018, the Accountants misses this particular invoice and mailed the data to his Tax consultant without taking into account the invoice in the Books of Accounts. At the time of reconciling the GSTR 2A with GSTR 3B for FY 2017-18, he realized the mistake that he missed the said invoice in the Books of Accounts. Now in this case, how the ITC of the missed invoice can be claimed in the Books of accounts so that the said ITC shall not go waste.

Solution – Firstly, lets find out the eligibility of DEF co. to claim ITC. By virtue of  Section 16(1) of CGST Act, any registered taxable person can claim the Input Tax credit :-

a. goods or services or both are supplied;

b. in the course of furtherance of business;

c. the said amount shall be credited to the electronic credit ledger of such person;

d. subject to the manner prescribed in section 49.

In this case, DEF co. is entitled to claim the ITC of the said invoice by virtue of section 16(1) as the said goods have been used in the course of business.

Secondly, we find out the conditions required for claiming ITC have been fulfilled or not. By virtue of Section 16(2) of CGST, a registered taxable person can claim the ITC if the following conditions are fulfilled:-

a. the taxable person is in the possession of the documents as specified in the Rule 36(1);

– an invoice issued by the supplier of goods or services or both in accordance with provisions of section 31;

– a debit note issued by the supplier in accordance with the provisions of section 34;

– a bill of entry

– an input service distributor invoice or any documents issued by the Input service distributor in accordance with Rule 54(1);

b. he has received the goods or services or both;

c. subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the central government, either in cash or through utilization of input tax credit  admissible in respect of such supply;

d. he has furnished the return under section 39.

In this case, DEF co. has the necessary invoice, received the goods as well as the tax charged has been deposited either in cash or utilized through input tax credit, hence the conditions for claiming the Input tax credit have been fulfilled.

Now, comes the most important issue in this case – the time limit for claiming the ITC of the missed tax invoice, for this we have to analyze the provision of section 16(4) which specifies the 2 dates for the said purpose:-

a.  the due date of furnishing of return for the month of September following the end of the financial year i.e. 20-10-2018;

or

b. the due date of filing the Annual return for FY 2017-18 i.e. 31-12-2018.

DEF co. can avail the Input tax credit in any of the months before September 2018 and hence, complies with the time limit for availing the input tax credit.

Hence, in this case, DEF co. is “Eligible” and can claim the ITC of the missed tax invoice earlier of the following due dates.

This also removes the dilemma in the minds of the taxable persons and GST practitioners regarding the availability of the Input tax credit.