On 28th February 2021, the Government has extended the due date for furnishing the GSTR 9 and GSTR 9C for the FY 2019-20 which is a welcome step by all the sections of the taxpayer society, being the registered persons, trade associations and the Professional bodies.
While finalising the GST Annual return for the respective period, the taxpayer must have encountered with the problem of difference in the figure of Table 8A from GSR 2A. Initially while filing for the FY 2017-18, it has been a technical glitch where the figures have not been matched just because the figure has not been captured in the system and Professionals have furnished the reconciliation of the difference in the optional attachments to justify the same.
But eventually with the time span the nature of the figure has been shifted from the technical glitch to the difference between the ITC availed within the time and the ITC available. To show the figure, this is an extract of the GSTR 9:-
|Description||Integrated Tax||Central Tax||State Tax||Cess|
|(A) ITC as per GSTR 2A|
|(B) ITC as per sum total of table 6(B) and 6(H) above|
|(C) ITC on inward supplies (other than imports and inward supplies liable to RCM but included services received from SEZs) received during 2019-20 but availed during April to September 2020|
|(D) Difference [A-(B+C)]|
In the table 8A it has been elaborated as ITC taken from GSTR 2A that means eventually the Department is taking the 2A as the base to be taken to compare the ITC availed from the Books. But the point that rises is the authenticity of the figure taken in the GSTR 2A. With the GST amnesty scheme introduced till September 2020. Many taxpayers have filed their pending GSTR 3B and GSTR 1 so that they could be out of the paradigm of the non-compliance section. But eventually only 1 side of the coin has been seen as an opportunity.
The taxpayers who has not filed the return now has the opportunity to file their pending GST returns without any late fee and the interest as per the GST Amnesty Scheme which is a welcome step by the Government and one step further towards the Ease of Doing Business. But now 1 thing that has missed the lenses of the people. The pending tax filers can file their returns for the previous periods but do the ITC on them are available to the Recipients??
Lets say Mr. A has sold an item of Rs. 100000/- with Rs. 18000/- GST to Mr. B in the FY 2018-19. Mr. A becomes a return defaulter and do not file their return in the FY 2018-19 but files the pending return under the GST amnesty scheme. Now the said ITC of Rs. 18000/- is visible to Mr. B in their respective GSTR 2A. Now while filing the respective GSTR 9, whether the said ITC will be available to Mr. B. The answer is NO.
The reason for the NO is that the Table 8A is derived from the entries being shown in the GSTR 2A till 31st October 2019. Please note that however the extended date should be 30th September 2020 but the downloaded Table 8A details show the cut off date as 31st October 2019.
Now by reviewing the position we can say that to match the ITC as per Table 8A, the ITC should be reflected in the GSTR 2A by 31st October 2019 irrespective of any circumstances and the ITC being reflected afterwards by filing the GSTR 1 by the return defaulters by availing the GST amnesty scheme.
Some professionals might take the plea that in FY 2018-19, the provision for claiming the ITC is to be ruled by fulfilling the provisions of section 16(4) i.e. goods / services have been delivered, payment has been made within the time limit for the same, Invoice has been issued against the supply of the said goods / services. Then it is the eligible case for availing the ITC.
Also with the introduction and amendment of Rule 36(4) the provision of ITC has been focussed on the GSTR 2A and later on GSTR 2B.
With more and more focus on the revenue collection, the procedural part has been overlooked while implementing the ITC related provisions for the following reasons:-
a. After the return defaulters have filed their respective GST returns, the Recipients are able to see the respective ITC in their GSTR 2A. But while filing their respective GSTR 9 and GSTR 9C, the said ITC is not being reflected in the Table 8A which leads to the -ve figure in the Table 8D i.e. payment to be made on account of ITC excess claimed. The payment for the same ITC which is being reflected in the GSTR 2A but the recipient can not claim as the cut off date is 31st October 2019.
b. The claimants of the ITC can see their ITC in their respective 2A but can not claim the ITC as they have to take the base of Table 8A which leads to the double cash flow on account of the Recipients as the Supplier has filed their respective return and paid the tax to the Government but unfortunately the Recipient can not claim it even after the figure being in their GSTR 2A. The reason being the cut off date of 31st October 2019.
Due to the said reason of this unjustified cut off date, in many cases, the taxpayers have to pay the tax twice for the same ITC which they have paid to the suppliers and the suppliers have paid it to the Government by availing the GST amnesty scheme.
Therefore, in our opinion, the Table 8A figure should be based on the figures being shown in the GSTR 2A till the due date of filing the Annual Return. Also the basis of claiming the ITC should be based on either GSTR 2A at the time of Annual Return or table 8A being updated till date so that there will not be any loss to the taxpayers on account of non availment o the ITC being reflected in the GSTR 2A after the cut off date.