GST UPDATE No 287 ON PRACTICAL DIFFICULTIES IN AMENDED GSTR-3B PART-2

The new format of GSTR-3B has been made applicable for the return filed for the month of August, 2022. In our earlier update, we have already highlighted some of the practical issues that are being faced by the assessees as regards presentation of data in the new format of GSTR-3B. In the present update, we seek to point out various other practical difficulties being faced by the assessees while filing their GSTR-3B in the new format.
We hereby discuss the various practical issues of presentation being faced by the assessees as follows:-
1. Treatment of rectification of invoice by the supplier which was wrongly reflected in GSTR-2B as it was not pertaining to the assessee:- At times, it happens that the supplier inadvertently uploads invoice in GSTR-1 under wrong assessee/GSTIN which results in reflection of invoice in the GSTR-2B of the wrong recipient. The reflection as regards invoice reflected in GSTR-2B but not
pertaining to the recipient has been dealt with in our earlier update. It is reiterated that the said ITC will be reflected in serial no. 4(B)(2) of the GSTR-3B. Now, the question arises is what would be the presentation when the supplier rectifies the mistake by amending the GSTR-1 wherein the taxable value and tax amount in the said invoice is amended as Zero. In such a scenario, it is being observed that the figure of all other ITC in serial no. 4(A)(5) of the GSTR-3B is auto-populated with reduced ITC. For example- invoice involving tax amount of Rs. 18,000/- was being wrongly reflected in the GSTR-2B of the recipient. Thereafter, the supplier amended the tax amount of the said invoice as zero due to which the auto populated ITC in table 4(A)(5) is being reflected with lesser amount by Rs. 18,000/-. The assessee will have to add back the amount of Rs. 18,000/- in serial no. 4(A)(5) as the said wrongly reflected ITC of Rs. 18,000/- has already been reversed by them under serial no. 4(B)(2) of the GSTR-3B filed for the prior period. This action will lead to deviation with the figure auto-populated in serial no. 4(A)(5) of the GSTR-3B.
2. ITC not available due to restriction contained in the Rate Notification:- It is submitted that the GST rate for certain goods or services is subject to the condition that the input tax credit shall not be availed by the supplier. For example- in case of restaurant services, GST rate of 5% is applicable subject to the condition of non availment of input tax credit. Now, the question arises is how to reflect the input tax credit which is being auto-populated in GSTR-2B of the restaurant supplier. The input tax credit will be auto-populated in the serial no. 4(A)(5) of the GSTR-3B. Now, the question arises is whether the reversal of said input tax credit will be reflected in table 4(B)(1) or 4(B)(2) of the GSTR-3B. The serial no. 4(B)(1) pertains to credit as per Rule 38, 42 and 43 of the CGST Rules and section 17(5) of the CGST Act, 2017. It is worth noting that the said input tax credit is not restricted under section 17(5) or any of the specified Rules so serial no. 4(B)(1) is not appropriate head for reflection of such ITC. Moreover, ITC at serial no. 4(B)(2) under the category “others” has been interpreted to mean the ITC which is to be re-claimed in future such as that pertaining to goods in transit or non-payment of consideration to the supplier of
goods within a period of 180 days from the date of issuance of invoice. It is submitted that as the input tax credit restricted under rate notification is not to be re-claimed in future, reflection of such credit under the serial no. 4(B)(2) of GSTR-3B is not appropriate. However, as there is no other option available for reflection of such input tax credit, the assessees will have to report the said ITC under serial no. 4(B)(2) of the new format. This will resultantly lead to raising of query by the department as the re-claimed amount of credit under serial no. 4(D)(1) would not tally with the figure reported in serial no. 4(B)(2) of the GSTR-3B.
It is hoped that the government issues suitable clarification to resolve various presentational disputes at the earliest possible so that proper compliance of filing GSTR-3B in the new format is being done by the assessee.

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GST UPDATE No 287 ON PRACTICAL DIFFICULTIES IN AMENDED GSTR-3B PART-2

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