GST UPDATE ON ANNUAL RETURN COMPLIANCE-PART-5

GST UPDATE ON ANNUAL RETURN COMPLIANCE-PART-5

In earlier update, we discussed about the practical difficulties encountered with respect to transactions and input tax credit pertaining to reverse charge mechanism. In the present update, we wish to discuss the clarifications issued by the recent Press Release dated 4.6.2019 which seeks to resolve various doubts prevailing in the minds of assessee.

We had mentioned in our earlier updates while discussing the change in method of cross-utilisation of input tax credit that the change in law would not have any effect unless and until the common portal of GST supports the change as the online portal has precedence over law in the GST regime. Similarly, although the government has allowed assessees to avail the input tax credit for the financial year 2017-18upto the due date of filing return for the month of March, 2019 vide Removal of Difficulty Order No. 02/2018-Central Tax dated 31.12.2018, but the online utility mentions the period of credit availment as “April to September, 2018” in serial no. 8(C). Consequently, there was doubt in the minds of assessee that whether the input tax credit availed in the returns filed during the period October, 2018 to March, 2018 is to be reported in the said serial no. 8(C) or not? The Press Release has clarified in point no. (b) that input tax credit on inward supplies shall be declared from April, 2018 to March, 2019 in table 8C of Form GSTR-9. This clarification indicates that the Removal of Difficulty Order is to be followed irrespective of the format of GSTR-9 available online on the common portal which is a huge sigh of relief to the assessees.

The point no. (d) of the Press Release confirms our view given in our GST Update on Annual Return Compliance Part-1 that although the Instructions to the format of Annual Return makes reference of contents to be taken from GSTR-1 but in reality, the tax paying return being GSTR-3B is required to be given precedence. Therefore, the year in which tax has been paid in GSTR-3B will be taken as the basis of presentation of figures in the annual return.

Another important clarification has been given in point no. (g) according to which if IGST has been paid at the time of import of goods but has been availed in the return of April, 2018 to March, 2019 is required to be reflected in table 6(E) of GSTR-9 itself without the need of bifurcating the same as credit of previous financial year availed in subsequent financial year.

Lastly, we wish to bring out the contradiction in the clarification given in point no. (e) and point no. (h) of the Press Release. According to point no. (e), any outward supply that was not declared by the assessee in Form GSTR-1 or GSTR-3B shall be declared in Part II of Form GSTR-9 and thereafter, such additional liability will be reflected by the difference between the “tax payable” and “paid through cash” in serial no. 9 of Part IV of the annual return. The additional tax payable shall be paid through DRC-03. This is one method of presentation of additional liability not reported in GSTR-1 or GSTR-3B till date discussed in the Press Release. However, in point no. (h), it is simply stated that payments made through Form DRC-03 for any supplies relating to the period between July, 2017 to March, 2018 will not be accounted for in Form GSTR-9 but shall be reported during reconciliation in Form GSTR-9C. The Press Release does not indicate that the assessee has option to follow either point no. (e) or point no. (h). One may interpret that point no. (e) is to be followed for assessees filing annual return and having turnover upto Rs. 2 Crores who are not liable to submit reconciliation statement while point no. (h) is to be followed for assessees filing annual return along with reconciliation statement. However, the Press Release is clarifications for filing of Annual Return. However, both the points are merely different presentations for additional liability not declared in returns filed by the assessee but clarity in this aspect is needed from the government as following point no. (h) may attract the allegation of improper presentation of data in annual return.

Comments

GST UPDATE ON ANNUAL RETURN COMPLIANCE-PART-5

Post a Comment

Query