GST UPDATE ON FILING OF ITC-04

GST UPDATE ON FILING OF ITC-04
We submit that the due date for filing of ITC-04 is Oct 25, 2017. We further submit that GST ITC-04 is the quarterly return for submitting the details of goods sent to job worker and received back therefrom or sent to another job worker. This has been prescribed in section 143 of CGST Act, 2017 read with rule 45 of CGST Rules, 2017. However, the offline utility for ITC-04 was made available on the common portal in the evening on 23.10.2017 whereas the online facility was made available on the common portal only on 25.10.2017, being the due date of filing ITC-04. In our opinion, the due date of filing ITC-04 shall be extended so that the assessees are saved from the glitches of haphazard filing of return at the last moment. Not only this, appropriate notification should be issued for waiving initiation of any penal action against the assessees for delay in filing ITC-04 for the quarter July, 2017 to September, 2017.

Apart from the request of extension of the time limit for filing ITC-04 for the quarter July, 2017 to September, 2017, we also wish to highlight certain anomalies in the details required to be submitted in ITC-04 by the job-workers as follows:-
1. The offline utility does not allows to give reference of job work challans issued prior to 01.07.2017 as the requirement to file ITC-04 is only for goods sent to job-work during the period from 01.07.2017 to 30.09.2017. However, there is possibility that the goods sent for job work prior to 01.07.2017 are received back in July, 2017 to September, 2017 or are being sent to another job worker in July, 2017 to September, 2017. In such a situation, the assessee is unable to reflect the details of receipt of job-worked goods or the details of goods sent to another job-worker in the ITC-04 filed by them. A suitable clarification in this regard should be issued as to whether the details of goods sent prior to 01.07.2017 and received subsequently in the GST regime are to be reported in ITC-04 or not.
2. The offline utility also has discrepancy in mentioning the original challan date. The excel sheet depicting details of goods sent for job-work by manufacturer to the job worker mentions the month of July in the challan dates whereas the sheet pertaining to the details of goods received from job worker or sent out from business place of job work mentions the month of August in the original challan date column. The excel sheet pertaining to goods sent from job worker to manufacturer mentions ‘original challan date’ but the information thereon mentions the month of August which is totally wrong. A suitable clarification as regards the meaning of ‘original challan date’ in the excel sheet pertaining to goods sent from job worker to manufacturer should be issued in order to resolve the confusion.
3. There is also no mechanism of reporting in cases where 5 different inputs are sent to job worker which are being used in the manufacture of job-worked goods. To illustrate, if 5 inputs being A, B, C, D and E are being sent to job-worker for manufacturing a product being X, then there is no mechanism for reporting the details of inputs contained in the job-worked goods. It is possible that different proportion of inputs is being used for manufacturing product X and it is also possible that the job-worked goods are received back in lots. Say for example, if 50 Kgs of each inputs is being sent to job-worker to manufacture 75 Kgs of finished product being X, and if the finished products are being received in the lots of 25 Kgs by the principal manufacturer. In such a situation, the mechanism of reporting the goods sent to job-worker and that received back is not at all clear and it is not understandable as to how to report such transactions in ITC-04.
4. There is also no mechanism of reporting cases where a particular quantity of inputs is being sent to job-worker for job work and the job-worked goods are being received back in installments by the principal manufacturer. Say for example, if 100 Kgs of inputs are sent to job worker and the job-worked goods are received in the lots of 20 Kgs. In such a situation, whether reference of original challan is to be given multiple times in the excel sheet pertaining to details of goods received back from the job-worker? A suitable clarification should be issued in this regard for reporting of goods received from job-worker in installments.
5. There is also no clarity as regards the value to be shown in the details of goods received back from job-worker. There is no method to ascertain the value of job work goods since these are not being sold. It might be possible that these job work goods are further used in manufacture of final product. Hence, a suitable clarification should also be issued in this regard.

We have pointed out the practical problems being faced by the assessees in reflecting the details of goods sent to job-worker and received back from the job-worker. We hope that suitable clarifications regarding technical problems being faced in reporting of ITC-04 are issued at the earliest possible.

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GST UPDATE ON FILING OF ITC-04

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