Important points to be considered before filing GSTR-3B/GSTR-1 for the month of September 2018.
1. Pending Input Tax Credit to be availed before filing GSTR-3B of Sept ’18:
Contents
1. Pending Input Tax Credit to be availed before filing GSTR-3B of Sept ’18:
A. Reconciliation of ITC availed in GSTR-3B with the books:
B. Reconciliation of ITC availed in GSTR-3B with ITC available as per GSTR-2A:
C. ITC available on distribution by ISD:
D. Debit note issued during 2018-19 by vendor for invoices issued in 2017-18:
2. Other important points to be considered before filing GSTR-3B/GSTR-1 of Sept’18:
i. Rectification of error or omission of invoices:
ii. Credit Notes:
3. Other important points:
i. Cross-charging:
ii. Reverse charge liability paid under normal registration on behalf of ISD unit:
Section 16 (4) of Central Goods and Services Tax Act, 2017 provides that the Input Tax Credit (ITC) on the invoices raised during July 2017 to March 2018 can be availed by the registered person on earliest of the following dates:
i. On or before the due date of furnishing the return for the month of September 2018 i.e. 20-10-2018 (unless extended). OR
ii. Before filing of annual return for July 2017 to March 2018.
The format of annual return has not yet been prescribed and thus cannot be filed. Therefore, the last date of availing the ITC on invoices pertaining to the period July 2017 to March 2018 shall be the due date of filing of GSTR-3B for September 2018 i.e. 20-10-2018 (unless extended). Therefore, the company is advised to avail the pending ITC pertaining to invoices raised in July 2017 to March 2018 by the vendor within the due date of filing the return of September 2018. Therefore, all clients are advised that the return in Form GSTR-3B for September 2018 should be filed within the due date i.e. 20th October 2018 (for availement of credit on invoices / debit note of 2017-18) to avoid any action of reversal of credit from the department.
The following activities has to be carried out by the company for each GST registration before filing the GSTR-3B of September 2018 and avail the pending eligible ITC otherwise the ITC on the same shall lapse.
A. Reconciliation of ITC availed in GSTR-3B with the books:
Reconciliation of ITC availed in books and that availed in GSTR-3B. There may be instances where due to human/system error, the ITC has not been availed in GSTR-3B. Such invoices are required to be traced so that the ITC can be availed within the time frame.
B. Reconciliation of ITC availed in GSTR-3B with ITC available as per GSTR-2A:
Presently, there is no requirement to file or verify GSTR 2A return. However, there may be many reasons for difference between credit availed under GSTR-3B & credit appearing under GSTR-2A. For example:
There may be cases where vendor has sent the invoice which the company has not received at all. In such cases, the company is required to follow up with the vendor and get the invoices and then avail ITC within the time prescribed above.
In many cases, ITC on bank charges have not been taken as invoice may not be received from Bank. In such cases, the company is required to follow up with the bank and get the invoices and then avail ITC within the time prescribed above.
There have been instances where GSTIN number was not provided to the vendors initially resulting in issuance of invoice as B2C. In such cases, the company must get the invoices amended from the vendor as B2B before availing the ITC and assure that the vendor rectifies the same in his GSTR-1 not later than GSTR-1 for the month of September’2018.
D. Debit note issued during 2018-19 by vendor for invoices issued in 2017-18:
As per section 16 (4) of Central Goods and Services Tax Act, ITC on debit note issued by vendor during the current year i.e. 2018-19 which is pertaining to invoices raised in 2017-18 has to be availed before due date of filing of annual return OR before due date of filing GSTR-3B for the month of September’18, whichever is earlier. Therefore, the company has to evaluate all the debit notes issued during the period 01-04-2018 to 30-09-2018 pertaining to the original invoices issued during the period 01-07-2017 to 31-03-2018. E.g. ITC on debit note issued by vendor in April’18 against the original invoice pertaining to March’18 has to be availed on or before due date of Sept 2018 return.
2. Other important points to be considered before filing GSTR-3B/GSTR-1 of Sept’18:
i. Rectification of error or omission of invoices:
In case of any errors made while uploading Invoices in GSTR-1, the company can rectify the invoices in GSTR-1 in subsequent months. However, as per section 37, rectification of such invoices can be made before filing GSTR-1 for the month of September OR before filing annual return, whichever is earlier. Similarly, the invoices which have been missed in GSTR-1 for July’17 to March’18 can be uploaded in GSTR-1 of September 2018. Further corrections in GSTR-3B should also be done till the return of September 2018.
ii. Credit Notes:
The credit notes for the period 01-07-2017 to 31-03-2018 have to be issued & uploaded in GSTR-1 before filing annual return OR before filing GSTR-1 for the month of September, whichever is earlier. If such credit notes are not uploaded on or before filing GSTR-1, then the liability cannot be reduced to that extent.
3. Other important points:
i. Cross-charging:
The Head office provides administration/business support services (Tax/HR/Legal/Finance Team) to other units/branches located in different states or different registrations i.e. distinct persons which is considered as supply of services and accordingly GST has to be charged on the same. Therefore, Head office has to cross charge and pay GST on the same (if not done) to all distinct persons at the earliest.
ii. Reverse charge liability paid under normal registration on behalf of ISD unit:
Reverse charge liability cannot be discharged under ISD and therefore the same has to be paid under the normal registration in the state in which ISD is registered.
Thereafter, an invoice has to be raised on ISD as per rule 54 (1A) for common input services so that the same can be distributed to distinct persons at the earliest. It is advisable that the invoice shall be raised on ISD in the month in which ITC is availed under the normal registration.
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