In September 2020, the Central Board of Indirect Taxes and Customs (CBIC) issued a notification to provide relief to taxpayers who had claimed Input Tax Credit (ITC) on the basis of invoices which were not reflected in their Form GSTR-2A for the financial years 2017-18 and 2018-19. The notification allows taxpayers to claim the ITC on a self-declaration basis in their GSTR-3B for September 2020 to March 2021, subject to certain conditions.
1. The taxpayer should have furnished their GSTR-3B and GSTR-1 for the months of September 2020 to March 2021 by the due date.
2. The ITC claimed in GSTR-3B should not exceed the ITC available in GSTR-2A.
3. The taxpayer should have filed their GSTR-3B for the tax period of September 2020 on or before March 31, 2021.
4. The taxpayer should have submitted a statement in Form GST ITC-04 for the period July 2017 to March 2019, by the due date, declaring that the inputs or goods have not been used for any purpose other than job work or outward supply.
It is important to note that this relief is available only for taxpayers who have not availed of the ITC earlier and have furnished their GSTR-3B and GSTR-1 for the specified period by the due date. The relief is not available for cases where there is a mismatch between the ITC claimed in GSTR-3B and the ITC available in GSTR-2A due to other reasons, such as incorrect details in the tax invoices or incorrect filing of returns by the supplier.
The Central Board of Indirect Taxes and Customs (CBIC) had issued a circular in 2019 which provided relief to taxpayers who had claimed input tax credit (ITC) based on unmatched invoices appearing in their GSTR-2A for financial years 2017-18 and 2018-19. The circular allowed the taxpayers to claim such ITC subject to certain conditions and restrictions.
Under the circular, taxpayers were allowed to claim ITC on a provisional basis for unmatched invoices appearing in their GSTR-2A for FYs 2017-18 and 2018-19, up to a maximum of 20% of the eligible ITC available in their GSTR-2A. The balance ITC could be claimed by the taxpayers only after ensuring that the suppliers of such invoices have uploaded the correct details in their GSTR-1 and such details have been reflected in the GSTR-2A of the recipients.
The circular also provided that in cases where the ITC claimed on a provisional basis exceeds the eligible ITC available in the GSTR-2A, the excess ITC would have to be reversed and interest would be payable on such excess ITC.
It is important to note that the relief provided by the circular was only applicable for unmatched invoices appearing in the GSTR-2A for FYs 2017-18 and 2018-19, and not for any subsequent periods. Additionally, the relief was subject to several conditions and restrictions, and taxpayers were required to exercise caution while claiming ITC on a provisional basis.
As of now, there is no specific relief available for ITC claimed for unmatched invoices in GSTR 2A for FYs 2017-18 & 2018-19. However, there have been representations made to the government seeking relief in this regard.
The issue arises when taxpayers claim input tax credit (ITC) based on invoices that have not been uploaded by their suppliers in their GSTR-1 returns. As per the GST law, ITC can only be claimed if the supplier has uploaded the relevant invoice in their GSTR-1 and the same has been reflected in the recipient's GSTR-2A.
Due to the technical glitches and other reasons, many suppliers have not uploaded their invoices in a timely manner, resulting in a mismatch between the ITC claimed in Form GSTR-3B and the ITC available in Form GSTR-2A. In some cases, the mismatch can be substantial, causing hardship to the taxpayers.
In order to address this issue, several industry bodies and trade associations have made representations to the government, seeking a one-time relief for ITC claimed for unmatched invoices in GSTR 2A for FYs 2017-18 & 2018-19. However, as of now, there has been no specific relief granted in this regard.
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