About
Recently, CBIC has issued a clarification to deal with the difference in Input Tax Credit (ITC) availed in Form GSTR-3B as compared to that detailed in Form GSTR-2A for FY 2017–18 and FY 2018–19.
Preview
All regular taxpayers must report the amount of input tax credit(ITC) in form GSTR-3B. Table 4 requires the summary figure of eligible ITC, Ineligible ITC, and ITC reversed during the tax period.
A taxpayer can claim ITC on a provisional basis in GSTR-3B to an extent of 20% of the eligible ITC reported by suppliers in the auto-generated GST return i.e GSTR-2A. Hence, a taxpayer should double-check the GSTR-2A figure before proceeding to file GSTR-3B. Earlier, A taxpayer could have claimed any amount of provisional ITC but, now a taxpayer can only claim up to 20% of the eligible ITC available in the GSTR-2A as provisional ITC. This means that the amount of ITC reported in the form GSTR-3B will be the total of the actual ITC in GSTR-2A and the provisional ITC being 20% of the actual eligible ITC in the GSTR-2A. Hence, matching of the purchase register or expense ledger with the GSTR-2A becomes very important.
Recent Amendment
- In case, where the difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the said FY exceeds Rs 5 lakh, the proper officer shall ask the registered person to produce a certificate for the concerned supplier from the Chartered Accountant (CA) or the Cost Accountant (CMA), certifying that supplies in respect of the said invoices of the supplier have actually been made by the supplier to the said registered person and the tax on such supplies has been paid by the said supplier in his return in FORM GSTR 3B.
- In case, where the difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the said financial year is upto Rs 5 lakh, the proper officer shall ask the claimant to produce a certificate from the concerned supplier to the effect that said supplies have actually been made by him to the said registered person and the tax on said supplies has been paid by the said supplier in his return in FORM GSTR 3B
GSTR 3B vs GSTR 2A
| Parameter | GSTR 2A | GSTR 3B |
| Significance | The GST portal auto-populates GSTR 2A standing on information available from a business’s sellers or counterparties’ returns
It is a read-only document for the recipient, to verify the details uploaded by the seller in GSTR-1.It contains the details of all inward supplies of goods and services i.e., purchases made from GST registered suppliers during a particular tax period. No action can be taken in this because it is just a read-only return. But is referred by the buyers to claim an accurate ITC for every financial year, across multiple tax periods. |
A summary of details of inward and outward supplies is furnished by the registered taxpayers in GST return filing 3B . Taxpayers may file this monthly self-declaration/return with details about all outward supplies made, tax liability, input tax credit asserted, and payable amount of tax. This return is filed by all normal registered GST taxpayers. Details of ITC and sales details must be reconciled with GSTR-1 and GSTR-2B every tax period before filing GSTR-3B. |
| Due Date | The return is filed on a monthly basis on or before 15th of every month. | Monthly – 20th of every month from January 2021 onwards(For taxpayers having an aggregate turnover of more than Rs.5 crore in previous FY)
Quarterly – 22nd or 24th of the month next to the quarter(For taxpayers opted into the QRMP scheme.) |
About ITC?
Input Tax Credit (ITC) simply means the tax already paid by a person at time of purchase of some goods or services which is available as deduction from tax payable.
When you buy a product or hire any service from a registered dealer, you pay taxes on the purchase and on selling, you collect the tax. You calibrate the taxes paid at the time of purchase with the amount of output tax (tax on sales) and balance liability of tax (tax on sales minus tax on purchase) has to be paid to the government. This mechanism is called utilization of ITC.
Let’s take an example- You as a trader purchased goods of Rs. 100 and paid tax of Rs 10 on it. Now the same goods are sold by you at Rs. 150 and a tax of Rs. 15 is collected from the buyer. Now you have to pay Rs.15 to the government for that good but you had already paid Rs.10, so this Rs. 10 is your ITC and it will be allowed as deduction from tax payable and you have to pay net Rs. 5 as tax. You have to report the same while going for GST return filing. Although availment of ITC is subject to certain conditions which is covered below.
Conclusion
The circular has also specifically notified that the above instructions are applicable only to the ongoing proceedings in scrutiny/audit/ investigation, etc. for FY 2017-18 and 2018-19 and not to the completed proceedings. However, these instructions will apply in those cases for FY 2017-18 and 2018-19 where any adjudication or appeal proceedings are still pending.
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