Availment of ITC under GST
Q.1 When the your supplier has NOT filed GSTR – 1 for the MONTH within DUE DATE?
Impact on Recipient i.e YOU:
[Section 16(2)(aa) with Rule 36(4) ] –
We Cannot avail ITC on the invoice issued by the respective supplier as he has not uploaded his GSTR -1 BY 11TH day from end of month
– IF he would have uploaded GSTR -1 by 11th then It would have appear in our GSTR 2B of that month
– If he has uploaded GSTR -1 after 11th then it will appear in next month GSTR 2B so your right to avail ITC will postpone to next month
– This rule keeps check on condition that Your right to avail ITC is restricted to GSTR -2B
For example –
– You purchased goods having invoice date 16-12-2022 but Your supplier has not uploaded GSTR-1 OF DEC MONTH till 11-1- 2023 then you cannot avail ITC in DECEMBER GSTR 3B
– Now suppose he has filed GSTR-1 on 14-1-2023 , then It will appear in GSTR 2B of JANUARY-2023 and you will be able to avail this ITC in January -2023 GSTR 3B ( even if invoice date is of December 2022)
– So your ITC availment is depend on GSTR 2B
Action to take
> Make accounting all Purchase invoices the way you used to do. Even Send us GSTR 3B same way after 14th of the month
> We will send you GSTR 2B on 14th of each month . So make sure to check Purchase & GSTR 2B and claim ITC only as per invoice appearing in 2B. (Call the party whose INVOICES are NOT showing in GSTR 2B and ask the reason. And talk about the loss we will suffer due to this.)
> If any invoices are not appearing in 2B , then MAKE EXCELS RECO SHEET – ALREADY SHARED FORMAT
> So this might create question in your mind that if We cant avail ITC for invoice not appearing in 2B then there will be require to make payment from OWN WORKING CAPITAL
> To safeguard such situation, here is Golden advise for you – ONE SIMPLE RULE IS THAT Dont pay GST portion to your supplier UNLESS AND UNTILL IT APPEARS IN GSTR 2B. . And it will save your working capital
>Whenever ITC appear in GSTR 2B , CLAIM ITC in return and also make payment of GST portion to your supplier
> So always wait for 14th. Check 2B and take decision
Q.2 When the Supplier has NOT filed GSTR – 3B for the given month?
Impact on Recipient i.e YOU:
[Section 16(2)(C) read with Rule 37A]
– You Can avail ITC on provisional basis based on the appearance of the invoice in GSTR – 2B however, Finality of ITC availability is decided only and only if he has filed his GSTR -3B by 30 Sept of the next FY
– in case of the supplier’s failure to file GSTR – 3B by the above date, the recipient shall reverse the ITC in GSTR – 3B on or before 30 Nov of the next FY or else interest shall be payable u/s 50
– Recipient can re-avail the ITC once the supplier files his GSTR – 3B
– This rule checks condition that Your supplier must have paid tax to government
For example –
– You purchased goods having invoice date 16-3-2023 but your supplier has not filed GSTR 3B of MARCH 2023 till 30-9-2023 then your ITC availment is in problem. AND you have to reverse this ITC with INTEREST before 30-11-2023
Action to take
>When we sent yearly GSTR 2A , You make sure that Your all purchase invoice appear in GSTR 2A as well as Your supplier has filed GSTR 3B also
Q.3 When the tax payable declared in GSTR – 1 is lower than the tax liability discharged in GSTR – 3B by your supplier?
Impact on Recipient i.e YOU:
(Section 16(2)(C) and Section 16(2)(aa)]
– Your right to avail ITC is restricted to the amount of tax appearing in GSTR – 2B
For example –
– Your supplier has sent you invoice having 100000 and 18% IGST i.e 18000 tax But he uploaded invoice with Rs. 10000 and tax RS. 1800
– In above example , the original invoice is of 16-5-2022 but he amends in August GSTR -1 So , You can avail 16200 IGST differential IGST in August GTSR 3B
Action to take
– You avail ITC is restricted to the amount of tax appearing in GSTR – 2B in the said month
– You can convey your supplier about mismatch in invoice and 2B . When he will amend his GSTR-1 in that month you can avail differential ITC.