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Key Changes to be considered before filing GST Returns of September 2021

In the tax period April 2020 to March 2021, the transactions which consist of the tax period might be revised during furnishing the returns for September 2021 the last date for furnishing the GSTR-3B for September 2021 is 20 or 22 or 24 October 2021. After September 2021 returns there is no other claim of missing the input tax credit (ITC) which is available to get furnished.

The taxpayer might lose the correct claim of any subject ITC that seems in his books of accounts and not claimed till furnishing of September 2021 GSTR 3B return.

Pending ITC of FY 2020-21 can’t be availed after September 2021

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As per section 16(4) of the CGST Act, a registered person shall not be entitled to take the input tax credit in respect of any invoice or debit note for the supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of the financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.

Time Limit for Rectification of errors in GST for FY 2020-21 is September 2021 Return

Section 37 of the CGST Act pertains to the furnishing details of outward supplies. According to Section 37(3), any registered person, who has furnished the details of outward supplies for any tax period and which has remained unmatched under section 42 (Matching, reversal, and reclaim of input tax credit) or section 43 (Matching, reversal and reclaim of reduction in output tax liability), shall, upon discovery of any error or omission therein, rectify such error or omission in such manner as may be prescribed.GST

The taxpayer shall pay the tax and interest, if any, in case there is a short payment of tax on account of such error or omission, in the return to be furnished for such tax period.

However, no rectification of error or omission in respect of the outward supplies’ details furnished shall be allowed after furnishing of the return for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier.

The time limit for Credit notes relating to FY 2020-2021

The time limit for issuing Credit Notes with GST- for 2020-2021 invoices. As per the provision of section 34(2) of CGST Act, 2017. The time limit to issue a Credit note is, “A supplier can issue a credit note against a Tax Invoke on or before 30th September of the next financial year or the date of filing of annual return pertaining to the Tax Invoice whichever is earlier”.

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In other words, the cut-off date to claim such credit note benefit on outward supplies made during 2020-21 will be on or before 30 September 2021.

As per Section 34(2) of the CGST Act any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than September following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier and the tax liability shall be adjusted in such manner as may be prescribed.

Manner of Determination of Input Tax Credit in respect of Inputs or Input Services and Reversal thereof.

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Provisions under Rule 42 of the Central Goods and Services Tax (CGST) Rules, 2017relating to “Manner of Determination of Input Tax Credit (ITC) in respect of Inputs or Input Services and Reversal thereof”. The input tax credit determined shall be calculated finally for the financial year before the due date for furnishing the return for the month of September following the end of the financial year to which such credit relates.

ITC Reversal Due to Non-Payment Within 180 days

Section-16 of the CGST Act, 2017 provides the conditions on the fulfillment of which ITC can be availed by a registered taxable person under GST. However, some restrictions have been placed on the availment of ITC in cases where the buyer or recipient of goods or services fails to make payment of consideration to the supplier. According to the second proviso to section 16(2) of CGST Act, 2017, the recipient of goods or services is required to make payment to the supplier within 180 days from the date of issue of the invoice. However, this condition is not applicable where tax is payable under the reverse charge mechanism.

If the recipient fails to make payment to the supplier of goods or services or both, within 180 days of the date of issuing an invoice, the amount of ITC availed would be added back to his output tax liability. The recipient will also be liable to pay interest thereon. However, it is also provided that if the recipient later makes payment of consideration to the supplier, he can again take ITC after payment of the consideration.

It should also be noted that if the recipient has made a partial payment of consideration, the above reversal will be made on a proportionate basis.

For example, the recipient has made a 70% payout of the total consideration in 180 days, then only 30% of ITC taken will have to be reversed after 180 days.

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