Advance Actualization Wrongly shown in ITC instead of Deducting Liability

[Prem Choudhary]

Dear Expert

We are facing issue in prepration of GSTR-9 and 9C for following issues in Fy 2017-18:-

In FY 2017-18, The Company was paying GST on Advances received(On Goods supply) up to 15th Nov 2018, Thereafter amendment was made and no gst was payable on Advances received against supply of Goods. The payment of GST on advances was shown in ITC in GSTR-3B instead of deducting Liability of GST for Advance actualization. However the GSTR-1 is correctly filed with actualization of advances. please also note that Govt. has revenue neutral ' No any short/excess paid of GST' only showing figure in incorrect head.

Please suggest how to correctly shows in GSTR-9 and 9C of Fy 2017-18.

In My view, it can be shown as :-

1. ITC reversal in GSTR-9 vide Table No-7(H1) and Table -9(Deducting payable and ITC utilization) OR
2. Shown advances in Table-4 F (Unadjusted advance) and ITC as usual in GSTR-9 and differences shown as un-reconiled with Books vs Return in GSTR-9C under Table-5 & 6 (with reason) and Table-12 &13 (under diff in come out in unreconciled ITC excess shown in teaxt as reason)

AI Summary

GST treatment of advances: misclassified ITC should be corrected in annual returns and reconciliations with clear disclosure. The issue concerns GST paid on advances being recorded as ITC in GSTR-3B instead of reducing output liability upon advance actualization, while GSTR-1 correctly reflected actualization. For GSTR-9 and GSTR-9C the note proposes either reversing the ITC in annual return tables to align payable and ITC utilisation or reporting advances in the Unadjusted Advances table and explaining the unreconciled ITC excess in GSTR-9C reconciliation tables with reasons, stressing disclosure and reconciliation.