RELATING TO ITC VIOLATION SEC 16(4) OF CGST ACT 2017

[Asked by Guest]

My client recieved a notice that you have availed ITC in January 2019, February 2019 and March 2019 in GSTR 3B Returns for FY 2018-19 after 21-10-2019 which is violation of provisions of Section 16(4) of CGST Act 2017.

Actually my client has taken ITC of respective months only and not taken any ITC of F Y 2017-18 but filed after 21-10-2019 with late fees.

kindly guide me if there is any violation of provisions of Section 16(4) of CGST Act 2017.

[Tarun jain]

sir as per rules 18(2) of cgst act said that itc can be takent from one year

[KASTURI SETHI]

That is under special circumstances. Actually the assessee gets period less than one year. Read again and also compute the time period for availing ITC.

[Tarun jain]

Sir we have also received notice last date is 10.02.2020 sir ab kya karna chahiye my contact no 7737320209 [email protected]

[KASTURI SETHI]

Get the extended for 15 days. Do not worry. Heavens will not fall ! You want qualitative reply (full of legal force) and it will consume time. In the meantime you can engage an Advocate or Consultant. Write a simple email for extension on the ground that you need the services of an expert for filing reply to the notice. Pl.ensue letter/email must be polite and humble. I am sure you will get extension. It is a practice that you may not receive any reply but your email or letter will be on record.It is deemed to be granted.

[ramm jainn]

Join twitter and raise your voice with all practitioner. People are required to move towards court. There has been rucus around practitioners regarding 16(4).

[Gaurav Poddar]

Agreed. Voice needs to be raised

Lastly came to know that a case is been filed in guj hc.(sources not conf)

If any can fetch details Pls do so.

[ramm jainn]

Need to file petition in each high court. Meanwhile, can anyone suggest the points to reply the notice as department forcing to reply the notice.

[KASTURI SETHI]

Challenge retrospective amendment where under GSTR 3B Statement has been converted into a return w.e.f. 1.7.17. Section 16(4) talks of Section 39 for filing return for September or Annual Return, whichever is earlier. Section 39 (1) talks of 'a return' and this very 'a return' includes GSTR 3B Return also which is the basis of taking ITC..

[Alkesh Jani]

Shri

In this regards, my point of view is that Writ application can be filed on question of law that whether the last date for availing the input tax credit relating to the invoices issued during the period from April 2018 to March 2019 is the last date for filing of the return in form GSTR-3 or GSTR-3B.

Thanks

[Bayyareddy DK]

can anyone suggest the points to reply the notice as department forcing to reply the notice RELATING TO ITC VIOLATION SEC 16(4) OF CGST ACT 2017.

[Alkesh Jani]

Shri

In your case, the grounds mentioned is to be seen, moreover, what are the facts and how figures are posted and what are the transaction made is also to be observed. Therefore, it is wise to bring out show cause notice and also relevant details of your transaction and return filed. Based on above, our experts can give you proper reply.

Thanks

[Tarun jain]

What is treatment of itc on capital goods can we claim whole itc or 5 percent per quater can remidy available for itc on capital goods claimed after 16(4)

[KASTURI SETHI]

Section 16(4) of CGST Act : A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for 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 financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier :

SECTION 39. Furnishing of returns. - [(1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52 shall, for every calendar month or part thereof, furnish, a return, electronically, of inward and outward supplies of goods or services or both, input tax credit availed, tax payable, tax paid and such other particulars, in such form and manner, and within such time, as may be prescribed;

A combined reading of both reveals that Section 16(4) talks of due date of furnishing return under Section 39 and Section 39 (1) talks of a return every month. It is monthly return GSTR 3B which is the basis of notice and not annual return. Annual return is under Section 44 and still no provision in Common Portal for 18-19 has been made so for . Due date of furnishing annual return for 18-19 cannot be the basis of notice issued for the year 18-19. GSTR 3 return has been omitted and return GSTR 3B which was converted into return from statement retrospectively w.e.f. 1.7.17 is the basis.

So retrospective amendment should be challenged by those who have been issued notices for denial of ITC under Section 16(4) of CGST Act, it being time barred.

As per dictionary meaning of word 'A' is 'ANY' . 'a return' means any return under Section 39 and not under Section 37 and Section 38 . GSTR 3 B is only monthly GSTR 2 & 3 both are not in picture. GSTR-1 is monthly as well as quarterly.

[KASTURI SETHI]

Dear Bayyareddy DK, As per the present position of GST law i. e. SECTION 16(4) of CGST Act, the department is legally very very strong. So only quick-fix way-out is "By Please " to Finance Minister and GST Council. It is cost free and tension free. Other route of High Court/Supreme Court is very costly and time consuming. Do not waste your time, money and energy in preparation of draft to Courts. Make humble representation to Finance Minister through Association as already advised above. You may get justice in Court that will be very very late and meanwhile will pressurise to reverse with interest. Rest is your option.

[Kashish Gupta]

The experts committee has also initiated debate on ambiguity in section 16(4) - whether it means credit to be availed in credit ledger on portal or in books of account.

Further, it is settled principle that current law shall govern the current activities and no benefit can be taken by way of retrospective amendment in law. Since as on 21.10.2019, the air was clear that GSTR-3B is not a return and credit can be claimed till date of furnishing of annual return, in my view, it is a fit case of argue before appellate authorities. Client should not reverse the credit and shall submit a strong legal reply.

[SUSHILKUMAR GOYAL]

In view you should approach High Court for relief by filing writ petition on the ground of right to justice, which may override provisions of GST Law.

[KUNAL DESAI]

There is no such date to be followed. You may always play with books of accounts. Do you need to write anywhere in GSTR-3B that for which month you are claiming ITC?

I hope you understand the answer.

[KARISHMA CHAWLA]

One of my client has also received Notice. Any luck on requests to CBIC or GST Council?

[Venkataprasad Pasupuleti]

Dear Sir,

Strictly speaking the time limit to avail ITC is expired by 20.10.2019 for FY 2018-19. However, there are various possible grounds which can help to fight against the denial of the legitimate right of ITC for mere delayed filing of the return. We have given the standard reply covering the this issue, which can be accessed at https://hiregange.com/assets/articles/b0d9c-reply-to-16-4-notice.pdf

AI Summary

Input tax credit time limit: dispute over whether monthly GSTR 3B fixes the cutoff, affecting entitlement to credit.
Section 16(4) restricts the timeframe for availing ITC to the due date for the return under Section 39 for the relevant September or the annual return, and the central dispute is whether Form GSTR 3B qualifies as the Section 39 return. The document records conflicting practitioner views and the Gujarat High Court reasoning questioning GSTR 3B's status, notes retrospective notifications treating GSTR 3B as a return, and outlines two responses to notices: litigate the legal characterization of the return (including writ petitions) or pursue administrative representations to GST policy bodies while compiling transactional evidence to contest departmental notices.