GST credit of Goods in Transit on 31st March

[Ashish Gupta]

What is the correct method to show for the current year in books of accounts and in GST returns of invoices for which Goods are in transit as of this 31st of March?

[KASTURI SETHI]

To be accounted for in the next financial year for all purposes as the assessee would be in possession of the goods on first April or afterwards.

[Ashish Gupta]

Dear Sir,

In 2B, the seller will show in March which will be needed to reversed in GSTR-3B and credit taken in April. So the same entries will need to be passed into books of accounts, and invoice will need to be entered. So the query?

[Padmanathan KV]

I agree with Ld. Kasthuri sir. The Purchase needs to be accounted in Books of accounts in April only. In the GSTR-3B returns of March 2023, the ITC can be shown in ineligible ITC "Others" in order to tally with GSTR-2B. That will not affect your books of accounts in any way.

The ITC can be availed in GSTR-3B of April 23, when the ITC becomes eligible on the actual receipt of goods.

[KASTURI SETHI]

Perfect reply by Sh. Padmanathan Kollengode Ji. Foolproof interpretation and analysis. Thanks a lot for completing my reply.

AI Summary

GST input tax credit for goods in transit should be claimed when goods are received, with returns adjusted accordingly. Where goods are in transit on 31 March, input tax credit and purchase should be recognised in the next financial year upon actual receipt; invoices appearing in GSTR-2B for March should not prompt availing ITC in March. To reconcile GSTR-3B with GSTR-2B, the recipient may disclose such credits as ineligible ITC 'Others' in March and claim the eligible ITC in April when possession is obtained.