Claiming of GST Shown as Ineligible ITC in GSTR 3B

[Kalpesh Shah]

Respected Seniors & Expers,

Facts of the Case :

One of my client is builder/developer. He is undertaking construction of Flats/shops which are covered under the GST scheme of 1% / 5% and not eligible for Set off of Input GST.

He is also Undertaking Contract work in the same firm. Which eligible for Set off.

While filing GSTR 3B, his staff has shown Eligible ITC wrongly as Ineligible ITC and filed GSTR 3B.

Querry

1. Can we claim eligible ITC wrongly shown as Ineligible GST in future GSTR 3B to set off against GST liability of Contract income ?

2. What documents to be prepared and kept, in case department wants clarification ?

Thank you in Advance

[Raam Srinivasan Swaminathan Kalpathi]

Two tasks can be undertaken, viz.

1)  Inform the jurisdictional Superintendent on the inadvertent erratum, explaining in detail with evidentiary material, with a request to allow the ITC availed although reported under ineligible ITC.

2)  Ensure that the correct numbers are populated in GSTR-9/9C.  Please remember R-9/9C is the final chance to correct / amend any bloomers made in the monthly returns.

Thanks

[KASTURI SETHI]

(i) It is a human/typographical error. It is rectifiable. Case laws are available on human error as well as typographical error. Inform the jurisdictional GST Range Officer in writing with case laws. This can be rectified without issuance of show cause notice with permission from the officers of Common Portal. System. Be pro-active.

(ii) Books of account (statutory records).

[Amit Agrawal]

Section 39 (9) of the CGST Act, 2017 reads as follows:

"(9) ¹¹[Where] any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars ^[5] in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed, subject to payment of interest under this Act:

Provided that no such rectification of any omission or incorrect particulars shall be allowed after ¹²[the thirtieth day of November] following ^[6] the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier."

[Amit Agrawal]

If Dept. denies you  the re-credit using above provisions on the ground that 'Reversal in ITC u/s 17(5) is 'permanent / absolute in nature' as per Point No. B (read with Point No. C) under Para 4.3 of Circular 170/02/2022-GST, tax-payer should be ready to defend himself judicially on the ground that corrective action permitted under law (i.e. Section 39(9)) cannot be denied by Dept. using 'a circular' (i.e. said circular, if interpreted this way by Revenue against the taxpayer, means it is denying something which law specifically permits to a tax-payer) 

These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation.

[PAWAN KUMAR]

Dear Sir,

I completely agree with the views of honble Kasturi Sir and Amit Sir. 

The amount you may correct in next GSTR-3B subject to filing information letter to Department officials. This will help in proving the evidence as bonafide mistake.

[Amit Agrawal]

To my mind and with due respect for other contributions who may not agree with my view here, writing to jurisdictional officer seeking permission to re-credit etc. in given circumstances in not necessary when law itself allows tax-payer to do the same u/s 39(9).

IMHO, why to seek 'permission' (something which officer may not grant at all or sit on such request unendingly, creating unnecessary limbo for the tax-payer) when law does not require tax-payer to seek any such permission but allows self-correction at the end of tax-payer himself subject to conditions & limitations prescribed u/s 39(9). 

However, when jurisdictional officer issues notice u/r 88D, tax-payer can explain reasons for difference by pointing out 'mistakes made in earlier return' and 'corrections carried by him when said mistakes were found (as allowed u/s 39(9))'. 

And as suggested in my earlier post, tax-payer should be ready to defend himself judicially if tax-payer's written explanation u/r 88D(2)(b) is not accepted by jurisdictional officer and notice either u/s 73 or 74 gets issued (Ref: 88D(3)). 

These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation.

[Shilpi Jain]

If this is within the section 16(4) time limit then credit can be taken. 

Take the credit in the returns and make an intimation to the department mentioning the error that has happened and the fact that the already filed 3B cannot be amended.

[Kalpesh Shah]

Thank you Experts for your Inputs.