ITC on Inward supplies availed in the next Financial Year

[Shri Sasikumar]

Dear Experts,

GST audit is going on for FY 20-21. We have availed before September-2020, the ITC related to FY 2019-20 in the next FY 20-21 to the extent of Rs. 4.5 lakhs. However, GSTR-9 of FY 2019-20 in column 8(C) it was reported only Rs. 3.25 lakhs as per the receipt of the material during FY 19-20 but taken in next FY 20-21. The balance credit of 1.25 lakhs represents the material received in FY 20-21 and hence credit directly availed in FY 20-21. GST department proposed to disallow 1.25 lakhs as it was not reported in GSTR-9 of FY 2019-20. Please advise. Thanks.

[Mr. Heet Shah]

Dear Sasikumarji,

You can very well avail the credit avail in excess of ITC reported in Table 8(C) of GSTR-9 if the same is available in GSTR-2A/2B before 30th Nov of subsequent year. even if the same goes unreported in GSTR-9. The same can't be denied on the grounds of non reported in GSTR-9

[KASTURI SETHI]

(i) ITC cannot be denied in this scenario.

(ii) The eligibility and conditions have been laid down in Section 16 of CGST Act and NOT in Section 44 meant for Annual Return. 

(iii) The fundamental basis is the Books of Account, a statutory records and, thereafter, comes GSTR-2ARules 60(1) & 2B Rule 60(7) refer.

[Shilpi Jain]

If you have availed in GSTR-3B within time limit then you are eligible for credit. Not reporting in GSTR-9 is only an error and that should not lead to denial of substantial benefit like ITC.

AI Summary

ITC eligibility: omission from the annual return does not bar credit if timely claimed and supported in returns and records. ITC for supplies received in one financial year but availed in the next depends on eligibility under Section 16 and on timely claim in periodic returns and corroborative entries in supplier records (GSTR-2A/2B); omission from Table 8(C) of GSTR-9 alone does not justify denial if books of account and GSTR-3B/GSTR-2A/2B show the credit within statutory time limits.