As the title suggests , you need to avail Input Tax Credit (ITC) judiciously while filing GSTR-3B for the month of September,2020, other you may be exposed to ITC loss.
The above statement sources from the legal mandate engraved under Section 16(4) of the CGST Act,2017 which is reproduced below for ready reference:
“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.”
The words “invoice relating to such” have been omitted vide Section 120 of the Finance Act,2020, however date of application of same is yet to be notified.
In light of above, the time limit for taking input tax credit against the invoices issued during financial year 2019-20 is up to the filing of GSTR-3B for the month of September 2020. The due date of filing of GSTR-3B for the month of September 2020 is 20/10/2020 ( upto 24th Oct in some cases).
According we need to ensure that ITC in respect of all eligible invoices pertaining to FY 2019-20 is availed in GSTR-3B for September, 2020 to be filed. As in case we miss this opportunity, the ITC will become time barred and will lapse.
How to Ensure ITC for all the invoices pertaining to FY 2019-20 is claimed in GSTR-3B for September,2020
In order to identfy any lapses in availing of ITC the only option is that we prepare a detailed reconciliation statement in the following format. Preparing such a information will help you while preparing GSTR-9 as well as GSTR-9C later on.
It may be noted here that invoices of taxable supplies received wherein the supplier has charged tax from you only need to be captured here. Accordingly the tax invoices of exempt supplies or where reverse charge is applicable should not be included in the reconciliation. Also the supplies from composition supplier not to be included as such supplier does not charge any GST and thus question of ITC thereon doesn’t arise.
Arriving at total tax amount of invoices pertaining to FY 2019-20 as disclosed in GSTR-3B for FY 2019-20
| Description | IGST | CGST | SGST |
| ITC shown in Table 4A(5) (All other ITC) in GSTR-3B’s FY 2019-20 (Invoice wise details should be there) | XX | XX | XX |
| Less : ITC pertaining to FY 2018-19 invoices included in above (Invoice wise details should be there) | XX | XX | XX |
| Net ITC available shown in GSTR-3B pertaining to invoices for FY 2019-20 | (XX) | (XX) | (XX) |
| Add: Full ITC reversal shown in Table 4(B) of GSTR-3Bs (Invoice wise details should be there- Only cases where full reversal has been made should be included) | (XX) | (XX) | (XX) |
| Add: Ineligible ITC shown in Table 4(D) of GSTR-3Bs (Invoice wise details should be there) | (XX) | (XX) | (XX) |
| Total tax amount of invoices pertaining to FY 2019-20 as disclosed in GSTR-3Bs for FY 2019-20 | XX | XX | XX |
Based upon above calculation you get the total tax amount of the invoices pertaining to which ITC was availed or not availed due to which same were ineligible. In above calculation we have ignored the cases where pro rata ITC reversal has been made under Rule 42 / 43 which is not relevant in our invoice wise reconcilation as the purpose of our exercise is to identify invoices which have not been taken cognizance of in GSTR-3B.
Reconciliation Statement to identify invoices for FY 2019-20 on which ITC has not yet been availed
| Particulars | IGST | CGST | SGST |
| Total tax amount of invoices pertaining to FY 2019-20 as per books of accounts / records including those accounted for in FY 2020-21 but were issued in FY 2019-20 (Invoice wise details should be there) | XX | XX | XX |
| Less: Total tax amount of invoices pertaining to FY 2019-20 as disclosed in GSTR-3Bs for FY 2018-19 ( As computed in table supra ) | XX | XX | XX |
| Less: ITC of invoices pertaining to 2019-20 availed in GSTR-3B for 2020-21 (filed till date) (Invoice wise details should be there) | (XX) | (XX) | (XX) |
| Less: Full ITC reversal towards invoices for FY 2019-20 shown in Table 4(B) of GSTR-3Bs (Invoice wise details should be there: Only cases where full reversal has been made should be included) | (XX) | (XX) | (XX) |
| Less: Ineligible ITC for invoices pertaining to FY 2019-20 shown in Table 4(D) of GSTR-3Bs for FY 2020-21 (Invoice wise details should be there) | (XX) | (XX) | (XX) |
| Balance | XX | XX | XX |
It may be noted here that in case the balance as determined in the above table comes to NIL it is a relieving position and it means that ITC for all invoices pertaining to FY 2019-20 has either been availed or not availed being ineligible for credit, besides pro rata reversal as may be required under Rule 42/ 43.
However in case some balance appears you need to urgently identify the invoices which have not been mapped in GSTR-3B. Upon identification of such invoices , you should analyse whether ITC thereon is admissible thereon or not. If ITC is admissible disclose such ITC Table 4A(5) of GSTR-3B for August or September,2020. Reversals , if required should also be made as per Rule 42/43 of the CGST Rules, 2020 and shown at Table 4(B).
However, in case ITC is ineligible such credit should be disclosed in Table 4(D).
With above detailed exercise we would be able to identify the invoices which has not been considered for input tax credit purposes and action can accordingly be taken by the tax payers depending upon eligibility of the ITC.
Apart from above reconciliation , other reconciliations viz between GSTR-2 A and books / GSTR-3B, GSTR-1 with GSTR-3B etc are also required to be made. We would be deliberating on the other reconciliations in our future articles.
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
