Submission of correct return under GST: Instruction from Maharashtra GST Department

[Ganeshan Kalyani]

Maharashtra GST department has issued a Trade Circular No.47 T of 2019 dated 26.08.2019 instructing tax payers to file GST return with correct information. The State Tax department urge the tax payer to show complete information in the GSTR-3B return. It is observed by the GST department that tax payers are furnished net Input Tax Credit i.e. without showing the ineligible input tax credit and reversal of proportionate credit corresponding to exempted supply. As a result department is unaware about the total credit available with the tax payer and the input tax credit reversed from the total input tax credit. Further, the unavailability of complete information hampers their receipt of revenue compensation from the Central Government. Various State taxes got subsumed in GST and it was promised by the Central Government that any loss due to tax subsumed will be compensation by them. The determination of fund to be transferred by the Central Government to the State Government predominantly based on the information of GSTR-3B returns available with GSTN.

In view of the aforesaid facts, it is prayed that input tax credit related fields is properly and correctly reported while filing periodic and annual return in the following manner.

1. Disclosure of reversal of ITC u/r 37, u/r 42 & 43: It is observed by the department that instead of showing full ITC in table 4(A) and then reversal of ITC u/r 42 & 43 taxpayer are showing net input tax credit in GSTR-3B. As a result department is getting incomplete information of the ITC reversed by the taxpayer. It is therefore requested by the department to the taxpayer to first show full ITC in table 4(A) and then the proportionate reversal as required u/r 42 & 43 in table 4(B)(1) of GSTR-3B. Also, reversal u/r 37 and any other reversal be shown in table 4(B)(2). Rule 37 provides for reversal of ITC if the taxpayer fails to make payment of invoice with tax to the supplier within 180 days.
2. Disclosure of ineligible ITC u/s 17(5): Input Tax Credit ineligible u/s 17(5) like input tax credit on motor vehicle, rent-a-car, insurance etc. The ineligible ITC are to be shown in table 4(D)(1) of GSTR-3B.
3. Correction of return filed for FY 2017-18 in the GSTR-9 Annual return: Those who have wrongly reported or not reported the ineligible ITC u/s 17(5) (like motor vehicle, rent-a-car, insurance etc.) and also the reversal of ITC u/r 42 & 43 (i.e. reversal of proportionate ITC on common credit used in both exempted and taxable supply) for the FY 2017-18 are required to report it in the annual return to be filed in form GSTR-9.
4. Correction of return filed for FY 2018-19 in the GSTR-3B to be filed for April to September 2019: The taxpayers who have wrongly reported or not reported ineligible as well as reversal of ITC in the return filed for FY 2018-19 may report it in GSTR-3B to be filed for the period from April to September 2019.
5. Correction of return filed for April, 2019 to July, 2019 in the GSTR-3B to be filed for August, 2019 onwards: The taxpayers who have wrongly reported or not reported ineligible as well as other reversal for April, 2019 to July, 2019 may report it in GSTR-3B to be filed for the period from August, 2019 onward.

Further, it is also mentioned in the circular that failing to furnish such information may result in selection of cases of such tax payers for scrutiny, which later on might result into imposition of penalty under GST law.