Claim Input Tax Credit, Goods and Services Tax - GST

[Venkatraman Aiyar]

Dear All,

Request your inputs on the below query.

So we are an Indian Subsidiary of a Singapore Registered ITES Company. All our Expenses is charged to our Singapore Parent under our Transfer Pricing Agreement and the Invoices raised by us is with 0% Output GST. Every month we receive advance remittances from our Parent Company to meet the expenses, which is offset/reconciled against the Invoices submitted.

Up until now we have not claimed the ITC and the credit is lying in our e-duty ledger. My query is can I now claim the ITC for the previous financial years. For example in FY23 claim ITC for FY20. If yes, then please can you guide me on the process and compliances.

Thank you.

Ganesh Iyer

Posts / Replies

[Amit Agrawal]

Dear Querist

I am not sure that I understood the query (i.e. Up until now we have not claimed the ITC and the credit is lying in our e-duty ledger.)

If ITC in previous years is not claimed, then, there should be no such balance in elecronic credit register.

Do you meant that ITC was claimed in previous years while filing GSTR-3B but no refund is claimed there-against as yet and same is not used for paying any outward tax liability?

[Venkatraman Aiyar]

Dear Sir,

Our GST Output is always Nil because as a Subsidiary we only raise TP Invoice on our Parent Company with Nil GST Output. So our GST Returns have been filed with Nil Output and we have never claimed the refund.

Thank you.

[Amit Agrawal]

Dear Sir,

I think you have not understood the contradiction in your query.

If ITC - in previous years - is not claimed while filing form GSTR-3B, then, there should be no balance in elecronic credit register.

If ITC - in previous years - is claimed while filing form GSTR-3B and there is balance in elecronic credit register, same can be claimed as refund even now by following proecudure u/s 16 (3) of the IGST Act, 2017.

As you have said that ITC is lying in e-duty ledger, I am presuming that ITC was claimed in previous years while filing GSTR-3B but no refund is claimed there-against as yet (and same is not used for paying any outward tax liability as clarified by you in past post as well).

Where time-timit to claim refund u/s 16 (3) (a) of the IGST Act, 2017 - read with Section 54 of the CGST Act, 2017- is lapsed (for any ITC availed in past years), then, choose procedure to claim refund u/s 16 (3) (b) of the IGST Act, 2017.

As option to claim refund u/s 16 (3) (b) of the IGST Act, 2017 can be withdrawn anytime (due to amendtment carried vide THE FINANCE ACT, 2021 dated 28-03-2021, which is not yet made oeprational), please do the needful before said amendment gets operational.

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

[V Rajalakshmi]

Dear Sir

If you have availed of the ITC credit and the balance is lying in the electronic credit ledger in GST portal then the refund can be claimed within 2 years from the date of receipt of the money/ Invoice date, RFD 01 form should be filed along with the following documents, and these should be uploaded through the portal.

1. Export invoices with FIRC copies.

2. Invoice copies of ITC are availed along with a reconciliation of the same with 2B credit

3. CA certificate in case the refund amount is greater than Rs 5 lakh.

If the ITC is not claimed in GSTR 3B, then it can be claimed from April 2022. The ITC for the period before Mar 22 will lapse and will be reversed to the respective expense account in the profit and loss statement.

[Venkatraman Aiyar]

Hello Sir,

Your assumption is correct ie."As you have said that ITC is lying in e-duty ledger, I am presuming that ITC was claimed in previous years while filing GSTR-3B but no refund is claimed there-against as yet (and same is not used for paying any outward tax liability as clarified by you in past post as well).".

Please can you guide me to where I can find details of how to claim the refund and documents required to be submitted the refund application.

Thank you.

[Shilpi Jain]

You would have to file RFD-01 to claim refund. However the refund can be claimed within 2 years from receipt of payment for the service export.

In case the refund becomes time barred as per above provision, you can consider to do the invoice to your foreign parent with GST and pay off this GST with the accumulated credit in e credit ledger. However your commercial invoice will still be without gst as done today.

The gst paid on the export can be claimed as credit.

Which option to choose will depend on the figures involved.