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Input tax credit, Goods and Services Tax - GST
|Input tax credit|
My case is that a CA of the client had inadvertently shown more tax payable in GSTR-3B as compared to GSTR-1 by Rs 18,00,000. This is evident by the report at the gst website. Ideally the that CA should adjust the amount in the sales column. However, in order to rectify the amount he showed the same as input tax credit in the third month. Now there is a difference of rs 18 lakhs in GSTR-2A and GSTR-3B since such amount will not appear in GSTR-2A. It is clearly a rectification of outward liability and not input tax credit taken. The department is demanding reversal of input tax credit along with interest. Is it a good case to argue? Are there any case laws to refer?
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kindly clarify during which period, this error has taken place.
You should first put across that there was no liability i.e. to the extent of 18L disclosed in excess in tax payable.
The fact that this 18L shown as credit to set off this excess paid liability should not be regarded as availment and using of ITC.
There are cases in the earlier regime where it was held that using credit to set off tax payment which was not liable in the first place should be regarded as reversal of credit.
The period is F Y 2019-20
Thank you shilpi ma'am
Can you share some case laws maam?
I am not sure I understood facts fully.
Is this a case where 'excess payment' (i.e. already made through GSTR-3B) of first month is directly taken as ITC - on his own by the tax-payer - in GSTR-3B of subsequent period (third month), instead of filing refund-claim against 'excess payment'?
It is a typographical error. No revenue loss has been caused to Govt. No question of payment of interest. Interest is always compensatory in nature----S.C. Judgement. When there is no loss of revenue, interest for what ? There is a plethora of case laws on procedural lapse/clerical error.
For this post, I am assuming that this a case where 'excess payment' (i.e. already made through GSTR-3B) of first month is directly taken as ITC - on his own by the tax-payer - in GSTR-3B of subsequent period (third month), instead of filing refund-claim against 'excess payment'?
I am presuming that time-limit to claim refund against 'excess payment' in the first month is not yet lapsed due to extension granted under NOTIFICATION NO. 13/2022–Central Tax.
Under these circumstances, one should look at following option:
A. Claim refund of 'excess payment' made immediately.
B. Admit wrong availment of ITC and pay the same with interest (and penalty @ 15% u/s 74, if so insisted by Dept.).
C. There is no need to link these two events.
If tax-payer insist to fight this, it is not a easy case to defend in my view and tax-payer will be carrying risks there-against.
These are ex facie views of mine and the same should not be construed as professional advice / suggestion.
I agree with views of Shri Amit Ji in toto.
In my view it is only a clerical error in furnishing the details. The fact of the transaction should be presented before the department and once the dept is satisfied about the genuineness of the transaction then the clerical mistake committed should be presented. Since, there is no revenue loss the department should accept the submission.