Deadline for availing GST input tax credit remains October 20: Govt

The Finance Ministry on Thursday allayed fears among businesses about reconciliation of returns and said the deadline to avail input tax credit (ITC) for last financial year (FY18) will remain October 20.

Businesses had expressed concern about the October 20 deadline for availing ITC for July 2017-March 2018 period, saying their returns cannot be reconciled with the returns filed by vendors. Such a concern arose after the last date for filing final sales return GSTR-1 has been set as October 31.

The ministry said since the ITC is being availed on the basis of summary sales return or GSTR-3B filed, hence the deadline has been kept at October 20. The GSTR-3B of a particular month has to be filed by the 20th day of the subsequent month.

"With taxpayers self-assessing & availing ITC through return in Form GSTR-3B, the last date for availing ITC in relation to said invoices issued by corresponding supplier(s) from July, 2017 to March, 2018 is the last date for filing of such return for September, 2018 i.e. October 20, 2018," it said in a statement.

The ministry clarified that furnishing of sales details in GSTR-1 by the corresponding suppliers and the facility to view the same in GSTR-2A by the recipient is in nature of taxpayer facilitation and does not impact the ability of taxpayer to avail ITC on self-assessment basis.

GSTR-2A is a system generated purchase return.

"The apprehension that ITC can be availed only on the basis of reconciliation between GSTR-2A and GSTR-3B conducted before the due date for filing of return in GSTR-3B for the month of September, 2018 is unfounded as the same exercise can be done thereafter also," it said.

The ministry further said that for those taxpayers who have been recently migrated from erstwhile tax regime to GST regime, the last date for availing ITC for the period July,2017 to March, 2018, is December 31, 2018 or the date of filing of annual return whichever is earlier.

"All the taxpayers are encouraged to take note of the legal requirements and be compliance savvy," the ministry added.

AMRG & Associates Partner Rajat Mohan said multiple clarifications on the admissibility and correction in September month GST returns in respect of transactions for the financial year 2017-2018 would be welcomed by industry.

Abhishek Jain, Tax Partner, EY said: "The clarification on 20 October being the last date for claiming credit in relation to invoices issued between July 2017 and March 2018, may open a Pandora's Box for various industry players; specifically those who were either expecting an extension in the deadline or had evaluated a technical position of the deadline to be 31 December 2018”.

"Businesses who have already filed tax returns with contrary tax positions would have to pay a heavy price for timeliness," Mohan added.