The Commissioner of State Tax, Maharashtra vide Trade Circular No. 47T of 2019 dated August 26, 2019, has provided clarifications about details to be furnished under GSTR-3B, for proper settlement and apportionment of fund transfer to States.
Background and computation of settlement amount:
The GSTN portal periodically transmits the report of cross utilisation and IGST fund available for apportionment, to the competent authority, who in turn transfers funds towards settlement of IGST collected by the Centre on the basis of cross utilization of ITC of IGST utilized against CGST/ SGST liability and vice-versa as well as apportionment in terms of Section 17 of the IGST Act, 2017 r.w. Goods and Services Tax Settlement of Funds Rules, 2017.
Aforesaid fund transfer and apportionment is predominantly based on the information of GSTR-3B returns available with GSTN.
Recently it was noticed that in one case taxpayer didn’t disclose the ineligible ITC on account of IGST paid on inward inter-state supply and import supplies in its GSTR-3B. Such non-reporting or under-reporting resulted in less transfer of IGST fund to the State exchequer.
Guidelines issued to Taxpayers:
Monthly GSTR-3B
- Determine all his eligible and ineligible ITC, amount of reversal under Rule 42/ Rule 43 of the CGST Rules, 2017 and report appropriately in Table 4 of GSTR-3B.
- Report entire eligible ITC (excluding ineligible one) including a reversal in Table 4(A); then report the amount of reversal in Table 4(B).
- Ineligible ITC will be reflected in Table 4(D) – blocked credit as per Section 17(5) in Table 4(D)(1); Ineligible credit as per Section 17(4) r.w. Rule 38 in Table 4(D)(2).
- Other ineligible ITC like wrong ITC claimed in previous periods must also be reported under Table 4(D)(2).
- Importantly, the reversal of ITC and ineligible ITC has to be reported separately rather than showing only the net effect.
Correction in GSTR-4
- Taxpayers are required to report correct figures in Table 4(A), 4(B), 4(C) and 4(D) of GSTR-4 and report correct Place of Supply in it.
Correction in returns filed earlier
- For the FY 2017-18 –> Those taxpayers who have either not reported or short reported ineligible ITC as well as the reversal of ITC shall correctly report it under GSTR-9.
- For FY 2018-19 –> If the above error has been committed in FY 2018-19, the same shall be correctly reported in GSTR-3B of April to September 2019.
- For the period April 2019 to July 2019 –> If such error has been committed in current FY’s GSTR-3B filed for the period April to July 2019, then it may be corrected in subsequent GSTR-3B to be filed from August 2019 onwards.
These errors might result in the imposition of penalty in cases where it comes under scrutiny.
Read more at: https://www.mahagst.gov.in/sites/default/files/Trade%20Circular_Submission%20of%20correct%20return%20under%20GST.pdf