Series-4: Reversal of ITC due to Non-Payment of Consideration within 180 days to the Supplier of the Goods or Services-Treatment in Annual Return
This is one of the most common errors committed by while filing of GSTR-3B. ITC availed has not been reversed due to non-payment of consideration to the supplier within 180 days of the invoice. The situation would be particularly trivial in cases wherein consideration has not been paid by March 2018 as this might result in additional payment to be made by the Taxpayer by Cash by DRC-03.
Situation 1: Mr A had purchased Goods from Mr B for Rs 100000 and paid Tax of Rs 20000 on 15th July 2017. He did not pay any amount to supplier and was required to reverse the Input Tax Credit in accordance with the second proviso to Section 16(2) read with Rule 37 of CGST Rules, 2017. Following scenarios may arise:
- Reversal made in the Month of January 2018
| Particulars | Amount | Table |
| Amount reversed in Pursuance of Second Proviso to Section 16 of CGST Act, 2017 | 20000 | Table 7A |
- Reversal made in the Month of September 2018
| Particulars | Amount | Table |
| Amount reversed in Pursuance of Second Proviso to Section 16 of CGST Act, 2017 | 20000 | Table 12 |
- Reversal made in Annual Return
| Particulars | Amount | Table |
| Amount reversed in Pursuance of Second Proviso to Section 16 of CGST Act, 2017 | 20000 | Table 7A |
This last scenario would result in Additional payment of Tax Via DRC-03 in Cash in Annual Return for the Year 2017-18.
Situation 2: Mr A had purchased Goods from Mr B for Rs 100000 and paid Tax of Rs 20000 on 15th July 2017. He was required to reverse the Input Tax Credit in accordance with the second proviso to Section 16(2) read with Rule 37 of CGST Rules, 2017. He reversed the said amount in the Month of January 2018.
Scenario 1: He paid Rs 100000 in the month of March 2018 and reclaimed the said amount in the month of March 2018.
Scenario 2: He paid Rs 100000 in the month of March 2018 and reclaimed the said amount in the month of June 2018.
Scenario 3: He paid Rs 100000 in the month of March 2018 and reclaimed the said amount in the month of December 2018 in GSTR-3B.
| Particulars | Amount | Table | Table | Table |
| Amount reversed in Pursuance of Second Proviso to Section 16 of CGST Act, 2017 | 20000 | Table 7A | NA | NA |
| Scenario-1-Reclaimed in March 2018 | 20000 | NA | Table 6H | NA |
| Scenario-2-Reclaimed in June 2018 | 20000 | NA | NA | Table 13 |
| Scenario-3-Reclaimed in December 2018 | 20000 | Relevant for 2018-19 |
Situation 3: Mr A had purchased Goods from Mr B for Rs 100000 and paid Tax of Rs 20000 on 15th July 2017. He was required to reverse the Input Tax Credit in accordance with the second proviso to Section 16(2) read with Rule 37 of CGST Rules, 2017. He reversed the said amount in the Month of January 2018.
Scenario 1: He paid Rs 100000 in the month of June 2018 and reclaimed the said amount in the month of June 2018.
| Particulars | Amount | Table | Table | Table |
| Amount reversed in Pursuance of Second Proviso to Section 16 of CGST Act, 2017 | 20000 | Table 7A | NA | NA |
| Reclaimed in June 2018 | 20000 | Relevant for 2018-19 |
