There has been a lot of debate about how to fill Table 6 of Annual Return for 2018-19. One of the reasons behind the debate is that Table 6A of GSTR-3B would be auto-populating with figures of ITC claimed in GSTR-3B in the Year 2018-19. Now this ITC claimed in GSTR-3B of 2018-19 might include ITC of 2018-19 and ITC of 2017-18 claimed by virtue of Section 16(4). This ITC of 2017-18 would have been part of Table 13 of GSTR-9 and Table 12 of GSTR-9C (although made optional only for 2017-18 and 2018-19).
Let’s take an Example that a person has claimed Credit of Rs 150 in GSTR-3B of 2018-19 out of which Rs 100 related to 2018-19 and Rs 50 related to 2017-18. Ideally Rs 50 should have been part of Table 13 of GSTR-9 of 2017-18 and Table 12 of GSTR-9C. Table 6A is now auto-populating with Figures of Rs 150. The question is whether we have to fill Table 6B with Rs 150 i.e. ITC for 2018-19 and ITC for 2017-18 Claimed in 2018-19 or Rs 100 i.e. ITC for 2018-19 only.
a) Does Section 16(4) and the Scheme of the Act throws light upon the same?
(Ignoring the Impact of Extension of date of claiming Input Tax Credit in Section 16(4) and assuming that Annual Return for 2017-18 was available for filing in August 2018)
As per provisions of Section 16(4) of CGST Act, 2017, ITC of 2017-18 is only allowed to be claimed till due date of furnishing of the GSTR-3B of September 2018 or furnishing of Annual return of 2017-18, whichever is earlier. The intention of the legislature seems that if ITC pertaining to 2017-18 has been claimed in 2018-19 and annual return is filed before due date of GSTR-3B of September 2018, they want it should at best be claimed before filing of annual return for 2017-18 so that annual return filed for 2017-18 may contain details of ITC for 2017-18 claimed in 2018-19. On the contrary, supposedly if Annual Return is filed say in Month of March 2019 and ITC is claimed in GSTR-3B filed for the month of September 2018, therefore Annual Return since filed after September 2018 would include the information of ITC of 2017-18 claimed in 2018-19.
Had this intention not been forthcoming, there would have been no reason for linking provisions of Section 16(4) with Date of filing of annual return. Legislature would have simply provided that the Last Date for claiming credit for 2017-18 would be due date of filing of GSTR-3B of September 2018.
Conclusion-The intention in either of the circumstances and fact of linking ITC of 2017-18 with Annual Return of 2017-18 seems to be the fact that if Annual Return is filed before due date of GSTR-3B of September 2018 or Annual Return filed beyond the due date of GSTR-3B for September 2018, it should contain details of Input Tax Credit of 2017-18 claimed in 2018-19 and in no circumstances Input Tax Credit should be allowed to be claimed beyond the filing of Annual Return, if Annual Return for 2017-18 has filed earlier than due date of GSTR-3B of September 2018 since then it would not be possible to report the same in Annual Return.
In my view, information for each financial year has to be straight-jacketed in to each year’s annual return and that’s why all time limits in Section 16(4), Section 34, Section 37, Section 38, and Section 39 have been linked with Annual Return. Therefore, each year has been made a compact year wherein legislature is expecting the entire information pertaining to a year upto filing of Annual Return for that year and not beyond that date. We cannot treat that information has been sought in Table 12 and Table 13 only for statistical purposes and has no relevance for that year but would be relevant only when filled in Table 6. (Table 12 and Table 13 have been made optional only for 2017-18 and 2018-19 and not for rest of the years, so no generalized opinion should be made on that basis)
Time Limit for initiating Action under Section 73/74 also seems to based upon the same hypothesis
Taking a cue from Section 16(4) wherein ITC for a financial year can either be taken upto filing of Annual Return (in case Annual Return has been filed earlier than September of next financial year) or till September of Next Financial Year, (if Annual Return not filed before September of next Financial Year), but in either case since Annual return would then be able to have the information of the ITC availed in Table 13 of 2017-18; time limit provided under Section 73 also links the last date of issue of order to three years from the due date of furnishing of annual return for the financial year to which the input tax credit wrongly availed or utilised relates to and not to year in which it is availed or utilised.
Time Limit provided for initiating an action under Section 73 of Annual Return is as follows:
(10) The proper officer shall issue the order under sub-section (9) within three years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within three years from the date of erroneous refund.
The relevant extract of the part which is relating to ITC in above provision for the ease of having a combined reading is as follows:
(10) The proper officer shall issue the order under sub-section (9) within three years from the due date for furnishing of annual return for the financial year to which…..input tax credit wrongly availed or utilised relates to….
Time limit for issuing order under Section 73(10) is three years from due date of furnishing of Annual Return for the financial year to which ITC wrongly availed or utilised relates to. Supposedly an invoice is pertaining to February 2018 for which ITC is claimed in August 2018. Proper officer comes to know that this ITC has been wrongly availed by virtue of section 17(5) of CGST Act, 2017 and issues order under Section 73. The question is what would be the limitation under Section 73(10) for issuance of Order i.e.
Whether it would be 3 years from Due Date of Filing of Annual Return of 2017-18 (i.e. financial year to which Input Tax Credit availed relates) or 3 Years from Due Date of Filing of Annual Return of 2018-19(i.e. financial year in which Input Tax Credit is availed).
In my opinion, since Section 73(10) uses the words “three years from the due date of furnishing of annual return for the financial year to which input tax credit wrongly availed or utilised relates to”, therefore it would be three years from Due Date of Filing of Annual Return for 2017-18.
Taking a cue forward from above example of ITC of February 2018 claimed in the month of August 2018 and given the fact that time limitation under section 73 for issuance of order commences form Due Date of filing of Annual Return for financial year 2017-18, whether credit would be required to be shown in Table 13 of 2017-18 only (since it pertains to 2017-18 and availed in 2018-19) or in Table 6B of 2018-19 (as well since it has been availed in 2018-19).
In my opinion, when legislature itself has provided time limit for issuance of Order under Section 73(10) for the said credit from due date of furnishing of annual return of 2017-18, it is expected that the same should be part of Annual Return of 2017-18 and has to be reflected therein (irrespective of the fact that the table 12 and 13 might have been made optional but it has to be kept in mind that its optional only for 2017-18 and 2018-19 and we are arriving at a view for future years as well), it cannot be the intention of Legislature that time limit for issuance of Order in respect of such ITC has to be calculated from due date of furnishing of Annual Return for 2017-18 but they would be expecting that the same may be made part of Annual Return of 2018-19 but the time limit under Section 73 would start from financial year to which it relates.
Conclusion-In my opinion, on a combined reading of Section 16(4) read with Section 73/74, Table 6B of Annual Return of 2018-19 should be containing figures of only 2018-19 only and not for 2017-18.
Further, it would not be incorrect to say that present format of 2018-19 due to its incorrect structure, does not satisfy requirement of Taxpayer, Government and Administrators. Neither Instructions No. 2, 4 and 5 of GSTR-9 gives any clue to the same and also this is the first return Annual return which has to be filed wherein GSTR-3B of relevant year would be containing details of two years. In the case of 2017-18, GSTR-3B only contained details of single year and not multiple years. Therefore Annual Return of 2018-19 poses different set of challenges as compared to 2017-18
However, it goes without saying that the same is a personal opinion and need of the hour is either to amend GSTR9 for 2018-19 to suit to the requirements of 2018-19 or issue an advisory with this regard. Not that issue of advisory would correct anomalies in GSTR-9 for 2018-19 but it would have the impact of rationalising the different approaches being adopted by Stakeholders while filing GSTR-9 (or in other words it would work as a patchwork for GSTR 9 of 2018-19).
