'Run-out' of GST Taxpayer in collusion among GSTR-9 and GSTR-2A

Arjuna (Fictional Character): Krishna, ICC Cricket World, 2019 has just started. In cricket many times players get run-out without their fault and same is happening in GST. How are taxpayers getting 'run-out' while providing details of inward supplies in GSTR-9 and GSTR-2A?

Krishna(Fictional Character): Arjuna, Cricket is one of the most celebrated sports. World Cup is ultimate 'test' for every player. Likewise in GST, GSTR-9 is the final return for GST of the taxpayer. For providing details of inward supplies 4 Tables are available in GSTR-9 ie Table 6, Table 7, Table 8 and Table 10. Taxpayer cannot avail any left-out ITC but has to pay for excess ITC which is claimed in 3B along with interest. This way taxpayer has got run-out in collusion among GSTR-9 and GSTR-2A.

Arjuna: Krishna, What is GSTR-2A?

Krishna: Arjuna, GSTR-2A is a GSTN system-generated report of inward supplies and ITC of taxpayer. When a supplier files his GSTR-1, the information is reflected in GSTR-2A of the recipient. Let us understand this with an illustration:

If 'A' supplies goods of Rs. 2,50,000/- to 'B'. Here 'A' being supplier has to report his outward supplies of Rs. 2,50,000/-  in GSTR-1. Once supplier 'A' files his GSTR-1 then such transaction of Rs. 2,50,000/- will be reflected in GSTR-2A of recipient 'B'. 

Many suppliers have not filed or filed 'incorrect' returns and thus ITC from such suppliers is not appearing in GSTR-2A. In this way mistake of suppliers is taking wicket of recipient.

Arjuna: Krishna, What if the ITC appearing in GSTR-2A is more than ITC claimed in returns?

Krishna: Arjuna, if the the ITC appearing in GSTR-2A is more than ITC claimed in returns then recipient can avail such excess ITC, only if the same is claimed in 3B of 2018-19 and needs to be shown in Row C of Table 8. The same cannot be claimed in Annual Return which is a major blockage of law.

For example- If recipient has claimed ITC of Rs. 5,00,000/- in 3B for the year 2017-18 but ITC appearing in GSTR-2A amounts to Rs. 6,00,000/-.

Here in this case if recipient has claimed such excess ITC i.e. of Rs. 1,00,000/- in 3B of the year 2018-19, then recipient can show such ITC in GSTR-9.

Arjuna: Krishna, What if the ITC claimed in returns is more than ITC appearing in GSTR-2A?

Krishna: Arjuna, this is the only major issue of GSTR-9 which needs immediate attention of the Government. As per the provisions, such ITC can be availed but no instruction for this is provided. Let us take an example to understand this case

If the recipient has claimed ITC of Rs. 10,00,000/- in 3B for the year 2017-18 but ITC appearing in GSTR-2A amounts to Rs. 8,00,000/-.

The difference of Rs. 200000 need not be paid in GSTR 9, where as in future Notice will be issued to recipient for payment of ITC reversal.  Thus the case will be referred to department being 'Third Umpire' so that the recipient can be declared as 'run-out'. Thus the recipient will have to legally fight to claim ITC in such cases.

Arjuna: Krishna, What one should learn from this?

Krishna: Arjuna, GSTR-9 ask for detail bifurcation of ITC as capital goods, input and input services. In 3B this data was not asked and so taxpayer has not maintained data as per format prescribed in GSTR-9. It would actually be difficult for taxpayer to provide the same. Also, HSN-wise summary of inward supplies are to be provided in GSTR-9. All above issues have made playing difficult for  GST taxpayer. So, it is really tough to fulfil all the data requirement of GSTR-9. This is first annual return of GST since it’s implementation and thus Government should give chance to taxpayer to correct it’s mistake. Otherwise the collusion of GSTR-9 and 2A is going to prove as unwanted 'run-out' for taxpayer.