REGARDING CLAIMING OF ITC CREDIT IN NEXT FINANCIAL YEAR

This query is : Resolved

Suresh S. Tejwani (Querist)
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03 December 2024 Purchase bill dated in March,2024 and bill is reflected in GSTR-2A of April,2024.
Shall we claim such ITC after November,2024?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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03 December 2024 No. Since your purchase bill is dated March 2024 and reflected in GSTR-2A of April 2024, you should have claimed the ITC latest by 30th November 2024.

Suresh S. Tejwani

Suresh S. Tejwani (Querist)
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04 December 2024 Such ITC is claimed in March 2024, & bill is shown in 2A of April 2024 (bill dated - march 2024).
Then what can be the consequences of this?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 December 2024 Central Tax notification 40/2021 on 29th December 2021. Accordingly, a taxpayer can claim Input Tax Credit (ITC) only if the same appears appears in their GSTR-2B. Hence, no provisional ITC can be claimed from 1st January 2022 onwards.
From 1st January 2022, businesses can avail ITC only if it is reported by the supplier in GSTR-1/ IFF and it appears in their GSTR-2B.
Buyers must wait for suppliers to upload invoices in the corresponding GSTR-1. Until then, they must pay GST liability in cash. Taxpayers must hence rigorously follow up with the vendors or suppliers to upload or report their invoices on time.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 December 2024 Budget 2022 updates-
1. ITC cannot be claimed if it is restricted in GSTR-2B available under Section 38.
2. Time limit to claim ITC on invoices or debit notes of a financial year is revised to earlier of two dates. Firstly, 30th November of the following year or secondly, the date of filing annual returns.
3. Section 38 is completely revamped as ‘Communication of details of inward supplies and input tax credit’ in line with the Form GSTR-2B. It lays down the manner, time, conditions and restrictions for ITC claims and has removed the two-way communication process in GST return filing on the suspended return in Form GSTR-2. It also states that taxpayers will be provided information of eligible and ineligible ITC for claims.
4. Section 41 is also revamped to remove the references to provisional ITC claims and prescribes self-assessed ITC claims with conditions.
5. Sections 42, 43 and 43A on provisional ITC claim process, matching and reversal are eliminated.
Result::
It becomes vital for a business to regularly or weekly reconcile their purchase data between their books and the GSTR-2A/2B, identify mismatches and communicate the same to their suppliers so that they upload the missing invoices. Do not wait until the GSTR-3B due date, but follow up more frequently with vendors for timely claims.
There is no functionality currently available for 100% automated claims on the GSTN, however, it can check where ITC exceeds the GSTR-2B limit and the assessing officer may question and send notices where excess ITC has been claimed!

Suresh S. Tejwani

Suresh S. Tejwani (Querist)
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05 December 2024 If assessing officer send notices where excess ITC has been claimed (ITC claimed before it gets reflected in GSTR-2B), then we have to pay interest on such excess ITC claimed?
Orelse we have to reverse such ITC?
If we reverse such ITC, then we can reclaim such ITC or it gets ineligible to claim?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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05 December 2024 1. You have to reverse in the month of claim with interest.
2. You can claim it after it gets reflected in GSTR 2B.

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