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Regarding reversal of ITC


Himanshu (Student CA Final )     28 March 2019

Himanshu
Student CA Final  
 7 likes  114 points

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one of my client has invoices reflecting ITC but that party has not filed its GSTR 1 and 3 B for the periods in which purchases are made by my client ,

now the question is at the time of reconciliation gst portal is showing excess credit claimed by such amount

now whether client is liable to reverse itc or it can claim it as he has valid Invoices reflecting purchases and gst thereon...

avater

Sahil Jain (FAFD, DISA, CA) (Practicing Chartered Accountant )     28 March 2019

Sahil Jain (FAFD, DISA, CA)
Practicing Chartered Accountant  
 188 likes  2461 points

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Your client will have to reverse the ITC along with the Interest.
He cannot claim ITC unless and until the supplier file his returns.
You will have to coordinate with your supplier and get his returns filed, else you are liable to reverse the same along with interest

shailendra shukla (Bhopal)     28 March 2019

shailendra shukla
Bhopal 
 108 likes  1720 points

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practically a lott of time it's not feasible to force your seller even when you have paid the total amount to them...........
yes it is an important condition to claim the itc that your seller have paid tax on it and filed their return, still if you hold a valid invoice you can claim itc by it.... (opinion)

avater

Sahil Jain (FAFD, DISA, CA) (Practicing Chartered Accountant )     28 March 2019

Sahil Jain (FAFD, DISA, CA)
Practicing Chartered Accountant  
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The GST officer do not allow ITC claimed if it is not reflecting in GST-2A irrespective of facts that we have valid invoice and we have paid amount to our vendor.
So better is to reverse the same by us only and not wait for notice to be served.

shailendra shukla (Bhopal)     28 March 2019

shailendra shukla
Bhopal 
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okay what if the supplier is filing his gstr 1 timely and the invoices are also reflecting in gstr 2A but he did not file his gstr 3b in which he is required to pay tax............
Your legal opinion is totally correct sir but in a lott of circumstances one to one matching of invoices are not possible............
first you will tell your supplier to show this invoice in his return and after few days he'll revert back to you telling 'i forgot' or will take in the next month or will ask my consultant to take or it can be n number of cases....... so after matching 99 invoices also( giving intimation to seller a lott of time) will you wait for that one invoice which is not being matched........... ??

it was just a question in my mind...... correcting this opinion of mine will be appreciable sir......... 😊

avater

Sahil Jain (FAFD, DISA, CA) (Practicing Chartered Accountant )     28 March 2019

Sahil Jain (FAFD, DISA, CA)
Practicing Chartered Accountant  
 188 likes  2461 points

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Firstly, if the supplier has filed his GST-1 and invoice is showing in your GST-2A, however the supplier has not filed GST-3B
then in this case you don't have to worry, you can take ITC as it is reflecting in GST-2A. It will be vendors headache to pay GST as he has shown liability in GST-1 but not filed GST-3B. Department shall ask from him for tax and not you as he has already filed GST-1.

Also regarding one to one matching of invoices, then the department has put the onus of matching invoices on the dealers. Dealers will have to reconcile everything in their GST annual returns. Also dealers are provided with a tab name "Compare Tax liability " while they file GST returns for every month.
So it's completely dealers headache to verify whether ITC is visible in GST-2A or not, coordinate with the vendors.

It's time consuming and very much complex, but this is the way laws are being drafted and returns to be filed.

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Pankaj Rawat (GST Practitioner)     28 March 2019

Pankaj Rawat
GST Practitioner 
 3499 likes  47377 points

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There are 2condition when Any purchase bill is not reflected in 2A.

1. If You are having Original Tax Invoice & Goods receipt Proof , you can claim ITC even if it is not reflected in 2A . Its depend how you present your case before Your Jurisdiction Officer. (It's acceptable as of today scenario of Return Filing Module Exist )



2. If your supplier has done any fraud , & in in that case if his bill is not reflected in your 2A , then it's sure that you have to deposit the same with interest .

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Himanshu (Student CA Final )     30 March 2019

Himanshu
Student CA Final  
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in addition to my question i would like to add that supplier has not filed neither GSTR 3B nor R1 ,

but in one way it is a kind of hardship for purchaser as he has to not only discharge his liability regarding filing of gst returns but also keep a track of his supplier relating to filing of gst returns .....and moreover there is no intention from buyer side to claim excess or invalid ITC.

AL ZUHAIB HASAN (Accountant)     31 March 2019

AL ZUHAIB HASAN
Accountant 
 22 points

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Same thing happend with me. Supplier filed his GSTR-1 without filing GSTR-3B but as the ITC is reflecting in my GSTR-2A should I need to worry about it? And just in case if he has done fraud then will the GST department also harrase me for purchasing goods from such person? Please help.


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