Circular, 2023

Text

Reproduced from the document India Code holds for this instrument. The Gazette prints Hindi and English side by side and this is the English; the Department's own PDF remains the authority.

Office of the Commissioner, State Tax, Uttar Pradesh, - : Letter No. GST/2022-23/. $2: /Conimercial Tax. _ Lucknow: Dated: on 0] 2023 .

To . oo .

All Zonal Additional Commissioner, Grade -1, Commercial Tax, Uttar Pradesh. .

Subject: Clarification to deal with difference in Input Tax Credit (ITC): availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for FY 2017-18 and 2018-19 reg. 4

Section 16 of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as “UPGST Act”). provides for eligibility. and conditions for availing Input Tax Credit (ITC). During the initial-period of implementation of GST, during the financial years 2017-18 and 2018-19, in many cases, the suppliers have failed to furnish the correct details of outward supplies: in their FORM GSTR-1, which has led to certain deficiencies or: discrepancies in FORM GSTR-2A of their recipients. However, ‘the concerned recipients may have availed | input tax credit on the. said supplies in their returns in FORM GSTR- 3B. The discrepancies between. the amount of ITC ayailed. by: the: registered persons in their returns in FORM GSTR-3B and the amount as.available in their F ORM GSTR-2A are being noticed by the tax officers. duritig proceedings suchas scrutiny/ audit/ investigation etc. due to such. credit not flowing to. FORM.GSTR-2A of the said. registered persons. Such: discrepancies are considered by the. tax officers as representing ineligible IFC availed by the registered persons, and are. being flagged seeking. explanation from. the registered persons for such. discrepancies and/or for reversal of such ineligible ITC.

2. It is mentioned that FORM GSTR-2A could not be made available to the taxpayers on the common portal during the initial stages of implementation of GST. Further, restrictions regarding availment of ITC by the registered persons upto certain specified limit beyond the ITC available as per FORM GSTR-2A were’ provided under. rule 36(4) of Uttar Pradesh Goods 'and Services ‘Tax Rules, 2017 (hereinafter referred to as “UPGST Rules”) only with Ofe effect from 9" October 2019. However, the availability of ITC was subjected to restrictions and conditions specified in Section 16-of UPGST Act from 1" July, 2017 itself. In view of - this, various representations have been received from the trade as well as the tax authorities, seeking clarification regarding the manner ‘of dealing with such discrepancies between the |: amount of ITC availed by the registered persons in their FORM GSTR- 3B and the amount as 7 available in their FORM GSTR-2A during FY 2017-18 and FY 2018-19. |

3. In order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Commissioner, in exercise of its powers conferred. under section 168 of the UPGST Act, hereby clarifies as follows: - S. No. Scenario . Clarification’ Where the supplier has failed’ to file FORM GSTR1 for a tax period buthas filed the return in FORM GSTR-3B for said tax period, due to which the supplies made in the said tax period do not get | reflected ‘iti FORM | GSTR-24 of ‘the recipients.

In such’ cases, the differerice in ITC clairned by the registered person in his return in FORM GSTR-3B and. that available in FORM GSTR-2A may be handled by following ~ the procedure provided i in para 4 below, , Where the: supplier has filed FORM GSTR-1 as well as return in FORM GSTR-3B for a tax period, but has failed to report a. particular’ supply in FORM GSTR-1, due to which the said supply does not get reflected in FORM GSTR- 2A of the recipient.

In such cases, the difference in ITC claimed by the registered person in his return in ‘FORM GSTR-3B and that available in FORM GSTR-2A may. be handled -by following the procedure provided in para 4 below.

Where supplies were made to a registered person and invoice is issued as per Rule 46 of UPGST Rules containing GSTIN of the recipient, but supplier has wrongly reported the said supply as B2C supply, instead of B2B supply, in his: FORM GSTR-1, due to which the said supply does not get reflected in FORM GSTR- 2A of the said registered person... .~ In ‘such cases, the difference in ITC claimed by the registered person in his return in FORM GSTR-3B and that available. in FORM GSTR-2A may be handled by following the procedure provided in para 4 below.

Page 2 of 5 Where the “supplier has filed FORM GSTR-1. as’ well as..return in. FORM | GSTR-3B for a tax period, but he has.

|-declared the supply with wrong GSTIN { |-bandled by. following the. procedure In such cases, the difference in ITC claimed by the registered person in his return’. in. FORM. -GSTR-3B and _ that available in. FORM” GSTR-2A..may be _, | of the recipient in FORM GSTR-1.

Pe oe -| provided in’para 4 below. - | In addition, the proper officer of the actual recipient shall. intimate. the concerned ney jutisdictional ‘tax authority ~ of . the registered person, whose GSTIN has been mentioned. wrongly,. that ITC. on those transactions is required to be disallowed, if. claimed -by’ such recipients ‘in their FORM GSTR-3B.. However, allowance of “}ITC 40 the: actual recipient shall. not mo ‘depend on, the-completion of the action by the tax authority of such registered person, whose GSTIN has been mentioned wrongly, and such’ action will be’ pursued -| as an independent action.

4. . The proper officer. shall first seek the details from: the: registered person ‘regarding all the invoices on which ITC has. been availed by the registered person in his. FORM GSTR 3B a but which are not reflecting i in his FORM GSTR 2A. He shall ‘then ascertain, fulf Ilment of the . following conditions of Section 16 of UPGST Act in respect of. the input tax credit availed on. . such i invoices by the.said registered person:

i) that he i is ‘in possession ofa tax invoice or debit note issued by the supplier or such other tax paying documents;

i that he has received the goods or services or both; ae hi that he has made payment for the. amount ‘towards the value of supply; along with ___ tax'payable: thereon, to the supplier..

Besides, the proper officer shall also check whether any reversal of input tax credit is ‘required to. be made’ in accordance with section: AT or section 18 of UPGST Act and also whether the said-input tax credit has been availed within the t time period specified under sub- section (4) of section 16 of UPGST Act, .

4.1 ° In order to verify the condition of clause (c) of sub-section (Q) of Section 16 of UPGST Act that’ tax on the said supply h has been paid by the ‘supplier, the folowing action may b be taken by the proper officer: | ne :

AAT -Invcase,. where’ difference. seven the ‘ITC claimed in. FORM GSTR-3B and: that available i in.FORM- GSTR: 2A-of the: registered person in respect of a supplier for the said financial year exceeds Rs 5 lakh, the proper officer shall ask the registered person to produce a certificate for the coricerned supplier fron the Chartered Accountant (CA) or the Cost Accountant (CMA), certifying that supplies i in respect of the said i invoices of supplier have actually been made by the supplier to the said registered person and’ the tax’on such supplies has been paid by the said supplier i in his return in FORM GSTR 3B. Certificate issued by CA or CMA shall’ contain UDIN. UDIN of the certificate issued by CAs cati be’ verified from: ICAI website hitps: /hudinai ical. ofelseatch-udin and that issued by CMAs can be verified ‘from ICMAT. website https: igicmai. in/udis/ VerifUDIN.2s aspx .

4.1.2 In’ cases, where difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR 2A of the registered. person in: respect ofa supplier for ‘the said financial year is upto: Rs 5 Jakh, the proper officer shall ask the ‘claimant to produce a certificate from the concerned supplier to the effect that said supplies have actually been made by him to the said registered person ‘and the tax on said supplies has been paid by the said supplier in-his return in FORM GSTR 3B. ° 4.2. However, it may be noted that for the period FY 2017-18, as per proviso to section 16(4). of UPGST Act, the aforesaid relaxations shall not be applicable to the claim of ITC made in the FORM GSTR-3B return filed after the due date of furnishing return for the month of September, 2018 till the due date of furnishing return for March, 2019, if supplier had not furnished details of the Said supply in his FORM GSTR-1 till the due date ‘of furnishing FORM GSTR 1 for the month of March, 2019.

5. - It may also be noted that the clarifications given hereunder are case specific and are applicable to the bonafi de errors committed in reporting during FY 2017-18 and 2018- 19. Further, these guidelines are clarifi icatory in nature and may be applied ag, per the actual facts and circumstances of each case and shall not be used in the interpretation of the provisions of law.

6. These instructions will apply only to the ongoing proceedings in scrutiny/audit/ investigation, etc. for FY 2017-18 and 2018-19 and not to the completed. proceedings. However, these instructions will apply in those cases for FY 2017-18 and 2018-19 where any adjudication or appeal proceedings are still pending.

7. Difficulty, if any, in the implementation of the above instructions may be brought to the notice of the Undersigned. .

~ By Order, cae (Ministhy S.) . - Commissioner, State Tax, . Uttar Pradesh.

Copy To: .

1. Joint Commissioner u T. 5, State. Tax HQ, Lucknow for uploading the Circular on the . Departmental Website.

4 , falc) nN: of) State Tax HO, Lucknow.

- ofe.

Page 5 of 5

Provisions this circular answers to

Read out of the instrument itself: an enabling provision is one it says it was made under, which is the power it rests on. The rest it names without resting on.

Other instruments under the same Act

All of the The Uttar Pradesh Goods and Services Tax Act, 2017