Circular, 2022

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, (GST Section) :

Letter No. GST/2022-23/ 39 /State Tax Lucknow: Dated: (4. |oF 2.022 2022 To :

AU Zonal Additional Commissioner, Grade -1, Additional Commissioner, Grade -2, (S.LB.) State Tax, Uttar Pradesh.

Subject: Mandatory furnishing ‘of correct and proper. information. of inter-State supplies and amount of ineligible/blocked Input Tax Credit and reversal thereof in return in FORM GSTR- 3B and statement | in FORM GSTR-1 —reg. The process of return filing has been simplified over a period of time. With effect from December 2020, FORM GSTR-3B is getting auto-generated on the portal by way of” duto- population of input tax credit (ITC) from FORM GSTR-2B (auto-generated inward supply: statement) and auto-population of liabilities from FORM. GSTR-1 (Outward supply statement), with an editing facility to the registered person. However, it has been observed ‘that there still are some infirmities in information being furnished by the registered person in relation to inter-State supplics effected to unregistered person, registered person paying tax under section 10. of the Uttar Pradesh Goods and Services Tax Act, 2017 (composition taxable. ‘persons) and’ UIN holders. Also, there appears to be lack of clarity regarding reporting of information about reversal of Input ‘lax Credit (hereinafter referred to'as the “ITC”) as well as ineligible ITC in T: able 4 of FORM GSTR-3B. 2 It is desirable that correct reporting of information is done by the registered person in FORM GSTR-3B and-FORM GSTR-1 -so’as to ensure correct accountal and accurate _ settlement of funds between the Central and State Governments. Accordingly, in: order to ensure uniformity in return filing, the Commissioner, in exercise of its powers conferred under Section 168 of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the “UPSGST Act”), hereby clarifies various issues in succeeding paragraphs.

3. Furnishing of information regarding inter-State supplies made to unregistered persons, composition taxable persons. and UIN holders:

3.1 ‘It has been noticed that a number of registered persons are not reporting the correct details of inter-State supplies made. to unregistered persons, to registered person paying tax under section 10 of the UPSGST Act (composition taxable persons) and to UIN'holders, as ravi’ to be declared in Table 3.2 of FORM GSTR-3B, under the notion that the taxable value of the:same along with tax payable has already been reported in Table 3.1 of the said FORM. In certain cases, it has also been noticed that the address of unregistered person are captured incorrectly by the supplier, especially those belonging to banking, insurance, finance, stock broking,. telecom, digital payment facilitators, OTT ‘platform services providers and E-commerce operators, leading to wrong declaration of Place of Supply (PoS) in both the invoices issued under section 31 of the UPSGST Act, as well as in Table 3.2 of

FORM GSTR-3B.

3.2 In this context, it may be noted that the information sought in Table 3.2 of FORM GSTR-3B is required to be furnished, place of supply-wise, even though the details of said supplies are already part of the supplies declared in Table 3.1 of the said FORM. For assisting the registered persons, Table 3.2 of FORM GSTR-3B is being auto-populated on the portal based on the detajls furnished by.them in their FORM GSTR-1. 3.3 Accordingly, it is hereby advised that the registered persons making inter-State supplies —

(i) to the unregistered persons, shall also report the details of such supplies, place of supply-wise, in Table 3.2 of FORM GSTR-3B and Table 7B or Table 5 or Table 9/10 of FORM GSTR-I, as the case may be;

(ii) to the registered persons paying tax under section 10 of the CGST/UPSGST Act (composition taxable persons) and to UIN holders, shall also report the details of such supplies, place of supply-wise, in Table 3.2 of FORM GSTR-3B and Table 4A or 4C or 9 of FORM GSTR-I, as the case may be, as mandated by the law.

(iii) shall update their customer database properly with correct State name and ensure that correct PoS is declared in the tax invoice and in Table 3.2 of FORM GSTR-3B while filing their return, so. that tax reaches the Consumption State as per the principles of destination-based taxation system.. .

3.4 It is further advised that any amendment cartied out in Table 9 or Table 10 of FORM GSTR-1. or any.entry in Table 11 of FORM GSTR-1 relating to such supplies should also be given effect to while reporting the figures in Table 3.2 of FORM GSTR-3B.

4. Furnishing of information regarding ITC availed, reversal thereof and ineligible ITC in Table 4. of GSTR-3B 4.1. Table 4(A) of the FORM GSTR-3B is getting auto-populated from various entries of FORM GSTR-2B. However, various reversals of ITC on account of rule'42 and 43 of the UPSGST Rules or for any other reasons are required to be made by the registered . person, on his own ascertainment, in Table 4(B) of the said FORM. It has been observed that different practices are being followed to report ineligible ITC as well as various reversals of ITC in FORM GSTR-3B.

Page 2 of 8 4.2. It may be noted that the amount of Net ITC Available as per Table 4(C) of FORM GSTR-3B gets credited into the electronic credit ledger (ECL) of: the registered person. Therefore, it is important that any reversal of ITC or any ITC which is ineligible under any provision of the UPSGST Act should not be part of Net ITC Available-.in Table 4(C) and accordingly, should not get credited into the ECL of the registered person. 43 In this context, ‘itis pertinent t to mention that the facility of static month-wise_ auto- drafted statement in FORM GSTR-2B for all registered persons has been introduced from August, 2020.. The statement provides invoice-wise total details of ITC available to the registered person including the details of the ITC on account of import of goods. Further, details of the said statement are auto-populated in Table 4 of return in FORM GSTR-3B which are editable in the hands of registered person. It may be noted that the entire set of data that is available in FORM GSTR-2B is carried to the table 4 in FORM GST R-3B, except for the details regarding ITC that is not available to.the registered person either on account of limitation of time period as delineated in sub-section (4) of section 16 of the UPSGST Act or where the recipient of an intra-State supply is located in a different State. / UT than that of place of supply. It is pertinent to mention that the ineligible ITC, which was earlier not part of calculation of eligible/available ITC, is now part of calculation’ of eligible/available [TC-in view of auto-population of Table 4(A) of FORM GTSR-3B from various tables of FORM GTSR-2B. Thereafter, the, registered person is required to identify ineligible ITC as well as the reversal of ITC to arrive at the Net ITC available, which is to be credited to the ECL. In light of the above, the procedure to be followed by registered person is being detailed hereunder for correct reporting of information in the return: , A. Total ITC (eligible as well as ineligible) i is being auto-populated from statement in FORM GSTR-2B in different fields of Table 4A of FORM GSTR-3B (except | for the ineligible ITC on account of limitation of time.period as delineated in sub-section (4) of section 16 of the UPSGST ‘Act or where the recipient of an intra-State supply is located in a different State / UT than that of place of supply).

B. Registered person will report reversal of ITC, which are absolute in nature and are not reclaimable, such as on account of rule 38 (reversal of credit by a banking company or a financial institution), rule 42 (reversal on input and input services “~~ on account of supply of exempted goods or services), rule 43 (reversal on capital goods on account.of supply of exempted goods or services) of the UPSGST Rules and for reporting ineligible ITC under section 17(5) of the UPSGST Act in Table 4 (B) (1).

C. Registered person will report reversal of ITC, which are not permanent in nature and can be reclaimed in future subject to fulfilment of specific conditions, such as on account of rule 37 of UPSGST Rules. (non-payment of consideration to supplier within 180 days), section 16(2)(b) and section 16(2)(c) of the: UPSGST Act.in Table 4 (B) (2). Such ITC “may be reclaimed in Table 4(A)(5) on / fulfilment ‘of necessary conditions. Further, all such reclaimed ITC. shall also be Page 3 of 8 shown in Table 4(D)(1). Table 4 (B) (2) may also be used by registered person for reversal of any ITC availed in Table 4(A) in previous tax periods because of some inadvertent mistake. an , D. Therefore, the net ITC Available will be calculated in Table 4 (C) which is as per the formula (4A - [4B (1) + 4B (2)]) and same will be credited to the ECL of the EK. As the details of ineligible ITC under section 17(5) are being provided in Table 4(B), no further details’ of such ineligible ITC will be required to be provided in Table 4(D)(1).

F. ITC not available, on account of limitation. of time period as delineated in sub-section (4) of séction 16 of the UPSGST Act or where the recipient of an intra-State supply is located in a different State / UT than that of place of supply, may be reported by the registered person in Table 4D (2). Such . details are available in Table 4 of FORM GSTR-2B. —_ 4.4 Accordingly, it is clarified that the reversal of ITC of ineligible credit ‘under section 17(5) or any other provisions of the UPSGST Act and rules thereunder is required to be made under Table 4(B) and not under Table 4(D) of .

FORM GSTR-3B.

45 For ease of understanding, the manner of reversals is being elucidated in the illustrations enclosed as Annexure to this Circular.

5. It is requested that. suitable trade notices may be. issued to- publicize the contents-of this Circular. ce

6. ‘Difficulty if any, in the implementation of this Circular may be brought to the notice of the Undersigned. , _ ‘By Order, | . app” (Ministhy S. ) Commissioner, State Tax, Uttar Pradesh Copy. To:

1. Joint Commissioner (I.T.), State Tax HQ, Lucknow for uploading the Circular in the were State Tax HQ, Lucknow.

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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