Mismatched ITC of 2 fiscal yrs: CBIC allows regularisation of bona fide cases

Ludhiana: In a relief to GST assessees, the Central Board of Indirect Taxes and Customs (CBIC) on Tuesday issued a circular to regularise mismatch of Input Tax Credit (ITC) claimed by the taxpayers in bona fide cases for the financial years 2017-18 and 2018-19. This was a long pending demand of the businessmen and tax professionals from the city, and recently this issue also came up for discussion during the GST Council meeting held this month.
Leading tax expert N K Thaman welcomed the move and informed that during initial period of implementation of the GST, many bona fide errors had happened on the part of suppliers due to lack of knowledge of correct procedure of filling returns.
Talking about some specific bona fide instances where the ITC was not reflected in GSTR-2A of the taxpayer in those years, as mentioned in the circular, he shared these instances: “Where the supplier has failed to file GSTR-1 return for a tax period and has instead filed GSTR-3B for that period, where the supplier has filed both returns but has failed to report a particular supply in GSTR-1, wrong reporting of B2B supply as B2C, and mentioning of wrong GSTIN of taxpayer.”
Thaman also shared the procedure of getting the ITC regularised in such cases for the financial years 2017-18 and 2018-19.
He said: “In such cases, the jurisdictional officer will satisfy himself about the possession of tax invoice by the taxpayer, receipt of goods by the taxpayer and payment made by the taxpayer to the supplier, from the details called from the taxpayer. Further, the taxpayer availing ITC has to produce certificate from a CA or CMA (in cases where ITC exceeds Rs 5 lakhs) or certificate from supplier in other cases regarding supplying of goods to taxpayer and payment of GST by the supplier. After receipt of these evidences, the jurisdictional office will allow the regularisation of the ITC.”
Businessmen have also welcomed the move.
City exporter Jagmeet Singh said, “We are thankful to CBIC for accepting our long-pending demand and introducing a circular regarding the same. We now urge the GST officials in field offices to ensure that they do the needful in cases which were held up sans any clarity on how to make corrections.”
However, some have also requested the CBIC to issue similar guidelines for the other financial years.
Nitin Sharma, executive member of Auto Parts Manufacturers Association said, “CBIC should also frame guidelines for those businessmen who have deposited mis-atched ITC in the previous years as they did not know that CBIC will issue such instructions in near future to correct the bona fide mismatch. Such businessmen will be at loss if nothing is done for them.”