[Case Study] Inward Supply in GSTR 9

Table of Contents

1. Part A: Forward Cases

2. Part B: Backward Cases

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Authors’ Note: We have prepared this blog in 2 parts. 1st part is to anaylse the Forward cases (i.e.  ITC of FY 2021-22 claimed in GSTR 3B of FY 2022-23 on or before the due date of GSTR 3B of Sept. 2022). The 2nd part is to analyse the backward cases (i.e. details of ITC of FY 2021-22 claimed in GSTR 3B of FY 2022-23 on or before the due date of GSTR 3B of Sept. 2022). Even though the cases are prepared independently, readers should consider all the three consecutive FY’s in order to understand the treatment in GSTR-9 of FY 2021-22.

1. Part A: Forward Cases

2. Part B: Backward Cases

Following Cases deal with the situation where FY 2020-21 has been put into GSTR-3B of FY 2021-22.

Note 1: These cases are prepared on the notion that Input tax credit of FY 2020-21 was partly claimed in GSTR-3B of FY 2021-22 by the due date mentioned u/s 39(9).

Note 2: It would be an incorrect declaration because as per section 39(9), rectification of any omission or incorrect particulars in GSTR 3B shall not be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year to which such details pertain, or the actual date of furnishing of relevant annual return, whichever is earlier. Only such rectification are required to be declared in Table 12 and Table 13.

Note 3: GSTR 9 is driven by GSTR 1 or GSTR 3B or Books or something else?

It is to be driven by GSTR 3B. PRESS RELEASE, dated 4-6-2019 also clarifies that it may be noted that irrespective of when the supply was declared in FORM GSTR-1, the principle of declaring a supply in Pt. II or Pt. V is essentially driven by when was tax paid through FORM GSTR-3B in respect of such supplies. If the tax on such supply was paid through FORM GSTR-3B between July 2017 to March 2018 then such supply shall be declared in Pt. II and if the tax was paid through FORM GSTR-3B between April 2018 to March 2019 then such supply shall be declared in Pt. V of FORM GSTR-9. Kindly note that driven by GSTR 3B does not mean the ignorance of actual data of outward supplies and eligible ITC. To have the more clarity, one may read Para 2 of Press Release, dated 3rd July 2019. It is reproduced as below:

Primary data source for declaration in annual return:

Time and again taxpayers have been requesting as to what should be the primary source of data for filing of the annual return and the reconciliation statement. There has been some confusion over using FORM GSTR-1, FORM GSTR-3B or books of account as the primary source of information. It is important to note that both FORM GSTR-1 and FORM GSTR-3B serve different purposes. While, FORM GSTR-1 is an account of details of outward supplies, FORM GSTR-3B is where the summaries of all transactions are declared and payments are made. Ideally, information in FORM GSTR-1, FORM GSTR-3B and books of account should be synchronous and the values should match across different forms and the books of account. If the same does not match, there can be broadly two scenarios, either tax was not paid to the Government or tax was paid in excess. In the first case, the same shall be declared in the annual return and tax should be paid and in the latter all information may be declared in the annual return and refund (if eligible) may be applied through FORM GST RFD-01A. Further, no input tax credit can be reversed or availed through the annual return. If taxpayers find themselves liable for reversing any input tax credit, they may do the same through FORM GST DRC-03 separately.