(This Post is only for the information of the readers and shall not be taken as a professional advice. Readers shall read the law and understand the law and take informed decision accordingly. The author does not accept any responsibility in this regard).......
Date:
22.08.2020
From
…………………………..
…………………………..
…………………………..
To
…………………………..
…………………………..
…………………………..
Dear Sir,
Sub: Reply
to your Notice No: DIN-
Ref: GSTIN:
I have received the above-mentioned Notice by email
directing me to pay Rs. 1,54,740/- along with interest U/s 50 of the Central
Goods and Services Tax Act, 2017 at the earliest and report compliance.
It is alleged in your notice that, on verification of
GSTR-3B returns filed by me for the period March-2019, it is seen that I have
filed GSTR-3B after the due date of filing of return U/s 39 for the month of
September-2019 in which I have availed an Input Tax Credit amounting to
1,54,740/- for the said period. Further alleged that the Input Tax Credit
availed by me is in violation of Section 16(4) of the Central Goods and
Services Tax Act, 2017.
In response to the notice, I wish to submit the following
for your kind consideration and favorable disposal: -
1.
Section
16(4) of CGST Act states as follows:
Section 16(4)
relevant for the period FY 2018-19
"A registered person shall not be
entitled to take input tax credit in respect of any invoice or debit note for
supply of goods or services or both after the due date of furnishing of
the return under section 39 for the month of September following the
end of financial year to which such invoice or invoice relating to such debit
note pertains or furnishing of the relevant annual return, whichever is
earlier:"
2.
Initially
the mechanism for availing the ITC has been provided in GSTR 2 which has been
kept in abeyance and therefore the ITC should have been availed only through
GSTR 2 and nowhere in the law it has been prescribed that the ITC can be
availed through GSTR 3B.
3.
Section
47 and section 50 of the CGST Act, 2017 allows the taxpayer to file the return
even after the due date on payment of late fee u/s 47 and on payment of
interest u/s 50(1) of the CGST Act, 2017.
4.
That
means Section 47 and section 50 allows the taxpayer to file the return even
beyond the due date on account of any reasons without any condition of
disallowing ITC. The privilege of filing the return remains AS IT IS (i.e. not
subjected to the condition that if return is filed delayed, ITC will be denied)
even after the due date with the only condition that the Government has to be
compensated for its revenue loss for the said period by payment of interest
under section 50(1) and late fee for delay in furnishing of return u/s 47.
5.
Therefore,
it appears that provision crafted in section 16(4) which restricts the time
period to avail the ITC stands contrary to the provision of section 47 and
section 50. Had section 16(4) been the non-obstante clause, i.e. had the
provisions of section 16(4) started with “Notwithstanding anything
contained in this Act”, then the time limit prescribed under section
16(4) to restrict availment beyond the certain time period would have been
valid.
6.
I
am liable to pay interest and late fees for the delay in filing GSTR 3B for the
month of March, 2019 and therefore, the Input Tax Credit availed by me in GSTR
3B for the month of March, 2019 is strictly as per the Law.
7.
Secondly,
it may please be noted that Section 39 allows me to file the return even
without the payment of tax whilst the GST Common Portal does not allow me to
file the return without payment of tax.
8.
I
invite your attention to the following legal provisions:
Section 39(1) of the
CGST Act, 2017 - Section dealing with filing of RETURN
"Every registered person, other than
an Input Service Distributor or a non-resident taxable person or a person
paying tax under the provisions of section 10 or section 51 or section 52
shall, for every calendar month or part thereof, furnish, in such form and
manner as may be prescribed, a return, electronically, of inward
and outward supplies of goods or services or both, input tax credit
availed, tax payable, tax paid and such other particulars as may be
prescribed, on or before the twentieth day of the month succeeding such
calendar month or part thereof."
Section 39(7) of the CGST Act, 2017 -
Section dealing with PAYMENT
"Every registered person, who is
required to furnish a return under sub-section (1) or sub-section (2) or
sub-section (3) or sub-section (5), shall pay to the Government the tax
due as per such return not later than the last date on which he is
required to furnish such return:"
9.
On
perusal of the aforesaid provisions, it is amply clear that the due date for
return and payment of tax are prescribed independently and payment of tax is
not a pre-condition for filing of return. The due date for payment of tax is
the last date on which he is required to file such return. For instance, GSTR
3B of April, 2018 can be filed at any time till the 20th May, 2018. Let us
assume, it has been filed on 10th May, 2018. Here, it needs to be noted that
although the last date for payment can be till 20th May, 2018 but the GST Common
portal does not allow to file GSTR 3B unless and until payment of tax liability
is made before filing GSTR 3B. Due to this gap in the implementation of the GST
Law at the GST Common Portal, the taxpayer has been suffering and are unable to
comply with the law.
10. I also invite your attention to the following legal
provisions:
Section
2(117) of the CGST Act, 2017
"Valid
return" means a return furnished under sub-section (1) of section 39 on
which self-assessed tax has been paid in full.
In case, the tax
liability as self-assessed in GSTR 3B cannot be paid in full by the due date,
the return so furnished will not be treated as valid return. It is pertinent to
note that there is no condition for making payment of tax as a pre-condition for
filing return of Form GSTR-3B and in absence of any such provision, on-line
system of department, which did not allow filing of returns without payment of
tax liability admitted as per such returns, is contrary to legal provisions.
Hence, it can be noted from the aforesaid legal provisions that GST Common
Portal ties the hands of the taxpayers to make the payment before filing GSTR
3B.
11. Accordingly, as per the legal provisions of the law,
had the GST Common Portal allowed the facility of self-assessing the tax
liability by filing GSTR 3B without payment of tax, the taxpayer would have
claimed Input Tax Credit well within the time limit prescribed in section
16(4).
12. Moreover, the availment of Input Tax Credit by me was
also in compliance with Removal of Difficulty Order No: 2/2018 Central Tax
dated 31.12.2018 which was applicable for the Financial Year 2017-18. The same
situations narrated in the Order existed for the Financial Year 2018-19 as
well.
13. Therefore, the availment of Input Tax Credit by me in
GSTR 3B for the month of March, 2019, even if it is filed on 15.11.2019, is in
order.
Hope I have clarified the points raised in your Notice
and Request you to drop the proceedings initiated against me.
Yours Truly,
For M/S…………………..
Proprietor.
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